Volvo has used this week’s LA Auto Show to take a bold step into the emerging car-as-service market with the launch of its new Care by Volvo monthly subscription service.
The Swedish automaker, which is owned by China’s Zhejiang Geely Holding Group, says it wants to make having a car as easy as having a cell phone. This means allowing customers to choose a car online and make one inclusive monthly payment that covers insurance, service, and maintenance. The subscriptions will last 24 months. During that time, customers will be given the chance to change cars and sign up for a new 24-month subscription as early as one year into the agreement.
Subscription customers will be covered under a premium personal insurance policy issued by Liberty Mutual Insurance offering $250,000 bodily injury protection per person and $500,000 bodily injury coverage per accident. A $500 deductible applies to both comprehensive and collision coverage. Care by Volvo will also feature 24/7 customer care and concierge services, including roadside assistance.
In launching its new service Volvo has joined a small but growing group of automakers developing subscription services that gives customers access to cars for a monthly fee. The big difference with Care by Volvo however is that at $600 per month for a new XC40 SUV, it’s nearly half the price of other services that have launched this year.
The new service is a logical precursor to Volvo’s expectation that it will be offering driverless vehicles to customers in the not too distant future. With their higher initial cost and complex maintainance and update requirements, driverless vehicles are more likely to be offered on a lease, rental or on-demand basis. Just last week Volvo announced a deal to supply ridesharing giant Uber with up to 24,000 of its flagship XC90 SUVs over the coming three years.
Volvo’s Anders Eugensson will be speaking at next February’s Insuring Autonomous Vehicles conference in London, providing an update on the company’s ambitious DriveMe test programme and its ambitions to provide a range of premium autonomous vehicles and mobility services to consumers throughout the world.
