Subscriptions

CA Auto Dealers Want To Put Brakes On Volvo Subscriptions

Auto Dealers Seek to Halt Volvo Subscriptions

In an effort to halt Volvo from offering cars to consumers through subscriptions, the California New Car Dealers Association (CNCDA) filed a petition with the New Motor Vehicle Board in the state. The CNCDA represents over 1,000 franchised dealers of cars and trucks in California, The Verge reported.

The group describes the Care by Volvo offering as a “clever, but illegal, marketing ploy.” According to the group, it is essentially “an ‘all-inclusive’ two-year lease with a fixed, standardized, pre-determined monthly fee.” The group also notes that the program encompasses costs such as maintenance and insurance, among other expenses.

In addition, the group pointed out that Volvo utilized the term “lease” in documents internally regarding the program. And, as a result of providing the kinds of services that come with a lease, the group claims that Volvo “usurps the traditional sales role of Volvo dealer franchisees.” With the offering, however, drivers take delivery at a dealership, where their cars are also serviced. Drivers can also exchange a vehicle for a new model after one year, which The Verge equated to Apple’s upgrade program for iPhone devices.

Volvo is not the only company that offers a subscription for luxury cars. Audi, for instance, debutedpilot program last year called Audi Select that allows customers to borrow from a small selection of vehicles. In addition, Mercedes-Benz rolled out a pilot service dubbed the Mercedes-Benz Collection last summer. And, as it stands, the vast majority of Americans finance new car purchases.

Nearly half of all American adults have a car loan, and as of 2015, the average length of an American car loan was over six years. And, while the trend has been for longer ownership terms in general, the trend lines are going in the opposite direction for an emerging segment of the car buying population: The leasing volume has doubledawwwww over the last half of a decade, and luxury continues to be the largest segment of leased vehicles.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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