Car Subscriptions Are Now a Thing

For the last I don’t know how many years, if you wanted to buy a car, you basically had two options: you either bought it with cash or a loan, or you leased it.  Leasing has always been confusing to me, since you still have payments, you can’t drive the thing as much, and at the end of your lease, you have to give the car back.  But I’m apparently missing out on something, because Volvo recently announced a whole new way to drive their vehicles: subscriptions.  That’s right, how would you like to have a car payment every single month for the rest of your life but never actually own a car?!?  Well, now you can!  Essentially the same thing as leases, but with shorter terms, and higher payments, Volvo’s introducing Care by Volvo, a model of “ownership” for a car that to me sounds completely absurd.

Their CEO, Hakan Samuelsson, has apparently decided that cars are just like cell phones now, saying “You don’t necessarily have to buy it. You have it on a subscription, which is absolutely hassle-free and you know exactly what it costs, there is a flat rate per car, and after 24 months there is a new one, an updated new model.”  Ah, there’s that not-so-subtle reminder that we can’t be caught dead with anything older than two years!

Care by Volvo will reportedly cost between $600-700 every month, depending on what model you want, and the cost includes use of the car, insurance, and maintenance/roadside assistance.  They will also offer subscribers the option to upgrade their car, signing a new 24-month contract in the process, as early as 12 months into the deal.  They’re not very specific on what happens to the remaining time in your original contract if you do that, though.

Volvo isn’t alone in this admittedly honest new approach.  In January of this year, Book by Cadillac launched, giving subscribers of that service access to any vehicle in the Cadillac lineup whenever they want, all by using an app.  Need an SUV on the weekends?  No problem, a concierge will drive one to your house for you.  Want something sporty because it’s Tuesday?  Yep, that works.  And no base models here.  Subscribers get the Platinum trim on whatever they want to drive that day.  Oh yeah, it’ll only run you $1,500 every single month.  But hey, no mileage restrictions!

And Lincoln is getting ready to jump in, too.  They don’t have nearly as many details hammered out as the other guys, at least publicly, but Director of Marketing Robert Parker thinks that current lease deals just aren’t as profitable cutting-edge as consumers today are looking for.  He said “We want to reinvent leasing in the 21st century, and this is a step in that direction.” Lincoln is planning to launch their offering, a month-to-month service, in January 2018.

Lest you think all this craziness is aimed solely at the well-heeled, Ford started up (or rather, bought and jump-started) Canvas in May 2017.  Their pricing starts at $429/month, for insurance, maintenance, registration, and 500 whole miles of driving. Once you put the two-ish tanks of gas in you’d need to get that 500 miles, you’re looking at a little over a dollar per mile.  Oh, and this is all for a used car.

This is the part where I can’t even

So.  What’s the deal?  Where is this coming from?  Are these things happening in the same America where people are so concerned about the disappearing middle class?  If so, how is this becoming the new thing?  It’s because we as a group quit asking “how much,” and started asking “how much per month?”  Our collective attention span can’t focus on anything more than 30 days out from now, and businesses are starting to take advantage of that.  We buy $1,000 phones that we’ll use for two years because they’re $50/month.  We literally have arguments about refusing to pay off mortgages because the market everyone lost their houses to 9 years ago is doing so great now.  I saw an ad last week for a rent-to-own place offering an $800 TV for what would eventually equal almost $2,800, one $35 week at a time.

This is what’s ruining us: we have a literal death grip on these devices that allow us to live beyond our means.  If your reaction to a car lease or those subscription services is, “Hey, that allows me to drive a car I wouldn’t otherwise be able to afford,” that’s exactly what I mean.  As long as we keep playing around with these payments for this and payments for that, the middle class absolutely will disappear, but it won’t be because the evil 1% is stomping on our fingers at the top of the cliff.  It’ll be because we’re sacrificing our future to fund our present.

I’m all about fancy stuff.  I love handcrafted, luxury, top-of-the-line, leather and mahogany, designed-by-Jony-Ive, fancy stuff.  But I want to own it, rather than have it own me.  I want to be able to look at the car in my garage and see the work that I put in to earn it, instead of try to remember what month I have to turn it back in.  I want to spend my paycheck on things I want to spend it on, not bills that threaten legal action if they don’t get paid.

What do you think?  Are you as surprised by these new subscription models as I am?  Or am I way off base, and just need to get used to the new way things are done?

8 thoughts on “Car Subscriptions Are Now a Thing

  1. WOW! That’s all I can say. Thanks for the heads up on this development in the trend. And pointing out how ridiculous it is. When you’re paying twice the federal mileage rate to drive a car, you know something’s wrong.

    1. I’m just nervous to see how well it does in the marketplace… I have a feeling the rent-to-own industry effect is coming to vehicles very, very soon.

  2. Guess I’m out of the loop as I’d never heard of this. Crazy! Personally, I’ll pass on anything with a payment attached. Cash (and ownership) is the way to go.

    1. I hadn’t heard of it either, until my wife saw an ad on Instagram, of all places! I agree, though, owning something outright makes it a lot harder for someone else to take it away from you.

  3. The notion of layaway comes to mind. My union (!?&$%#$!) actually puts out a catalog each Christmas letting teachers know that we can buy presents $5, $10, $27, etc., a month and it will come directly out of our paychecks. Of course, the Fitbit that you could buy at Target for $100 is now $188 or something silly like that…and it puts a pretty penny in my union’s pockets. Though, at least you’d own the Fitbit eventually, unlike these cars.

    I guess the bottom line is that businesses are always going to look for ways to make money. The ways that make them the most money and are least noticeable or felt by consumers seems to be the way of the world. Frustrating for sure. Hopefully, we know better.

    1. Ugh, that’s ridiculous. Because teachers make so much money, of COURSE they should have to spend twice as much as everyone else to buy stuff, and especially at Christmastime! The psychological warfare here and really everywhere money is involved is pretty shocking when you dig into it. I don’t know how you can look at setups like that and call it anything other than “predatory.”

  4. The absurd thing is, I think I know people who would do this, to just “not have to worry about repairs.” If you think about it, if your financial house is not in order, the maintenance/repairs as an unexpected expense feel like a wollop.

    I’m trying to think of a target population besides the uber-rich this would be useful to, but I can’t.

    1. Oh, absolutely. Marketers are not unintelligent people, and the appeal towards our “sensible” side is one of the oldest tricks in the book. If having a new car every year is something you have to have, then yes, this is a good deal. It’s just that having a new car every year is a goal that costs so much more than the sticker price for most people. If you don’t have a car payment, saving $600/month can do wonders for your maintenance fund. It can also fund your kid’s college, beef up your retirement, help care for your parents in their old age, and on and on. But the advertising machines don’t want us to think about that. They want us to focus on what we don’t have, what we “deserve,” and how they can help us get it.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.