Buying a car becoming just like buying a new phone handset?
Discussion
https://www.engadget.com/2018/02/21/volvo-adds-the...
Volvo USA have a scheme called 'Care by Volvo' and looks like its coming to the UK soon.
Its a bit like leasing, only that you don't pay a deposit, you just pay a monthly costs and everything (tyres, servicing, insurance, tax etc) is all inclusive, you just add fuel.
From what I understand, you can also swap to a different car with greater ease (ie, before your 24/36 months are up like a traditional lease) and you can also request a different car for a short time. Eg, swap your XC60 for an XC90 for a holiday trip and then take you XC60 back when you come back from holiday.
Is this how 'most' will get their new cars in coming years, or is this just a niche product?
Volvo USA have a scheme called 'Care by Volvo' and looks like its coming to the UK soon.
Its a bit like leasing, only that you don't pay a deposit, you just pay a monthly costs and everything (tyres, servicing, insurance, tax etc) is all inclusive, you just add fuel.
From what I understand, you can also swap to a different car with greater ease (ie, before your 24/36 months are up like a traditional lease) and you can also request a different car for a short time. Eg, swap your XC60 for an XC90 for a holiday trip and then take you XC60 back when you come back from holiday.
Is this how 'most' will get their new cars in coming years, or is this just a niche product?
It is certainly an option, but pretty pricey so only really for higher disposable income customers who value the convenience of the service enough to pay the premium. Ultimately it is just another way for the car manufacturers to keep producing the volume of product it wants to. They are probably all hoping that EV and self driving will continue to add features that make a new car worth buying/renting to its customers because in reality there is little that a new model car offers that a fifteen year old one does not other than gadgetry.
It may depend who is making the money, with leases the car is sold to the lease company so the manufacturer has nothing else to gain other than service/repair parts, with this scheme if the manufacturer is getting the income stream over time then it may be the start of a service income stream model for the industry.
It may depend who is making the money, with leases the car is sold to the lease company so the manufacturer has nothing else to gain other than service/repair parts, with this scheme if the manufacturer is getting the income stream over time then it may be the start of a service income stream model for the industry.
Edited by Toltec on Wednesday 28th February 12:10
Toltec said:
It is certainly an option, but pretty pricey so only really for higher disposable income customers who value the convenience of the service enough to pay the premium...
I know a girl who leased a Fiesta, She just wanted something that looked ok, and was new and wouldn't break down. Not on higher disposable income.A lot of people will look at an all inclusive price and think of the time saved chasing insurance quotes and so on, with people paying £50 a month on iPhones, and £50 a month to Sky/Virgin, this will just be another re-occuring line on the monthly bank statement.
Removing any upfront cost as OP said Volvo are doing will make it very attractive to many.
Integroo said:
Will the problem not be if we move to it en masse then residual values will nosedives and monthlies will increase considerably, making it unaffordable to most (unless the cost of cars drop).
Very possible that the costs would drop if cars were only built to last the 3 years that the contract ran.Would be very like a smartphone, which becomes basically useless after 3 years.
The trend has been around for at least 20 years and is gathering pace.
The sellers (Volvo) want a recurring monthly revenue stream for a customer's whole lifetime. Much more predictable (and loyal) business model than selling a one-off car.
The buyers are from Generation Share and want everything on lease, rent and debt. Most people prefer £300 a month rather than having to part with £30,000 upfront on day 1.
The sellers (Volvo) want a recurring monthly revenue stream for a customer's whole lifetime. Much more predictable (and loyal) business model than selling a one-off car.
The buyers are from Generation Share and want everything on lease, rent and debt. Most people prefer £300 a month rather than having to part with £30,000 upfront on day 1.
Yipper said:
The buyers are from Generation Share and want everything on lease, rent and debt. Most people prefer £300 a month rather than having to part with £30,000 upfront on day 1.
Particularly if the £30k in question erodes by more than £300 a month and attracts a £50/month opp cost even vs a 2% mortgage. No idea what generation share is though.hyphen said:
I think the move to fully electric is in mind.
Maintenance and servicing costs you would guess are going to be significantly lower to manufacturers with less cost, time and risk of failure than with a combustion engine, so easier to offer a fixed monthly ongoing all inclusive price.
You might be onto something there. Volvo have also just announced that they will no longer be developing combustion engines. Ie, this current new generation of 4 pot diesel and petrol engines will be their last - with all engine development 100% electric from now on.Maintenance and servicing costs you would guess are going to be significantly lower to manufacturers with less cost, time and risk of failure than with a combustion engine, so easier to offer a fixed monthly ongoing all inclusive price.
Yipper said:
The trend has been around for at least 20 years and is gathering pace.
The sellers (Volvo) want a recurring monthly revenue stream for a customer's whole lifetime. Much more predictable (and loyal) business model than selling a one-off car.
The buyers are from Generation Share and want everything on lease, rent and debt. Most people prefer £300 a month rather than having to part with £30,000 upfront on day 1.
The trend has been around since the 1950s, when most (all?) TVs were rented.The sellers (Volvo) want a recurring monthly revenue stream for a customer's whole lifetime. Much more predictable (and loyal) business model than selling a one-off car.
The buyers are from Generation Share and want everything on lease, rent and debt. Most people prefer £300 a month rather than having to part with £30,000 upfront on day 1.
hyphen said:
Toltec said:
It is certainly an option, but pretty pricey so only really for higher disposable income customers who value the convenience of the service enough to pay the premium...
I know a girl who leased a Fiesta, She just wanted something that looked ok, and was new and wouldn't break down. Not on higher disposable income.A lot of people will look at an all inclusive price and think of the time saved chasing insurance quotes and so on, with people paying £50 a month on iPhones, and £50 a month to Sky/Virgin, this will just be another re-occuring line on the monthly bank statement.
Removing any upfront cost as OP said Volvo are doing will make it very attractive to many.
https://www.telegraph.co.uk/cars/volvo/volvo-xc40-...
How much is this Fiesta per month, around a third of that I'd guess?
soupdragon1 said:
https://www.engadget.com/2018/02/21/volvo-adds-the...
Volvo USA have a scheme called 'Care by Volvo' and looks like its coming to the UK soon.
It's already here, I think - seen some comments that the cost is eye-watering.Volvo USA have a scheme called 'Care by Volvo' and looks like its coming to the UK soon.
https://www.volvocars.com/uk/buy/shop/care-by-volv...
Saw this on their website and an XC40 was offered at £750pm or something like that. Quite pricey but it was a near £40k car with no deposit as such and you only have to give them limited time to cancel the contract (can't remember if it's 1 month or 3 months) but it includes absolutely everything bar fuel.
See this as just an extension of what we do now regarding finance. A lot of people who buy new simply view their car as a monthly payment and have full intentions to renew at contact end. This is the next stage on form traditional finance.
See this as just an extension of what we do now regarding finance. A lot of people who buy new simply view their car as a monthly payment and have full intentions to renew at contact end. This is the next stage on form traditional finance.
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