Volvo and other automakers are betting that consumers are ready for a new, more flexible way of owning a car. 

During the unveiling of its XC40 sport utility, the Swedish automaker released the initial details about a new ownership option called Care by Volvo. While the payment plan appears similar to a traditional car lease, it may have more in common with popular subscription-based media services and smartphone contracts.

“Our research has shown that many customers are looking for a hassle-free, fixed-rate experience that mirrors the many subscriptions they currently have, such as Netflix or Apple’s iPhone [upgrade] program,” Jim Nichols, product and technology communications manager at Volvo USA, told Consumer Reports.

Several automakers have jumped onto the subscription bandwagon (see below), but one of the early players in the subscription space, Book by Cadillac, has announced that it will shut down its service, at least for a while, starting Dec. 1, 2018.

A statement from Cadillac says that the program provided the automaker with "valuable insights" that the automaker hopes to use in revamping the program. It did not identify when the program might be relaunched. 

The Care by Volvo program allows one vehicle upgrade after the first 12 months: It starts at $650 a month for an XC40 small SUV, and that includes maintenance and insurance. Care by Volvo is currently the only nationally available program of its kind. Most other automaker subscription plans are pilot programs limited to a handful of cities, or fewer. Porsche Passport, for example, is available only in metro Atlanta, where Porsche Cars North America is headquartered.

“It is a short-term commitment, and you can upgrade the car as early as 12 months into the program,” Nichols said. “It covers everything but gas, covering things such as maintenance, insurance, and service.”

More on Car Buying & Leasing

The early upgrade option could appeal to consumers who want to keep up with the latest technology, says Jake Fisher, director of auto testing at Consumer Reports.

“It reflects the feverish pace of technological advancements we've seen lately in cars,” he explains. “It's a way for a car buyer to make sure they have all the latest safety and convenience features.”

The subscription model could also represent a shift in how automakers—and car buyers—view the ownership experience, according to Ed Kim, vice president of industry analysis at AutoPacific.

“The appeal of the Care by Volvo lease is its simplicity and transparency," he says. "It is all-inclusive and easy to understand.” 

Kim cautions, however, that savvy car buyers, particularly young adults on tighter budgets, will be quick to compare this program with more traditional (and potentially less expensive) purchase options.

“While young adults certainly like transparent and all-inclusive pricing plans, they are also price-sensitive by necessity," he says. "The success of Care by Volvo will depend on the overall deal.” 

“Simplicity can be wonderful," he added. "But many younger consumers will balk at the idea of paying more for simplicity and convenience—if only because by necessity they need to be careful how they spend their money.”

Still, Care by Volvo could signal a better alignment between car buying and the incoming wave of self-drive technology, Kim says.

“When autonomous vehicles get here, we can expect that technology to dovetail neatly with the rise of ride-sharing services,” he points out. “Starting in urban centers and then spreading out, within a few decades, we are likely to see a significant decrease in personal vehicle purchases and leases as more and more people will be able to rely on autonomous ride-sharing services.”  

Volvo Care on a tablet

What Others Offer

Volvo isn’t the only automaker to develop alternatives to traditional purchase or lease options.

BMW: BMW’s Flexible Mobility Program offers owners of the i8 plug-in hybrid sports car or the i3 electric-powered hatchback 14 days of complimentary access to gas- or diesel-powered BMW vehicles per year. The idea is that those models will offer owners a longer range than their electrified cars might get. The program is free to any i3 or i8 owner.

Cadillac: Book by Cadillac is scheduled to shut down on Dec. 1, 2018. The program allowed participants to schedule time in the brand’s current vehicle lineup without any long-term commitment for a monthly fee of $1,500. The month-to-month program included concierge service and unlimited mileage. 

Porsche: In the Atlanta market only, people who join the Porsche Passport subscription program can get flexible access to a wide variety of Porsche cars and SUVs using a mobile app. It’s a pricey month-to-month program that offers the ability to change vehicles frequently, unrestricted mileage, and on-demand access for up to 22 different Porsche models, depending on the level shoppers choose.

There are two levels: Launch and Accelerate. Launch includes on-demand access to eight choices, including the 718 Boxster and Cayman S sports cars, and the Macan S and Cayenne SUVs, for a monthly fee of $2,000. Accelerate includes on-demand access to 22 choices including the 911 Carrera S, the Panamera 4S sports sedan, the Macan GTS and Cayenne S E-Hybrid SUVs, in addition to the Launch-level vehicles, for a $3,000 a month. In both plans, that monthly fee includes taxes and registration, insurance, and maintenance, as well as detailing. Shoppers in Atlanta who are interested can apply through the Porsche Passport app available on Apple and Android devices. Membership in either level requires an activation fee of $500, and approval is dependent on a background and credit check, Porsche says.