Now you can pay even more for your car!

[poetdereves]

https://jalopnik.com/volvos-car-subscription-program-starts-at-600-and-seem-1820854228/amp

And I thought leasing was a waste of money!! I can’t imagine paying the amount of my mortgage for two years to use a car and STILL not own it at all. When will people learn that if a dealership comes up with an easy new way to get into a car, it’s because THEY can make some big money.

[enb123]

I saw that this AM and was entertained by the "I’m really struggling to find a downfall to it" angle.  There were some good comments, though, like "The downfall is that you spend 14,400 over 2 years and at the end you don’t own a car."  But of course a lot of people were on board, too. 

I wonder how many of these articles are directly purchased by manufacturers?  It reminds me of the recent spate of "The iPhone X is worth every penny of that $1K price!" articles.  I suppose enough people actually feel that way to generate articles like this without any incentive, but it seems equally plausible that Volvo/Apple/whoever plants them.  Either way - good grief!

[paddedhat]

Sorry, but this is brilliant. Just because it's not a smart way to spend your hard earned money, and you and I would never do it, doesn't make it any less brilliant. They are going after anybody who is a regular purchaser, or lessee, of premium brands. That target customer is already spending a similar amount, and has to deal with a dealer, an insurance agent, repairs, maintenance, and has the hassle of returning, or selling the vehicle, after they are tired of it, or the lease is up. Now they pay the monthly fee, put gas in it, and in two years or less, drop it off at the dealer. I have no interest in driving a overpriced car to impress others, and like most here, am about as far from their target as it gets, but they will knock this one over the fence, since they can provide what their customer wants in about as hassle free a manner as possible. Good for them.

[ducky19]

Honestly, I see this as a better alternative to leasing by far. That $600/mo covers everything but gas - repairs, replacement of wear items, tire/wheel coverage, concierge service, roadside assistance... it even covers your insurance! It's a lot of money - no argument there - but I think their target market isn't someone struggling either. For someone in a large metro area making $300,000 plus, $600 isn't going to break the budget, and they are always driving a vehicle no older than two years. Not mustachian for sure, but not the craziest thing I've seen either.

[poetdereves]

Fair enough. I guess the people that will pay for the one-stop-shop perks are people who will make enough to “afford” it. That amount of money for a car is just something I cannot fathom with what a car offers. Even with maintenance and insurance I probably pay less than $600 a year and never feel inconvenienced. I couldn’t imagine $600 a month. And I am a bit sceptical on what the dealerships will actually cover in the long run. It’s a pretty common reality that people miss the fine print of financing agreements and end up stuck with bills for things the thought would be covered. Only time will tell...

[paddedhat]

I'm betting that Volvo is keeping a tight leash on the dealers in this deal, and that you would have to go to the very outer edge of, "seriously, you think we should cover that?", when it comes to how willing the dealer is to jump through hoops to keep you satisfied in this deal. I once worked for an evil genius of a company owner. He was a big fan of making a customer "sickly dependent" as he termed it. His theory was to perform so much, so well, that the customer relaxed and became quite hooked on everything you do for them, and how much easier life is, with you in the picture. At that point, you owned them, and they would tolerate way more than rational, like very healthy price increases. He was usually right.
After two years of nothing but buying gas, a monthly payment, and absolutely zero drama, or hassle, you aren't going to the Mercedes dealer, when you return your first Volvo.

[ketchup]

The insurance being baked in is something I did not expect.  Still though, $600/mo at a 15,000/yr cap means $0.48/mile (best-case) which is about double the all-in cost I pay to drive my car (which is actually also a Volvo, but a 2001).

EDIT: Forgot that doesn't include gas, so that bring it up to probably $0.58/mile.

But it's got to be better than leasing.

[JLee]

Price $500k in insurance on a 2018 model year car and that $600/mo becomes a lot more reasonable than it appears at first glance.

[Sid Hoffman]

Price $500k in insurance on a 2018 model year car and that $600/mo becomes a lot more reasonable than it appears at first glance.

Same thing I was going to point out.  That alone could be $100/month or more in value.  Keep in mind, this program isn't for people on this forum, but for people who already are used to always being in late model luxury cars.  No separate insurance cost, no maintenance or repair cost, and it's something that the target demographic is already doing anyway.

I view this as one of the steps on our way away from personal ownership of cars and moving towards subscription and per-use (like Lyft or Maven) models.  Those are fantastic for FIRE people who may not need a car more than a few times a month as well as the working poor who need transportation and can't afford the breakdowns and repairs that come with owning a cheap car.  Sure, today it's $600/month, but if you can get a Civic for $300/month some day or a mixed use program where you get 200 hours a month of usage for $200/month, that's when we'll see personal car ownership really start going down.

[Dmoceri91]

Honestly, I see this as a better alternative to leasing by far. That $600/mo covers everything but gas - repairs, replacement of wear items, tire/wheel coverage, concierge service, roadside assistance... it even covers your insurance! It's a lot of money - no argument there - but I think their target market isn't someone struggling either. For someone in a large metro area making $300,000 plus, $600 isn't going to break the budget, and they are always driving a vehicle no older than two years. Not mustachian for sure, but not the craziest thing I've seen either.

You say this but realistically this will be done by some junior level professional who is making like 50k a year.

My wife has a friend who literally works a 3rd job just to pay for the 2018 BMW X3 lease that she then uses to drive from one job to the next.

[Just Joe]

What? Not delivering pizzas in her BMW?

[gooki]

Sure, today it's $600/month, but if you can get a Civic for $300/month some day or a mixed use program where you get 200 hours a month of usage for $200/month, that's when we'll see personal car ownership really start going down.

This is it. Volvo arent fucking around, they're trying to change the business model for car ownership while they're busy working on a self driving future.

[MrsPete]

You say this but realistically this will be done by some junior level professional who is making like 50k a year.

I was going to say the same thing.  Well, I was going to say a 27K just-out-of-college entry-level worker, but let's not quibble. 

I know LOTS of people who buy into the "I'll always have a car payment" concept, and I can see this appealing to them.

The one positive I saw:  When you're "a member", you can borrow other cars from their line.  So if you were going out of town and need space, you could "borrow" a larger car. 

[kelvin]

Agreed. Not for me, but this is a brilliant business model. Volvo can probably get a bulk deal on the insurance, as well.