Add a luxury Volvo to your list of monthly subscriptions

When Volvo introduced the smallest member of its SUV line, the XC40, it wasn't the car that got all the attention. It was how the Swedish automaker planned on leasing it. With Care by Volvo, would-be XC40 drivers wouldn't invest $35,200 to own the all-wheel-drive vehicle but rather pay a monthly subscription of $600 that includes insurance, routine maintenance, wear and tear, roadside assistance, and zero money down. So yeah, it's a bit like a lease. But better.

"Better" has changed markets. The iPhone was like a Palm Treo or Blackberry smartphone but better. Netflix rented DVDs like Blockbuster but better. Laptops are just better desktop computers. What Volvo is doing is a better lease -- and it has the potential to change how we look at car ownership.

Although we're inching closer to a future in which autonomous cars are commonplace, the way we actually own cars hasn't changed much. You either purchase a car or lease it. Care by Volvo adds a third option: a near frictionless subscription that includes pretty much everything but gas. When the $600-per-month payment is pitted against the cost of leasing other cars in the same price range, it actually makes financial sense for some.

Plus, it's a flat rate. You pay $600 per month for 24 months for the Momentum version of the XC40 or $700 for the R-Design version with better wheels, stiffer suspension, more color options, active-bending lights and a few other upgrades.

As always, though, there are caveats. To qualify for Care by Volvo, you have to fit within certain insurance and credit parameters, as determined by Liberty Mutual. So if you have good credit but you have a few points on your driving record that put you outside what an underwriter finds acceptable, you're out of luck. There's no $650-per-month option for a bit higher insurance or to cover your bad credit. It's all or nothing.

If you don't qualify for Care by Volvo, the all-wheel-drive (AWD) car starts at $35,200 and you can purchase it as you normally would.

I asked about families and couples and how that affects the insurance and price of the car. A Volvo spokesperson said that if the drivers listed on the policy are all within Liberty Mutual's acceptable range, the monthly cost of the car is the same as for a single driver.

If you are accepted, Volvo sweetens its subscription deal with the ability to upgrade (or downgrade) to another Volvo after 12 months. After 24 months with the same car, you can walk away at zero cost as long as you stay under 15,000 miles per year. After that, as with a regular lease, you'll accrue a per-mile surcharge.

The XC40 packs many of the features found in the outstanding XC90 and XC60, except it has a more compact design intended for younger drivers (millennials), first-time Volvo buyers and folks who simply realize they don't need all the space a larger SUV has to offer.

During a test drive in Austin, Texas, I found the XC40 to be a worthy addition to the XC line. Like the XC60 and XC90, its refined interior is one of the best in its class, with clean lines and controls placed exactly where you'd expect to find them. All told, it's one of the easiest cars to master: You immediately know exactly where everything is.

The Sensus Connect infotainment system continues to be a favorite of mine. A 12.3-inch touchscreen is available in both the Momentum and R-Design versions of the vehicle I drove. The vertical layout with additional tabs makes for quick navigation while the plethora of options available at the top level of the three main screens means less time delving into submenus that could distract drivers from, well, driving.

Both versions of the XC40 are all-wheel drive and have a T5 turbo-charged four-cylinder engine with 248 horsepower and 258 foot-pounds of torque. A T4 front-wheel-drive version with 187 horsepower and 221 pounds of torque is expected in the United States this summer. (This car will not be available through the Care by Volvo program.) The T5 engine doesn't get the pulse racing, but it does make dashing through the city and around corners at least somewhat entertaining. When the accelerator is floored, though, the engine makes a bit of a racket in the cabin.

The upcoming version of the XC40 with a smaller engine with front-wheel drive will be cheaper, starting at $33,200. Without driving it, I feel like saving $2,000 on the purchase price for a less capable vehicle seems like a mistake.

On the road, the XC40 suspension glides effortlessly on highway and city streets, showing off its luxury pedigree. Volvo also sent me down some rough back roads during my drive. The car performed admirably, mostly smoothing out ruts and potholes. Cornering is tight for a vehicle of its size with body roll kept to a minimum, making some of the more challenging corners during the drive a bit more spirited than expected.

While the XC40 is the smallest SUV in the Volvo lineup, it does offer some intriguing storage solutions. The center console is large enough for a small box of tissues with room to spare for a few phones. But just in front of it, the automaker has put a tiny trash bin with a self-closing lid. You know, for all those tissues. The driver's seat has a pull-out drawer with enough room for a small iPad. Meanwhile, the speakers have been relocated from the doors to open up even more space. The compartment is wide enough for a dictionary. I stuck my laptop in there, and there was enough space such that on sharp turns, it actually moved back and forth.

The trunk also gets an upgrade with the floor doubling as a fold-up barrier that keeps packages from sliding around the storage area. It's great for keeping your grocery bags from falling over and spilling their contents everywhere.

Combine these storage touches with a beautiful interior, striking design, a power train capable of making the commute at least somewhat exciting and suspension that reminds you that you're riding in a luxury vehicle and it would be a mistake for anyone looking for a high-end compact to dismiss the XC40. All of that also makes it the perfect car for Volvo to introduce its Car by Volvo subscription service.

The crossover/SUV category continues to grow, and if you're going to experiment with a new form of car ownership, this is the way to do it. The XC40 is at a price point that makes a subscription service financially viable for not only the automaker's loyal customers but also folks new to the brand and the luxury market in general. Plus, some of these potential customers are used to a subscription model for other kinds of goods and services.

Beyond cars, the idea of ownership has changed dramatically over the past few decades. We've gone from owning CDs and MP3s to paying for monthly access to music via Spotify and Apple Music. DVDs and Blu-rays have given way to streaming services. We barely own our phones, with many of us swapping them out as soon as something shinier lands on the market.

With the speed of car-tech iteration accelerating almost as fast as our phones', having a five-year-old vehicle will soon seem as ridiculous to some as having a five-year-old smartphone. The introduction of mass-produced, self-driving vehicles will only exacerbate the need for subscription-based vehicles. They'll be too expensive to own outright.

Right now Volvo is pushing for a future in which ownership is fluid, and it seems to be resonating with people. According to the automaker, it's already racked 20,000 global pre-sales for the XC40 through Care by Volvo. Ninety-one percent of those buyers are new to the Volvo brand. What's more, the company's upcoming V60 wagon will also be available via Car by Volvo, opening the door to bigger sales numbers.

Expect other automakers to keep an eye on Care by Volvo. Cadillac and Porsche already have subscriptions services for their top-of-the-line vehicles, but those start at $1,800 and don't exactly speak to the average car buyer. The smartphone generation wants something without hassle that can be swapped fairly quickly; Care by Volvo offers that.

Volvo might not have the same luxury cachet of BMW and Mercedes, but if Care by Volvo takes off, expect that to change as people decide that swapping a car as often as a smartphone sounds like a better idea than the usual lease.

Source: Volvo

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