Care by Volvo - $600/mo XC40 15k/24m

Just to share some intel, I was with a dealer today and asked about the Care program. He claimed they had already done a few subscriptions and the price did not vary based on insurance. His guess was Volvo will test the waters on it and adjust if they are taking a bath. He assumed people with wildly high insurance due to accidents/issues would likely just get denied in the first place.

OK - so I did some research on the price difference of leasing vs. subscribing. The data below compares the cost of a 24 month lease with Volvo subscription for a similarly priced vehicle.

  1. Reverse engineer a quote on Volvo.com for an XC40:
    (These are all before tax numbers.)

MSRP: $41,270
Destination: $995
Net price: $42,265
Acquisition fee: $695
Cap cost: $42,960
Residual value: $28,317 (67%)
Money Factor: 0.00015 (Texas)
Term: 24 months
Monthly finance charge $11
Monthly depreciation charge $610
Monthly Payment $621 per month
does not include insurance and certain maintenance, wear and tear plans
No early upgrades (except pull ahead, if available)
Only includes 10K miles per year

  1. Compare to subscription model:
    (These are all before tax numbers.)

MSRP: $41,445
Monthly charge for 24-month subscription: $609 per month (includes metallic paint charge of $9).
includes insurance and certain maintenance, wear and tear packages.
option to upgrade after 12 months.
Includes 15k miles per year

So based on the numbers alone, without a discount on the MSRP of the car, the subscription (at least for the T5 momentum trim) is cheaper than a lease.

Who buys/leases cars at MSRP, especially Volvo?

4 Likes

Not really the point Iā€™m making bro. No true Leasehackr is going to lease in either scenario. Rather, Iā€™m just comparing and contrasting the two options people have to get a feel for the break even point between the two scenarios. Also, thereā€™s an embedded discount on the money factor of .00015 (0.36%) and residual of 67% compared to say BMW for example that has money factors of .00156 (3.74%) this month. Not to mention that a comparably built x1 or x2 is likely to have a much higher sticker to begin with. But alas, itā€™s really just an illustration of numbers - thereā€™s no need to be a troll about it bro.

2 Likes

You are not making any point since there is no point comparing subscription with lease. One is set and the other one changes monthly with everything else equal for leasehackr or not.
But good breakdown, nevertheless.

I take your pointā€¦ but like ALL valuationsā€¦ this is a point-in-time analysis.

Yes, but even now you can get XC40 for close to or at invoice, I think. You can also choose your mileage - not everyone needs 15K and RV increases by 4 points on 7.5K. There will be more discounts and incentives in a few months, also.

Assuming a 6% discount (approximately reflecting invoice pricing), the monthly payment on a 24 month lease (before fees and taxes) is $513.21. The subscription is still $609.00 (before fees and taxes). If your insurance costs more than $85.79 per month then youā€™re still better off with the subscription.

Also take your point on mileage - we could tweak those RVs some but ultimately I think this is a good ballpark to illustrate the relative value of both models.

Insurance is a major factor here. Someone under 25 years old, someone in NJ vs. 35 years old, VA resident. Not sure if subscription adjusts for it or just uses average for age/location.

25 or 35 years old insurance policy do not apply to you. Check for the senior discount when comparing.

XC40 doesnā€™t apply to me either (but applies to you). So - whatā€™s your point, Vanessa?

1 Like

I knew the truce wouldnā€™t last

Truce is boring. Its just a period of calm while both sides prepare for the inevitable.

Saw an XC40 on the road for the first time today.

The novelty made me do a double take but Iā€™m sure theyā€™ll be as ubiquitous as any Xover very soon.

Iā€™m not impressed by design. They shouldā€™ve made it mini-XC60. And these ugly wheelsā€¦

Hi, Iā€™m a 18 year old college student and insurance prices for any car i get are over the roof. I live in Los Angeles and for a crappy 2001 chevy i would be paying 240 dollars a month which is crazy and for a 2013 ford fusion up towards the 340 mark a month plus the monthly payments on the car which would add up to 560ish. I was thinking if i even do get approved for the care by Volvo program and i complete the two years, that i will just get join care by Volvo for 2 years and get that flat rate of 600 a month gain more driving experience and leave the program and get myself a car where insurance would be a lot cheaper. I was wondering if this was a good idea. What do you guy think? Just seeking some advice because i donā€™t know what to do.

Do you have points on your record? Having only one-way coverage shouldnā€™t be $240/month for an older car in LA.

Yes we were speculating that this might be a good deal for insurance challenged drivers IF Volvo makes almost anyone pay the same insurance rate. The only way to find out is for you to apply - and see what happens. Donā€™t forget to tell us how it goes :slight_smile:

Not a single point on my record I wasnā€™t even expecting such high rates. Iā€™ll keep you guys updated just need to apply and see what Volvo tells me.

1 Like