Volvo has paused its vehicle subscription service, Care by Volvo, across the United States and Europe “for the foreseeable future,” the company has confirmed.
The programme officially ended on 1 August, but existing subscribers will be allowed to complete their terms. Upon finishing, they will be eligible for either a $1,000 credit toward the purchase of a new Volvo or $500 towards a lease.
Go deeper with GlobalData
Russell Datz, a spokesperson for Volvo, explained the decision, stating that it would enable the company to focus more on its core customer offerings and the introduction of new products, while also improving operational efficiency. This move is largely seen as part of Volvo’s cost-cutting strategy.
Originally launched in 2017, Care by Volvo faced initial resistance from dealers. A six-month investigation by California’s Department of Motor Vehicles found that Volvo had not adequately informed dealers about changes to franchise agreements and had given preferential treatment to certain stores when allocating subscription vehicles. Following these findings, Volvo revamped the programme in 2019, and by 2020, it was reportedly profitable.
The subscription service was designed to offer greater flexibility than traditional leasing, with slightly lower monthly costs. After the most recent update to its terms, customers could select a vehicle from existing stock, swap it for a different model, or terminate their contract without penalty after five months.
The monthly fee included the vehicle, insurance, roadside assistance, and other benefits, aiming to provide a hassle-free ownership experience. Pricing began at approximately $600 for the combustion-engine Volvo XC40, with higher-end models priced accordingly.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataCare by Volvo proved successful in attracting new customers to the brand, with 80% of subscribers reportedly being first-time Volvo buyers. Dealers also benefited, receiving a share of the subscription revenue and later reselling the returned vehicles as low-mileage, high-margin certified models.
Volvo has not disclosed the total number of subscribers to the programme.
Why are we still talking about car subscription?
Volvo subscription service accounts for 15% of sales in first year
Will we see a Netflix-style subscription model in car financing?
