Good question. Manufacturers have been muttering in boardrooms about adopting a selling process similar to that of mobile phone companies for years now - as in set, clearly advertised monthly payments to cover all the costs involved in running the car - but it looks like Volvo will be one of the first to actually offer it.
The Swedish manufacturer has stated that it'll start by offering D4 or T5 Momentum models for £629 per month, which includes a new car every two years and doesn't require a deposit. To give that cost some context, a well-specced TD4 Range Rover Evoque will set you back £399 per month, but that's after a £10k deposit.
So the differences are already becoming clear, but it'll be a very different buying experience, too. If you buy a car using the everyday finance methods currently favoured by most buyers, picking the car you want is only the first step.
After the fun bit where you ooh and ahh over colour options, you have to sit down and discuss your deposit, your credit rating, your address, your age, how long you want the contract for, what mileage you’ll do, and your inside leg measurement.
Then the salesman – if you’re lucky – offers a contribution to the deposit, before he puts all of this into a mysterious system on his computer, which spits out a monthly cost. This monthly cost includes interest, but of course it doesn’t include insurance costs, new tyres and servicing (although most manufacturers do allow you to spread fixed price servicing costs into monthly payments). You have to budget for all of that separately.
Hopefully, the monthly cost comes back at roughly the amount you were hoping for, and then you can totally ignore the scary ‘final balloon payment’ that you have to pay if you want to buy the car outright (almost nobody does). You’ll almost certainly just come back and go through the whole process all over again when it’s time for a new car.
Care by Volvo is a bit different. The Swedish manufacturer is going to offer an online buying process where you simply select the car you want, have a look at the monthly costs involved – which are all the same for anybody in the country buying the same model – and go for it.
The lack of a deposit is hugely appealing, plus you get a new car every two years. The monthly payment includes all taxes and insurance, the ability to share your car with your family and friends by inputting their details into an App, and there's even a range of concierge services such as cleaning, which will be rolled out in time.
It is, literally, like buying a mobile phone from a website. Only the monthly payment is rather higher, and you get a car rather than a phone.
It’s worth pointing out that some brands already have finance deals not too far off the all-inclusive Care by Volvo service (initially only offered on the XC40). Notably, Peugeot’s Just Add Fuel finance is similar in that it includes all costs (apart from fuel, obviously), but it doesn’t offer the transparency that Volvo is going to offer. You still have to go to a dealer and haggle, rather than just looking at the fixed costs advertised on the site and selecting the package that suits you as with Care by Volvo.
Similarly, you’ve been able to lease a car with full maintenance package for many years – it’s a method of running a car that plenty of companies favour for their fleets - but you still need a deposit and separate insurance, and you often have to deal with a third-party company rather than the manufacturer.
Ultimately, Care by Volvo promises to be a really convenient way of buying a car. It’s literally a click-and-go car for the Amazon Prime lifestyle, and convenience - plus a new car every couple of years and the fact that you don't need a deposit - is something that a lot of people will pay handsome monthly payments for. Even with that lofty monthly payment, given the benefits of the package, you can see why Volvo reckons it's going to be a hit.
We'd give it months before you start to see rival manufacturers offering similar all-inclusive monthly payment deals.