The reveal of Care by Volvo marked another step towards a ‘usership’ model from manufacturers. Jonathan Minter caught up with the team at Volvo to establish how the product works, and what separates it from a lease
What was the inspiration/thinking behind Care by Volvo?
Increasingly, more people are signing up to the fact they do not need to own things to be able to use them.
Smartphones, TV, internet access and gym memberships are all things we subscribe to for a monthly fee, so why should having access to a car with the flexibility of being able to change it be any different?
What were some of the challenges in developing this?
Clearly there are challenges in breaking new ground like this. Particularly in the UK – where the individual driver is insured – being able to offer inclusive 24-month insurance on a premium vehicle is changing the way the industry works.
How do you see this as differing from a traditional lease on a technical level?
Care by Volvo offers a convenient package of services allowing customers to enjoy their car while Volvo takes care of everything else.
The connected services, access to a different Volvo and inclusive insurance are exclusive to Care by Volvo customers.
Do you see it as an evolution of leasing, or as something different?
To begin with it will work in a similar way to a lease, but with a number of additional extras included – a big difference is the lack of an up-front payment.
Typically, the market sets initial rental amounts of three to six months. Additionally, if the customer wants to cancel after the initial 90-day period, there will be no settlement costs to pay – only any excess mileage covered over the contracted 15,000 miles per annum on a pro rata basis, or any excessive damage to the vehicle outside normal wear-and-tear conditions.
I was curious about the interaction with credit scoring. Will they have an effect on availability/prices?
Historically, Volvo customers have very good credit quality. This is something we expect to continue with Care by Volvo.
Where a customer’s circumstances are such that they are unsuccessful in their application for Care by Volvo, we hope to be able to offer them an alternative route to getting into a car, particularly the XC40.
The press release mentions ordering online. Is this done centrally, or through dealers? If centrally, will dealers play a role in this at all?
The initial subscription order process is online at www.volvocars.co.uk. To begin with, the Volvo Cars London dealer group will fulfil the application, ordering and delivery for customers.
The release also mentions allowing customers to switch cars depending on needs. How will this work?
Built into the monthly subscription is the ability to book a different Volvo for a weekend away, short holiday, or just when you need something bigger or smaller for a few days.
Care by Volvo customers can book a different car for up to 14 days per year for a minimum duration of two days at a time. Our London dealer partner will swap the car over at a pre-agreed time, and that is it. The customer does not have to pay anything more, and the inclusive insurance covers the customer and up to two nominated drivers.
Are the insurance, valet and other additional services provided by Volvo, or through third-party partners? If so, are you able to give a couple of examples?
Insurance is provided through our Volvo Car insurance partner and is underwritten by Allianz.
Our concierge service is provided by our assistance partner, AWP Assistance UK Ltd, which already operates our Volvo On Call and breakdown assistance service in the UK. Valet, fuelling and deliver-to-car services are not currently available in the UK.
Do you foresee a day where this is the main route to market for vehicles?
To begin with we expect this to make up a very small amount of our total sales; however, as we can see in many other sectors, consumers are moving increasingly to subscription services. Our view is: Why should this be any different for using a car?
What are your immediate and medium-terms hopes and plans for Care by Volvo?
This is a great opportunity for us to provide customers with more time. As we learn more from customers we will expand our geographic reach and build on the number of services available.
The aim is to let Care by Volvo customers have a hassle-free, premium and convenient subscription that makes everyday life easier and more enjoyable.
Considering Care by Volvo is launching in markets as varied as Germany, Spain and Poland, how did you establish a unified price in the eurozone that works for all markets?
The flat rate across the eurozone is an integral part of the progressive concept we call Care by Volvo, which is testing the boundaries of what is possible for the benefit of our consumers.