The retail world is always evolving, and car manufacturers have to keep up. Almost every vehicle buyer goes online for at least some of the shopping experience, and that’s where Volvo is going also with its new Care by Volvo subscription plan.
It works similarly to a lease but with some key differences, including a specific selection of vehicles at one price, no down payment, online ordering, and such services as winter tire swaps and minor-damage repairs.
“The big deal here is convenience,” said David Carroll, national sales manager for Volvo Car Financial Services Canada. “It’s simple, it’s easy, and it’s accessible for everyone no matter where they live.”
The ordering system went live in mid-October, launched by initially offering the all-new 2019 Volvo S60 sedan and V60 wagon. It mirrors a system already in place in the United States, but with some Canada-specific features.
Here’s how it works. The plan allows you to order either a S60 or V60 in Momentum trim, at $949 per month; or either one in R-Design trim for $1,049 per month, for a maximum term of 24 months. You get the trim level’s standard features, without any available options, because the whole idea is a single fixed price for the car and its services. Your only choices are the colours. Freight and PDI charges are included, as is a three percent APR (annual percentage rate) fee.
You don’t make a down payment but you do have to pay the sales tax, because a single Canada-wide price couldn’t be reached if the various provincial tax levels were included. The American plan also includes insurance, but because three of our provinces have government plans, Canadian drivers have to get their own coverage. Ownership goes to the buyer for the plan’s duration and so it’s the buyer’s responsibility to licence the vehicle.
Although it’s a two-year plan, it opens up after a year if you want a newer car than the one you’re in. Any time between 12 and 24 months, you can sign up for a new Care by Volvo plan, bring in your current car, and take home your new one with no extra fees. As with a regular lease, once you finish the two-year plan, you can buy the car outright, bring it back and walk away, or spin over into a new plan.
As with a lease vehicle, there is a mileage limit. Once the plan is up at the end of two years, you’ll pay sixteen cents a kilometre for every one you’ve racked up over 48,000 km.
On the bonus side, the car comes with a set of winter tires and rims, and the dealer will swap them out twice a year and store the unused set – and if you move far enough away, the company will ship those tires to the retailer closer to you. Maintenance is part of the deal, including wear-and-tear items like brakes and wiper blades; tire road hazard warranty; and appearance protection. “This is dings and dents, a stain on the seat, a chip in the windshield, or we’ll even replace the key fob, with no deductible or extra fees,” Carroll said. There’s a limit of $1,000 per fix-the-oops visit, for a total of $5,000 over the two-year plan, although Carroll added that for collision damage, you’ll likely be going through your insurance company.
The program doesn’t completely eliminate the dealer visit, but it does streamline the process and is very easy to use. It starts with visiting a special Volvo website, on anything from a phone to a laptop, and deciding on which of the models you’d like. From there, you choose your colours and the retailer you prefer.
Once that’s entered, you’re contacted by someone from Volvo’s concierge team, headquartered in Toronto, who follows up with a call to finalize the information. A $500 deposit is required, which is applied against the first payment, and which is refundable if you change your mind up until the car’s delivery. You get contacted again thirty days prior to delivery to complete a credit application. When the car arrives at the dealer, you go in, sign the documents that are already printed and waiting for you, and drive home in your new ride. If you didn’t originally opt to go in for a test drive before ordering, it’ll be the first time throughout the process that you need to visit the dealership.
Unlike the program offered by Genesis, where it’s possible to have someone bring a car to you for test drive and delivery, Volvo has an established brick-and-mortar dealer network – 37 stores across the country – and makes sure it’s physically involved at some point. While that’s part of keeping one’s franchisees happy, it also allows Volvo to offer that single-price structure to anyone in Canada who’s willing to go to a dealer. “We have customers in the Yukon who will drive down to get their car,” Carroll said. “I can’t reasonably service that person (with new-vehicle delivery) and I have to provide a reasonable service to everyone.”
As far as getting someone to come out from your reasonably local dealership to pick up your car when it needs maintenance and leave a loaner, stay tuned. As Carroll said, “We don’t have pickup and delivery… yet.”
Part of being able to offer such a plan at one price is in handling the process consistently, which includes the ordering system. Those who go into a dealership just to shop around can choose the Care by Volvo program if it appeals to them over a conventional lease or financing plan, but it must be done online, even if you do it on your phone while sitting in the showroom. You also can’t find a car you like on the lot and make it yours under the terms of the plan. Each Care by Volvo car is built only after it’s been ordered – which is in Europe if it’s a V60 wagon, or in Volvo’s new plant in South Carolina if it’s an S60 sedan – and you have to wait for it to be assembled and shipped.
“This plan is about convenience,” Carroll said. “If you want to get out of a car every year, if you don’t want to walk into a dealership, or make a down payment, or negotiate on price or choose packages, this is a new way of getting into a vehicle. If you need assistance, need to schedule maintenance, or even a question on how to use something, you can call the concierge. The subscription isn’t for everyone, and you can buy or lease otherwise, but this is an alternative.”
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