Care By Volvo subscription program revs up, adds models
Volvo's all-in-one, flat-rate subscription plan adds XC60, XC90 and V60 Cross Country models amidst other improvements.
Care By Volvo, the Swedish automaker's monthly subscription program, has arguably been the only such plan to gain significant traction in America's new-car marketplace. Now, Volvo is doubling down on the program, announcing expansion details that include more markets and more vehicles for its all-in-one, flat-rate monthly payment plan.
Developed as an alternative to traditional vehicle leasing and purchase financing, Care By Volvo hasn't been without its hiccups and controversies. The novel program has labored to overcome regulatory hurdles while slowly expanding state by state, and the plan has even rankled some members of the company's dealership body. In fact, the California New Car Dealers Association asked the automaker to stop offering CBV in the Golden State back in 2018, and the California DMV is investigating the program for possible violations. Despite these obstacles, Care By Volvo appears to be meeting with greater consumer interest than any other automaker subscription program, and Volvo is understandably keen to capitalize on that momentum.
First offered on select versions of Volvo's entry-level XC40 crossover last year, the program recently expanded Care By Volvo to include the company's new S60 sport sedan. Now, CBV is adding 2020 XC60 and XC90 SUV models, along with its V60 Cross Country lifted wagon. Interestingly, despite wide spreads in vehicle prices, there's very little variation in Care By Volvo monthly pricing. For example, an XC40 T5 AWD in Momentum trim retails from $37,340 delivered, and runs $700 a month through CBV. The XC90 T6 AWD in Momentum trim retails for $57.940 delivered, but only costs $800 in installments -- just $100 more per month. In other words, if you're considering joining the program, bigger might be better from a value perspective.
Care By Volvo pricing | Per month |
XC40 T5 AWD Momentum | $700 |
S60 T5 FWD Momentum | $700 |
XC40 T5 AWD R-Design | $750 |
S60 T6 AWD R-Design | $750 |
V60 Cross Country T5 AWD | $750 |
XC60 T5 AWD Momentum | $750 |
XC90 T6 AWD Momentum | $800 |
Care By Volvo involves a two-year agreement, with customers given the option to change to a different vehicle in the program after the first 12 months. When CBV was first announced in late 2017, the program started at $600 a month.
At a media ride-and-drive event in Banff, Alberta, Volvo spokesperson Jim Nichols confirmed to Roadshow that "...well over 95% of Care By Volvo subscribers are first to the Volvo brand." Converting first-time customers and so-called conquest buyers (those who presently own vehicles from other brands) is a difficult and particularly sought-after accomplishment among automakers, making 95% a very impressive statistic.
According to Nichols, Care By Volvo is now offered in 49 of 50 US states. New York -- notoriously viewed as America's most problematic auto insurance market for regulatory reasons-- remains the lone holdout. The program recently launched in Canada, as well.
While Volvo officials Roadshow spoke with declined to estimate how many customers are signing up for Care By Volvo on eligible vehicles, Nichols did offer some context, stating, "I will say the percentage is in single digits."
Volvo has been working to remove bottlenecks in the Care By Volvo signup and vehicle selection process, too. For starters, the CBV app, available on Android and Apple IoS platforms, is now a one-stop shop for both credit and insurance approval. According to Volvo, it's possible to apply and be approved for a subscription within five minutes.
Additionally, Volvo is working with its insurance partner, Liberty Mutual, to reorganize and streamline the plan's insurance component. At present, individual policies are issued to individual customers, and as a result, it takes 24 to 48 hours for a policy to bind, delaying subsequent vehicle deliveries by a day or more. The automaker is working with Liberty Mutual on a new arrangement where an insurance card can be printed out right at the dealer in order to speed up the transaction. Right now, that process is in place in seven states, with plans calling for nationwide rollout by year's end.
Getting an insurance card doesn't mean much if there are no vehicles available, of course. "We're continuing to work with our retail partners on not only the subscription process, but also the delivery process," says Nichols. At present, Care By Volvo vehicles all come from central stocks held at shipping ports. If you're near to the ports (Newark, New Jersey and Los Angeles, California), you can probably get a car in 24 hours, but for other markets, it can take days. Volvo is working to change its process so that vehicles can be pulled directly from dealer stock for quicker delivery.
Volvo says a vehicle can be applied and subscribed to within five minutes.
Other automakers' pilot subscription programs have functioned very differently from Volvo's scheme, including Book By Cadillac, which was halted, only to be rebooted after a cold reception by consumers. The initial program called for hefty $1,800 monthly payments, but allowed users to swap vehicles 18 times per year to suit their needs, from sedans to SUVs. Mercedes-Benz Collection, the German automaker's subscription plan, has a similar structure, with varying vehicle access by tier, costing between $1,595 and $2,995 a month.
While Volvo has not disclosed how many customers have signed on to Care By Volvo, it looks like it will become an increasingly important tool for the automaker going forward. The key to the program's long-term success may not just be convincing consumers about the merits of the program -- it might just be getting more dealers and regulators onboard.