The two main ways to buy a car is to either buy or lease. Both have benefits depending on what you want to do. However, there is a new method being looked at by car companies. Having a subscription to the car company instead of purchasing.
How Would It Work?
Some companies have currently implemented programs, other than buying or leasing. Cadillac recently shut down there subscription program to rework it. Other companies such as BMW and Porsche have a system as well, but it is limited. BMW only gives you access to complimentary gas for two weeks. The Porsche Passport program is only implemented in Atlanta where they’re headquarters is located. The only company that has a full program currently is Volvo. It is called “Care By Volvo”.
This service has you pay a monthly fee for the car. However, that fee contains car insurance and vehicle maintenance that you can use anytime. You also get a vehicle upgrade after the first 12 months. This service is the only one that is currently available, of its kind. It has been working well for Volvo and its customers.
There hasn’t been a major push by other companies to make their own service yet. But it has been talked about enough that it may be coming soon. For a subscription service to succeed, companies need incentives for consumers.
Having insurance and car maintenance in the monthly payments is nice to see. However, Volvo’s monthly payments start at $700 at least which is pricey. There are only 2 car models you can choose from, an XC40 SUV and an S60 sedan. Those are mid-tier vehicles price-wise from Volvo. It would be great for Volvo if they offered more options.
The company willing to take the risk of using this same payment model for all of its products will have great success. Millennials are looking for affordable options to make having a car easier. A $700 car payment per month just isn’t in the budget for a lot of younger adults. I believe a subscription service is a step in the right direction for everyone long term. Until then leasing and financing are our only options.
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