Ordered A 'Subscription' Car

[yakers]

$600 seems a lot for a Volvo. My 2018 BMW lease is only $431pm for 3 years. Insurance is $365 every 6 months.

My insurance would be at least $100 a month for this car where I live. Throw in ALL maintenance a, servicees and wear items and I think it gets close but still probably cheaper to buy or lease but then I have to manage the car owberhip thing. So its an experiment for me, very, massively different than my approach to cars in the past. I always drove my vehicles 10+ years and passed them on to family members.

 

[yakers]

Do these subscriptions have mileage limitations like a lease does? IOW, if I use it for 2 years and run up 60k or 100k miles do I owe more?

Yes, 15,00 miles a year are included. Charge for going over. Only went over 15,000 on any car I have owned once, when I retired and did the Alaska Hwy.

 

[Winemaker]

I purchased a 2004 Colorado with 40,000 miles in 2007 for $14,700. I have 220,000 miles on it now, and put just under $4,900 in repairs over the past 11 years. That is $1782/year, $148.48/month, 9.2 cents/mile. I can't see ever buying a subscription car, even after this one gives up the ghost. Since FIREd three years ago, I put less than 10,000 miles /year on it.

 

[samclem]

I purchased a 2004 Colorado with 40,000 miles in 2007 for $14,700. I have 220,000 miles on it now, and put just under $4,900 in repairs over the past 11 years. That is $1782/year, $148.48/month, 9.2 cents/mile. I can't see ever buying a subscription car, even after this one gives up the ghost. Since FIREd three years ago, I put less than 10,000 miles /year on it.

There's a lot of freedom in owning a vehicle like that. If somebody scratches it in a parking lot, or crumples a fender, you can decide whether to fix it or not. If you haul something that dings up the bed, it might not matter to you at all. That, to me, is a truly significant convenience, and one reason (aside from the cost) I wouldn't choose to lease or "subscribe".

The "use of any vehicle" that Jerry1 describes, however, could be pretty nice, especially for folks with just one car. A small "daily commuter," drop it off for a big car for the family road trip, etc. Maybe something like that could be set up with a local car rental company, they often have a wide selection of vehicle types.

 

[yakers]

With the subscription plan, do you have to pay sales tax?

I know with a lease you have to and in Texas that is especially bad since the state requires you pay the sales tax upfront on the FULL retail price of the car, not just the leased portion. That's why a lease car in Texas is not such a good idea.

There will be California state sales tax on the value of the two year subscription. Also would be true with lease or purchase values.

 

[yakers]

Coross Posted From HVAC Thread

from the HVAC thread:

You all are so inventive!!!

Here's what I would do.

1.) Look at my portfolio balance after NINE (9!) years of bull market.

2.) Call my HVAC guy, explain the problem, and listen to his suggested course of action.

3.) Tell him to go ahead and do it. Pay him what it costs after he is done.

That's it! "The W2R Solution" to this dilemma.

Now see, that is what is underlying my move to/experiment with a subscription car. I used to be a real 'car guy', now I just want a fun, workable solution and the portfolio looks like it will last longer than I will. I still want good value but the working & fun side of things is more important than the price issue. When I have a service guy at the house I no longer mind paying for it if I get good work. And on the car issue, if it works for me and is fun then I really don't care if it costs $50 a month more than doing it some other way.

 

[Winemaker]

There's a lot of freedom in owning a vehicle like that. If somebody scratches it in a parking lot, or crumples a fender, you can decide whether to fix it or not. If you haul something that dings up the bed, it might not matter to you at all. That, to me, is a truly significant convenience, and one reason (aside from the cost) I wouldn't choose to lease or "subscribe".

The "use of any vehicle" that Jerry1 describes, however, could be pretty nice, especially for folks with just one car. A small "daily commuter," drop it off for a big car for the family road trip, etc. Maybe something like that could be set up with a local car rental company, they often have a wide selection of vehicle types.

All my cars are like "that". Low mileage, used cars that are taken care of. I also have a 2006 Pontiac Torrent, $7000 in 2016, with 55,000 miles, and a 2007 Trailblazer, $17,000 with 60,000 miles. Only the truck has a dinged spot on the bed near the taillight, where I bumped into a pole hidden by snow.

The best time to buy a car is when you don't need one; then you don't pay an arm and a leg. There are many nice used cars out there.

 

[friar1610]

Sounds like a good opportunity to pick up a used XC40 in a couple of years at a reasonable price!

That's what I was thinking. I recently bought a used Volvo from a dealership. In the course of finding the "perfect" car I visited several dealerships and learned that an awful lot of the used cars Volvo sells are coming off leases, after 3 years for the most part. When one dealer pitched the subscription idea to me I knew it wasn't what I wanted to do but I thought maybe I'll be back in 2 years to see what you're selling them for used.

 

[CaliKid]

I saw an article the other day about a new BMW program they are test marketing in a few places (like Nashville I think) where you pay a set amount (different levels) and can keep trading to different cars in your level. So if you pay the most maybe the choice is an M4, an M5 or a 740 for example. Get tired of the M4 go pick up a 740. Basically an expensive lease. Cool concept for the person that likes to switch things up.

 

[marko]

There will be California state sales tax on the value of the two year subscription. Also would be true with lease or purchase values.

I just paid $1020 Mass excise tax on my lease car. If the car wasn't in my name, I wonder if the subscription folks would find a way to get it from me.

 

[ExFlyBoy5]

In regards to the insurance, I wonder how this might work with an umbrella policy? Most umbrella policies (mine does) requires you to max out the liability limits on your autos. Can you "set" the limits on these rental/lease/subscription cars?

 

[yakers]

In regards to the insurance, I wonder how this might work with an umbrella policy? Most umbrella policies (mine does) requires you to max out the liability limits on your autos. Can you "set" the limits on these rental/lease/subscription cars?

I don't have the details, all I know is Liberty Mutual provides coverage and there is a $500 deductible. No mention about coverage levels but I think that if they do not have a robust coverage level I would want an umbrella policy of my own, which I think is a good idea anyway.

 

[bloom2708]

If it was $300/month, I might never buy another car. $600/month is just out of reach/reasonableness for me.

Do you notice how things are just priced out of "reasonable" reach. If a new iPhone was $300 I would buy a new one every year. They are $899 or $999.

The subscription model does bring on some interesting future prospects.

 

[ExFlyBoy5]

If it was $300/month, I might never buy another car. $600/month is just out of reach/reasonableness for me.

Do you notice how things are just priced out of "reasonable" reach. If a new iPhone was $300 I would buy a new one every year. They are $899 or $999.

The subscription model does bring on some interesting future prospects.

I agree with the $300 benchmark. I have an '09 Infiniti with a little over 100K miles on the clock. The cost of ownership (since new) including EVERYTHING (except gas) is about $300 a month. So, if I could get into something new that is similar to my current ride, for 3 years, in perpetuity, for about $300 a month...I would be all over it. BUT...for $600 a month? Yeah, that ain't happening.

 

[flintnational]

I don't have the details, all I know is Liberty Mutual provides coverage and there is a $500 deductible. No mention about coverage levels but I think that if they do not have a robust coverage level I would want an umbrella policy of my own, which I think is a good idea anyway.

I was also interested to know how the insurance would work. It would be easy for Volvo or LM to provide the physical damage coverage for the vehicle. And, other than the deductible, you would not have any remaining exposure. However, on the liability coverage, you could be held liable for damages that may or may not be covered by the LM policy. Most umbrella policies require minimum underlying auto limits (300K/500K is common). As a precaution, it might be a good idea to have your insurance agent make sure the LM policy limit is adequate and matches well with any umbrella you might have. I am sure Volvo/LM has figured a way to handle this. I would just want to know the details.

Enjoy the new car.