Volvo Is Planning To Sell You Cars Like You Buy Phones

Good question. Manufacturers have been muttering in boardrooms about adopting a selling process similar to that of mobile phone companies for years now, but it looks like Volvo will be one of the first to actually offer it.

So, what’s the difference? Well, if you buy a car using the everyday finance methods currently favored by most buyers, picking the car you want is only the first step.

After the fun bit where you ooh and ahh over color options, you have to sit down and discuss your deposit, your credit rating, your address, your age, how long you want the contract for, what mileage you’ll do, and your inside leg measurement.

Then the salesman – if you’re lucky – offers a contribution to the deposit, before he puts all of this into a mysterious system on his computer, which spits out a monthly cost. This monthly cost includes interest etc, but of course it doesn’t include insurance costs, new tires, and servicing (although most manufacturers do allow you to spread fixed price servicing costs into monthly payments). You have to budget for all of that separately.

Hopefully, the monthly cost comes back at roughly the amount you were hoping for, and then you can totally ignore the scary "final balloon payment" that you have to pay if you want to buy the car outright (almost nobody does). You’ll almost certainly just come back and go through the whole process all over again when it’s time for a new car.

Care by Volvo is a bit different. The Swedish manufacturer is going to offer an online buying process where you simply select the car you want, have a look at the monthly costs involved – which are all the same for anybody in the country buying the same model – and go for it.

There is no deposit to pay, and you get a new car every two years. The monthly payment includes all taxes and insurance, the ability to share your car with your family and friends by inputting their details into an app, and there's even a range of concierge services such as cleaning, which will be rolled out in time.

It is, literally, like buying a mobile phone from a website. Only the monthly payment is rather higher, and you get a car rather than a phone.

It’s worth pointing out that some brands already have finance deals not too far off the complete, all-costs-included service that Volvo is offering (initially only on the XC40). Notably, Peugeot’s Just Add Fuel finance is similar in that it includes all costs (apart from fuel, obviously), but it doesn’t offer the transparency that Volvo is going to offer. You still have to go to a dealer and haggle with Peugeot, rather than just looking at the fixed costs advertised on the site and selecting the package that suits you as with Care by Volvo.

Similarly, you’ve been able to lease a car with full maintenance package for many years in some countries – it’s a method of running a car that plenty of companies favor for their fleets - but you still need a deposit and separate insurance, and you often have to deal with a third-party company rather than the manufacturer. 

Ultimately, Care by Volvo promises to be a really convenient way of buying a car. It’s literally a click-and-go car for the Amazon Prime lifestyle, and convenience is something that a lot of people will pay handsomely for.

Which is good, because while Volvo hasn’t confirmed any of its Care by Volvo price packages yet, it’s dubbed a premium service and you can bet your next phone upgrade that it’ll be expensive when it launches in the United States, Sweden, the United Kingdom, Germany, Spain, Italy, Norway, and Poland for the new XC40.

So expect the conventional financing methods to remain the more affordable way forward for a while yet – at the very least until other manufacturers start to join in the flat-rate, no-deposit, transparent pricing plan revolution. And they will. Trust us. 

Source: Volvo