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I'm looking for input from anyone who has knowledge of how the subscription plan and process works and also analysis of my own debate on whether it is "worth it".

Care by Volvo XC40 Subscription Link


I am working on the economics of the Care by Volvo Concierge subscription program and have just today, January 14, 2018, put the $500 refundable deposit and ordered my wife's Amazon Blue XC40 Momentum.

Here is a link to the vehicle build.


The confirmation screen stated the car would arrive in April - May 2018.

I have ordered the XC40 Momentum with an MSRP of about $41,445 excluding 6% PA tax.

Benefits of the subscription:
A well-appointed XC40 with many of the most popular Packages: Premium, Vision, Heated Front Seats/Heated Steering Wheel. Options: Panoramic Roof, 19" 5-Spoke Black Diamond Cut Alloy Wheels.
The vehicle will always be less than 2 years old which keeps up with advancements in technology and assumed reliability.
Maintenance, wear and tear items like brakes and a tire/rim warranty are included.
Insurance is included in the monthly subscription. Roughly $80 value per month.
Up to $1000 in excess wear included ie: Scratches, dents, interior wear.

Limitations:
15,000 miles per year (She only averaged 10,000 per year over the past 12 years)
You don't own the car after all the payments. Limited customization.


Questions I have about the plan:

Is it possible to do a slight modification to the included order that I would pay for? Wife really wants the White roof and mirror caps for $300.

If I want to buy the car at the end of the subscription, what is the cost?

How does the insurance work? Who is covered? My wife and I are in our 50's with clean driving records but we have an 18-year-old son, who has a clean record, but "he's 18" He would not be the primary driver and there are several other vehicles in the household.

How is the $600 subscription taxed? Is it like a lease payment taxed at 8% in PA? This is important to help calculate the actual monthly cost to own.


Here is my comparison as to the cost of ownership/subscription.

In the past, we would by a car and own it for 10 years. Payments for the car would stop after 5 years of financing, but insurance, extended warranty costs and maintenance like tires, brakes and repairs would continue to accrue. With the subscription, assuming you stayed on it for the 10 years, these would all be included.

Assumptions: Years 3-10 Volvo will offer a plan that is comparable to the $600 plan now being offered.

If I bought outright and financed at 2.89% I would be paying about $750 per month for 60 months, add to that an extended warranty with low deductable for years 3-8 for $4000 (?) insurance of $80 per month($9680) and 2 sets of tires and 7 years oil changes, brakes and repairs ($8700 total). At the end you have a 10 year old vehicle worth $2000(?)

$63,380 -- 10-year Total cost of ownership buying (car payments/insurance/ext warranty/repairs and maint) Am I forgetting anything?

$72,600 -- 10 year Total Subscription cost (120x $600)

Subscription costs $9,220 more ($77 per month)

I have rationalized this $77 per month overage with the fact you always have a very new car and the benefits of that. Also, the flexibility to switch this car out after 1 year or 2. This being the first model year of a new platform, there may be quirks that are worked out in year 2 or 3 of the platform. Also, I believe this is a very transitional period in the auto market, with the advent of electric cars and self driving technology, the cars may advance faster than they have in previous decades. Also, if buying, there would be no warranty for years 8-10 based on my model.

There may be tax advantages that I may be able to utilize, but I need to talk to my accountant.

I am planning on returning to this thread with updates on how the process plays out in the coming weeks and months.

Volvo has already charged my credit card for the $500 and will apply this to the first $600 payment. This is a refundable deposit that can be refunded if we never enter into a subscription contract.

-- There was an error when submitting my credit card info on the subscription sign up website. After submitting my Credit card number It went to a blank screen stating "An error has occured" in text at the top of the page so I went back over the process and submitted a second and third time. Still errored. I tried my wife's credit card on the same Citibank Visa account and got the same error... Sure enough, minutes later, I received 2 confirmation emails with order numbers. So I will have to cancel one of the orders when support reopens on Monday.


I have received a confirmation email for the subscription which included these 3 messages.

Next steps
Our Volvo Concierge will guide you through the process and will be in touch soon. (Within 7 days)


--Credit application
30 days prior to your vehicle delivery, we will contact you via email providing a secure link to Volvo Car Financial Services to submit your online credit application.

-- Insurance enrollment
30 days prior to your vehicle delivery, we will contact you via email providing a link to Liberty Mutual to complete your insurance enrollment and obtain your insurance certificate.
 

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I'm looking for input from anyone who has knowledge of how the subscription plan and process works and also analysis of my own debate on whether it is "worth it".

Care by Volvo XC40 Subscription Link


I am working on the economics of the Care by Volvo Concierge subscription program and have just today, January 14, 2018, put the $500 refundable deposit and ordered my wife's Amazon Blue XC40 Momentum.

Here is a link to the vehicle build.


The confirmation screen stated the car would arrive in April - May 2018.

I have ordered the XC40 Momentum with an MSRP of about $41,445 excluding 6% PA tax.

Benefits of the subscription:
A well-appointed XC40 with many of the most popular Packages: Premium, Vision, Heated Front Seats/Heated Steering Wheel. Options: Panoramic Roof, 19" 5-Spoke Black Diamond Cut Alloy Wheels.
The vehicle will always be less than 2 years old which keeps up with advancements in technology and assumed reliability.
Maintenance, wear and tear items like brakes and a tire/rim warranty are included.
Insurance is included in the monthly subscription. Roughly $80 value per month.
Up to $1000 in excess wear included ie: Scratches, dents, interior wear.

Limitations:
15,000 miles per year (She only averaged 10,000 per year over the past 12 years)
You don't own the car after all the payments. Limited customization.
Congrats on the decision to get one, through the Care by Volvo program!

I see you live close to my old digs (albeit different county); spent 26 years in Chester County :)

Are you working with Stillman Volvo, in West Chester?

Questions I have about the plan:
I will try to answer them

Is it possible to do a slight modification to the included order that I would pay for? Wife really wants the White roof and mirror caps for $300.
You cannot custom order from scratch, however there are going to be quite a few pre-built choices to me marketed under the Care by Volvo program; you will have to pick from that list. Mirror cap choices are not listed, yet, under the Port-installed accessory program. If that happens, your retailer or Volvo Concierge will let you know.

If I want to buy the car at the end of the subscription, what is the cost?
I do not believe that will be a possibility. If you want to go down that path, I suggest you explore leasing the car.

How does the insurance work? Who is covered? My wife and I are in our 50's with clean driving records but we have an 18-year-old son, who has a clean record, but "he's 18" He would not be the primary driver and there are several other vehicles in the household.
If it works in the same manner that our employee leases work, anyone within your household will be covered. However, Volvo Concierge will be the best people to answer that.

How is the $600 subscription taxed? Is it like a lease payment taxed at 8% in PA? This is important to help calculate the actual monthly cost to own.
I thought PA lease tax was 9%. Did it change? But, yes, that will be added to the payment.
 

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Thanks for your answers.

Yes, I am working with Stillman Volvo in West Chester. This is the same dealership that provided my '16 XC90. We were at Stillman on Saturday asking about the OSD program for the XC40 when we seriously decided to consider the Care by Volvo subscription. They are very nice.

Upon further research, the PA Sales tax on a lease is 9%.
 

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I thought PA lease tax was 9%. Did it change? But, yes, that will be added to the payment.
Question re: the tax. Is this based on the whole $600 (or $700) payment, or just the portion of the payment that applies to the value of the vehicle? It doesn't seem right that you'd have to pay the sales tax component on the insurance and possibly other portions of the subscription. (The subscription payment looks to be not quite twice the cost of a standard leasing arrangement.)

Also, are higher liability limits available for the insurance coverage? I'm not real impressed with the $250/$500/$100K limits that are included. Those are not adequate to serve as underlying limits for my current umbrella policy.
 

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I think the fact that I can’t get the exact features/options that I want is a dealbreaker for me.
Yes, of course. If you want a specific car, with regards to options and trim level, Care by Volvo is not for you.
 

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Question re: the tax. Is this based on the whole $600 (or $700) payment, or just the portion of the payment that applies to the value of the vehicle? It doesn't seem right that you'd have to pay the sales tax component on the insurance and possibly other portions of the subscription. (The subscription payment looks to be not quite twice the cost of a standard leasing arrangement.)
The entire payment. The payment is not broken down to x amount for the car and y amount for insurance plus z amount for maintenance. It is like a lease payment only that Volvo has included everything in it so the end user does not have to pay separately.

Also, are higher liability limits available for the insurance coverage? I'm not real impressed with the $250/$500/$100K limits that are included. Those are not adequate to serve as underlying limits for my current umbrella policy.
That is something to ask the Volvo Concierge people. Remember, you are just using someone else’s car for 2 years...
 

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Thanks for your answers.

Yes, I am working with Stillman Volvo in West Chester. This is the same dealership that provided my '16 XC90. We were at Stillman on Saturday asking about the OSD program for the XC40 when we seriously decided to consider the Care by Volvo subscription. They are very nice.

Upon further research, the PA Sales tax on a lease is 9%.
Yes, they are very good people; that is where I started with my Volvo journey and was there for almost 13 years :cool:
 

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Discussion Starter #9 (Edited)
Question re: the tax. Is this based on the whole $600 (or $700) payment, or just the portion of the payment that applies to the value of the vehicle?
Good point about the sales tax, it really should not be charged on the insurance portion of the subscription, or even the warranty portion for that matter.

I also agree that the insurance coverage is not as high as it should be. I wonder if there is an option to upgrade that.

I'll ask about both of these points when we get to that point.

As far as it being twice the cost of a lease, would it really only cost $300 per month to lease an XC40 for 2 years with 15,000 per year mileage allowance, tire warranties and nothing down? That seems pretty low for a 2 year lease that doesn't have a 7,500 mile limit, but I haven't priced it out.

Is there an online resource to price what a straight up lease of the XC40 would cost online yet? Will a regular lease even be offered?
 

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The entire payment. The payment is not broken down to x amount for the car and y amount for insurance plus z amount for maintenance. It is like a lease payment only that Volvo has included everything in it so the end user does not have to pay separately.
Ouch. Since the traditional lease offers I've seen are only about 60% of the subscription payment, than means I'd have to pay, in my case, 8.5% tax on the remaining 40% that wouldn't normally be subject to tax.

Fascinating how quickly this has gone from looking like a very interesting idea to "no thanks"!
 

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Ouch. Since the traditional lease offers I've seen are only about 60% of the subscription payment, than means I'd have to pay, in my case, 8.5% tax on the remaining 40% that wouldn't normally be subject to tax.

Fascinating how quickly this has gone from looking like a very interesting idea to "no thanks"!
Your "traditional" lease offers are on a base car, with 10K miles a year. So yes, it'll be cheaper. For a car that's $6K+ less and 5000 miles fewer a year.

So by your logic, your lease payment will be $360/mo with no money down? Even on a base car - good F luck getting that! haha
That's the problem with people. Don't pay attention to what's what. OMG, $99/mo lease! So cheap! $12K down? yeah, awesome, $99/mo yay!.... SMFH
 

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From the description, CARE is like renting an apartment. There's no option to ever purchase, and you'll always have a payment. However, the maintenance (repairs) are included and you step into a new model every 1 or 2 years.

A lease seems to make better sense for those not wanting perpetual payments. At the end of a lease, one reserves the option to purchase the vehicle. Of course, you can pass on purchasing and jump into another lease that provides a newer car.

Care vs Lease vs Buying is a matter of lifestyle choice.

1. Want a new Car every year or two? Want Insurance Bundled? Want maintenance included + Wear? Don't mind perpetual month payments? Select Care

2. Want to customize your vehicle? Have an option to buy at the end? Or maybe the ability to jump into a new car every 2-3 years that you've customized?Select a Lease.

3. Want to own and keep the car long term. Be free of payments and no interest in upgrading often? Buying makes sense.

At the end of the day, you're spending a lot of money and it's just a matter of how you want the cash spent.....

Buying suffers depreciation to the point a car bottoms out at a minimal value over the years.

Leasing gets you in a new car....Or you can buy and settle on the one you want after the lease ends....So a mix of either "Payments" Or "Depreciation" depending upon your choice.

Care = Always a new car...But never ending payments.
 

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As far as it being twice the cost of a lease, would it really only cost $300 per month to lease an XC40 for 2 years with 15,000 per year mileage allowance, tire warranties and nothing down? That seems pretty low for a 2 year lease that doesn't have a 7,500 mile limit, but I haven't priced it out.

Is there an online resource to price what a straight up lease of the XC40 would cost online yet? Will a regular lease even be offered?
Looking at the lease pricing on the build site, I saw that for a well equipped T5 Momentum (about $41.5K similar to what I see on the "Care" versions) one would pay $355/month, but "Based on 36 months, $4,340 due at signing, $0 security deposit required. 10,000 miles per year, additional mileage charge at $.25 per mile."
 

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From the description, CARE is like renting an apartment. There's no option to ever purchase, and you'll always have a payment. However, the maintenance (repairs) are included and you step into a new model every 1 or 2 years.

A lease seems to make better sense for those not wanting perpetual payments. At the end of a lease, one reserves the option to purchase the vehicle. Of course, you can pass on purchasing and jump into another lease that provides a newer car.

Care vs Lease vs Buying is a matter of lifestyle choice.

1. Want a new Car every year or two? Want Insurance Bundled? Want maintenance included + Wear? Don't mind perpetual month payments? Select Care

2. Want to customize your vehicle? Have an option to buy at the end? Or maybe the ability to jump into a new car every 2-3 years that you've customized?Select a Lease.

3. Want to own and keep the car long term. Be free of payments and no interest in upgrading often? Buying makes sense.

At the end of the day, you're spending a lot of money and it's just a matter of how you want the cash spent.....

Buying suffers depreciation to the point a car bottoms out at a minimal value over the years.

Leasing gets you in a new car....Or you can buy and settle on the one you want after the lease ends....So a mix of either "Payments" Or "Depreciation" depending upon your choice.

Care = Always a new car...But never ending payments.
Well put.
 

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Looking at the lease pricing on the build site, I saw that for a well equipped T5 Momentum (about $41.5K similar to what I see on the "Care" versions) one would pay $355/month, but "Based on 36 months, $4,340 due at signing, $0 security deposit required. 10,000 miles per year, additional mileage charge at $.25 per mile."
Not sure if you're referring to the numbers it spits out, but here's the breakdown of said numbers.
With $0 out of pocket, you will be paying $355 + ($4340/36) + $12-15/mo for wheels+tires coverage + $70-$120 insurance+ $who knows how much more for 15K miles a year if you need it.
So let's tally this up.

So the total monthly payment to compare to care will be at least about $560 and as high as $600+.
 

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I don't understand people's concern with option-to-buy at the end of a lease. It's not like they're going to sell you the car for free. It has zero influence on my decision making whatsoever.
 

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Looking at the lease pricing on the build site, I saw that for a well equipped T5 Momentum (about $41.5K similar to what I see on the "Care" versions) one would pay $355/month, but "Based on 36 months, $4,340 due at signing, $0 security deposit required. 10,000 miles per year, additional mileage charge at $.25 per mile."
Thanks for running the numbers, I could not find the tool to price a conventional lease.

So, comparing the two, if you amortize the $4,340 down over 36 months, the real monthly is $120 more per month bringing the real $0 down monthly to $475 per month for 36 months. The $125 more per month for the subscription going toward the tire warranty, $1,000 in excess wear coverage, 5,000 more miles per year (a $1,250 yearly value or $100 per month, if you use all the 15K allowed), and the benefit of getting a new vehicle for year 3.

it is similar to the 3 year lease which breaks down to $355 (monthly)+$120 (down)+$100 (miles over 10K) total $575 especially if you are going to use it for all of the allowed 15K miles of the subscription, and then for the extra $25 you get insurance, tire warranty, $1k Excess wear allowance, concierge (whatever that is) and the added benefit of only having to keep it for 2 years before upgrading to the newest. I suppose you could get the miles cheaper than .25c if you buy them up front but that is a side issue.

It may be a little more per month for the 2-year subscription versus the 3-year lease, but not a lot more and there are certainly added benefits.
 

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It may be a little more per month for the 2-year subscription versus the 3-year lease, but not a lot more and there are certainly added benefits.
In a high insurance rate state (ahem, NJ) "Care" is better than a lease.
 
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