Ordered A 'Subscription' Car

[CRLLS]

Never having had a lease or subscription, are all the lease numbers people are quoting based on no down payment? I usually see advertisements for a fairly significant "trade-in" which artificially lowers the monthly payment.

Also, would the subscription consumer be paying more than their "share" on the insurance if they are a very good driver. Alternatively, a poor driver would possibly be subsidized on the insurance portion of the subscription. Or do the subscription payments vary based on individual driver's records? How would teenage drivers be handled?

Just curious.

[yakers]

Quote:

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

Yes, this too. If I like it a lot I can buy one, AFAIK the reason the dealers are onboard is they get a small fee for the processing, all the services and it should fill their lots with one and two year old used cars which they make more on selling than new cars.

[yakers]

Quote:

Originally Posted by CRLLS Never having had a lease or subscription, are all the lease numbers people are quoting based on no down payment? I usually see advertisements for a fairly significant "trade-in" which artificially lowers the monthly payment. Also, would the subscription consumer be paying more than their "share" on the insurance if they are a very good driver. Alternatively, a poor driver would possibly be subsidized on the insurance portion of the subscription. Or do the subscription payments vary based on individual driver's records? How would teenage drivers be handled? Just curious.

Good questions, there is no down payment only the monthly cost. Insurance is a really dynamic element. I understand they will be screening to keep out the really uninsurable but the rate will be the same for good & OK drivers. It might cost less for an owner with a good record to pay for insurance than the pooled cost. I think of this more like a Hertz rental, pooled liability for the general renter.

[yakers]

Quote:

Originally Posted by braumeister I just bought a Volvo XC60 the old fashioned way (cash), but I was reading about their new subscription model for the XC40 and I really think they're on to something. It should be a popular option for some people. Good idea to try it out with the XC40 since DW really fell in love with that car when she saw it at the factory showroom. She's still at least a year away from a new car, so nothing happening now. I'll be interested in your impressions of the subscription plan as you go through it. Here's an overview of the idea: Care by Volvo

DW & I went looking at the XC60 to replace my recently totaled 2006 Jeep Liberty CRD (diesel) and fell for the XC40. We could pay cash for one but I am fascinated with the subscription idea and not sure I need to own another car. DW still has her car.

[yakers]

Quote:

Originally Posted by marko I saw this on TV but thought they were talking about leasing. Other than insurance being included how is this different from a lease?

Its more like a long term rental from Hertz. Car is not titled in my name.

https://www.digitaltrends.com/cars/c...ram-explained/

I know this is not the cheapest way to acquire a car but I have more money than time an just am not as interested in owning a car as I have been most of my life.

[yakers]

Quote:

Originally Posted by ShokWaveRider $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]

Quote:

Originally Posted by pb4uski 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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by aja8888 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]

from the HVAC thread:

Quote:

Originally Posted by W2R 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]

Quote:

Originally Posted by samclem 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]

Quote:

Originally Posted by Masquernom 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]

Quote:

Originally Posted by yakers 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]

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Originally Posted by 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?

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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by yakers 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.