Volvo announces new subscription car lease option

Elessar

So Volvo have announced a new type of car leasing they're calling "Care by Volvo". It's basically a subscription service where you pay a flat monthly fee over a couple of years which gets you the car, all maintenance and insurance in one flat monthly fee. No deposit, no balloon payments, just the flat fee. 24 Months later, swap out the car for a newer one.

Source

Very interesting approach - the I.T. claiming a monthly of €699 for its new compact SUV. I'm not sure if this will really run here, for some reason consumer vehicle leasing is not popular in Ireland. I always wondered why - when I took a look at some options for leasing in Germany for example, I could get a brand new Golf GTI with DSG gearbox, with no deposit, and a few options, for less than €400/month. Here, it would cost me €12k deposit and a monthly of €450, plus the balloon payment of €15k at the end to own. I would love the option to lease at those rates - makes you wonder why anyone would bother buying straight out!

Do you think this will take off here?

Eric Cartman

with the EU ruling on VRT for leased cars not being paid all up front, it could become a very viable way to own high end cars. I don't know if it would make too much sense on a trend line golf, but an XC90 / Bentley / Range Rover etc… it could play very well with an aspirational group of people.

Atlantic Dawn

Good look to them if they can get the insurance included for that price.

Toots

I wonder whether that would be fully comp insurance or the basic third party.

redcup342

Elessar wrote: »

when I took a look at some options for leasing in Germany for example, I could get a brand new Golf GTI with DSG gearbox, with no deposit, and a few options, for less than €400/month. Here, it would cost me €12k deposit and a monthly of €450, plus the balloon payment of €15k at the end to own. I would love the option to lease at those rates - makes you wonder why anyone would bother buying straight out!

Do you think this will take off here?

No way you would get a fully operational lease for that in Germany.

Maybe with a minuscule amount of kilometers

biko

I asked the man behind the scheme how insurance would be worked out as Ireland in particular was a nightmare for younger drivers. Thomas Anderson said that Volvo would negotiate with the insurers directly to get a good deal and that this was part of the whole package.

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ShadowHearth

700eu a month is a lot of money for a car you will never own.
I really dont see appeal in this deal.

With pcp I at least know I still will get something in the end of it.

How much are those new mini volvo suvs go for?

For Forks Sake

ShadowHearth wrote: »

700eu a month is a lot of money for a car you will never own.
I really dont see appeal in this deal.

With pcp I at least know I still will get something in the end of it.

How much are those new mini volvo suvs go for?

Starting around €40k I believe (2.0 190hp diesel AWD)

Vicxas

ShadowHearth wrote: »

700eu a month is a lot of money for a car you will never own.
I really dont see appeal in this deal.

With pcp I at least know I still will get something in the end of it.

How much are those new mini volvo suvs go for?

Yeah, a massive lump sum.

24 months for a brand new car at 699 does seem like a really good deal, i wonder what the caveats are attached to it (mileage, wear and tear, etc)

DaveyDave

This doesn't sound that far-fetched. On my PCP Golf Highline if you factor in the 6,500 deposit on the 325 monthly payments it would equate to €595 for the 24 months without insurance or servicing. €712 in the first year if you include insurance (€1,400/yr).

I wonder would the insurance only apply to people with policies under €1,000 before the price starts going up? When the likes of Nissan offered free insurance with the Qashqai, limited to policies no greater than €700 or something along those lines.

Considering how many low policies that were €4-500 are now nearly a grand this will be interesting.

The XC40 starts at €47,450, if they did petrol I'd be more keen on the V60 R-Design starting at €40,940

Kenny Logins

ShadowHearth wrote: »

700eu a month is a lot of money for a car you will never own.
I really dont see appeal in this deal.

With pcp I at least know I still will get something in the end of it.

How much are those new mini volvo suvs go for?

Seems like a great idea to me. One monthly bill to cover (almost) all motoring expenses and a new car every two years. Who cares if you never own a rapidly depreciating asset?

Kenny Logins

DaveyDave wrote: »

This doesn't sound that far-fetched. On my PCP Golf Highline if you factor in the 6,500 deposit on the 325 monthly payments it would equate to €595 for the 24 months without insurance or servicing. €712 in the first year if you include insurance (€1,400/yr).

I wonder would the insurance only apply to people with policies under €1,000 before the price starts going up? When the likes of Nissan offered free insurance with the Qashqai, limited to policies no greater than €700 or something along those lines.

Considering how many low policies that were €4-500 are now nearly a grand this will be interesting.

I'd imagine a manufacturer could negotiate much better discounts than a lone punter.

Dravokivich

Kenny Logins wrote: »

Seems like a great idea to me. One monthly bill to cover (almost) all motoring expenses and a new car every two years. Who cares if you never own a rapidly depreciating asset?

The 24 months at 699 will cost 16,776. I don't think removing concern for depreciation is a benefit here. You'd need to be earning quite a bit to justify getting into such a scheme.

Kenny Logins

Dravokivich wrote: »

The 24 months at 699 will cost 16,776. I don't think removing concern for depreciation is a benefit here. You'd need to be earning quite a bit to justify getting into such a scheme.

Well yeah, obviously it all depends on the price of the car and your salary etc...

I think Volvo's subscription model in general could work well for a lot of people though.

R.O.R

This looks to me like it's the first step towards a mobility solution rather than something everyone owns. Next step after this is you pay a monthly fee to have usage of something when you need it, not a specific vehicle, and that's the way the whole industry is gearing itself up towards.

I missed the very start of the live launch, but started watching just in time to catch the presenter saying it's going to be the same fee around Europe (possibly on a global basis - can't remember). €45,000 + for what it is seems like a high price to me, but €700 a month is pretty reasonable based on fully inclusive, for 2 years, when you break it down.

Factor in circa €100 a month for insurance, €60 ish a month for tyres and maintenance and €15 for road tax. Brings it down to €525 a month to "rent" a €45,000 car for 2 years.

Pulled the maintenance out of thin air as actual costs would vary depending on mileage - no idea if there is a mileage limit on the contract.

Slightly worrying to someone in my line of work - if this sort of thing becomes commonplace, I'm out of a job.

dil999

R.O.R wrote: »

This looks to me like it's the first step towards a mobility solution rather than something everyone owns. Next step after this is you pay a monthly fee to have usage of something when you need it, not a specific vehicle, and that's the way the whole industry is gearing itself up towards.

I missed the very start of the live launch, but started watching just in time to catch the presenter saying it's going to be the same fee around Europe (possibly on a global basis - can't remember). €45,000 + for what it is seems like a high price to me, but €700 a month is pretty reasonable based on fully inclusive, for 2 years, when you break it down.

Factor in circa €100 a month for insurance, €60 ish a month for tyres and maintenance and €15 for road tax. Brings it down to €525 a month to "rent" a €45,000 car for 2 years.

Pulled the maintenance out of thin air as actual costs would vary depending on mileage - no idea if there is a mileage limit on the contract.

Slightly worrying to someone in my line of work - if this sort of thing becomes commonplace, I'm out of a job.

Surely if flexible leasing is the way to go, existing leasing companies are in pole position to take advantage of that. Not sure why you think it would cause you to be out of a job.

dil999

PCP is the stepping stone to this type of financing model. The more people get used to PCP arrangements, the easier the concept of leasing will be accepted.

R.O.R

dil999 wrote: »

Surely if flexible leasing is the way to go, existing leasing companies are in pole position to take advantage of that. Not sure why you think it would cause you to be out of a job.

Because they are cutting out the middle man and the manufacturer is leasing direct to the public, and the dealer just gets a handling fee from the manufacturer for prep and admin.

Not quite sure where we'd make money in that situation.

Squeaksoutloud

47k starting price! Sure the S90 is less than that and is 2 classes up.

kirving

Interesting approach. I added up all the cost of motoring for me, and it worked out at €9500 per year while I was paying off the car at €400pm - for a car that was initially 6 years old, and was paying it off until it was 8 years old.

Now, that does include €2500 fuel, and absolutely everything else associated with owning and running a car. Remove the fuel and you're at €7k. Volvo charging €8400 per year for a brand new car seems decent value to me to be honest.

dil999

You would expect an an enterprising main dealer or leasing company to be proactive and offer some viable leasing options for private consumers.
The "JointheFleet" startup company, Dash Apps Ltd, have got Axa on-board for a short term peer to peer leasing idea. I am sure an established main dealer backed by a manufacturer, could easily do the same.

Marcusm

R.O.R wrote: »

Because they are cutting out the middle man and the manufacturer is leasing direct to the public, and the dealer just gets a handling fee from the manufacturer for prep and admin.

Not quite sure where we'd make money in that situation.

An independent lessor might be in trouble but the skill base requirement would widen. RV risk management is still a skill outside many distributors plus many fleet operators would not be on a single car brand. There’s life in the old dog yet.