Do the Math: Car Subscriptions as Lease Alternative Don't Add Up

When Volvo pitched a vehicle subscription as a way to get into its new XC40, the deal looked compelling: For $650 a month, you get the SUV for two years complete with insurance, maintenance, wear-and-tear coverage and 15,000 annual miles. That’s little more than the cost to lease an XC40 and pay extra for those items plus the thousands due at signing — and that’s for one with fewer options and just 10,000 allotted miles a year.

Consumers already subscribe to plenty of other things, from Wi-Fi to Hulu. Could a car subscription make financial sense, too?

Related: Which Brands Offer Car Subscription Services?

Not so fast. Volvo’s program, Care by Volvo, is an exception to the norm — both in how it works and what it costs.

Mo’ Money, Mo’ Perks

Subscription programs have proliferated in select markets as luxury brands, from Mercedes-Benz to Cadillac to Porsche, launch pilot programs in cities like Philadelphia and Los Angeles. Unlike its peers, Care by Volvo is rolling out nationwide, but you have to keep the same car for at least a year. That’s distinct from other programs, which allow more frequent swaps, in most cases as often as you’d like.

The perk of ordering a different car that shows up squeaky-clean to replace your current ride should appeal to brand enthusiasts, and one-size-fits-all insurance means you don’t have to shop around. What’s more, mileage allowances range from 2,000 miles a month to as many miles as your right foot can stand — universally friendlier than the limits on a typical lease.

The programs generally cover maintenance, wear-and-tear items and mechanical repairs, roadside assistance, and most include taxes and fees in the advertised price. New-car warranties and free-maintenance programs may knock out one or two of the costs on a lease, but manufacturers seldom absorb all four.

Sign up to subscribe, and all you have to do is pay for gas and let a concierge know when you want to swap into something else. Sounds great, right?

Just get ready to fork over a pile of cash.

Subscription Survey

Cars.com priced 10 car subscription plans from five programs — Access by BMW, Book by Cadillac, Care by Volvo, Mercedes-Benz Collection and Porsche Passport — against the cost to lease, insure, maintain and pay associated taxes and fees on typical cars in those respective plans.

We took advertised lease rates over the past month, estimated taxes and fees via Thomson Reuters’ average national tax rates, and took Insure.com’s average nationwide rates for the particular comparison models. Finally, we factored in AAA’s average repair and maintenance costs on all new vehicles, adjusted by the particulars of any free maintenance programs for the cars in question. (We did not factor in opportunity costs or fuel, as subscription and lease programs incorporate neither.)

What did we find? Outside Volvo, subscription programs run anywhere from 28 percent to 102 percent more per month than the equivalent cost to lease, insure and maintain a typical car therein — and that doesn’t even account for the onetime fees to join such subscriptions, which range from $495 to $575.

You read that right: The cost to swap between a sedan for the workweek, a convertible for the weekend and an SUV for the family vacation can run more than double the cost to own one of those cars through a traditional lease.

The Middle Ground

Volvo’s program is something of a middle ground. The pricing doesn’t wrap in taxes or regulatory fees, as many other programs do, and you can’t swap cars by the day or rack up miles willy-nilly. But you do get to swap cars a bit more often — and drive a bit farther — than on a typical lease, and the pricing covers insurance, maintenance, repairs and minor damage.

As subscriptions go, it’s the most cost-effective by far. Available on the XC40 and redesigned S60, Care by Volvo starts at $650 a month for an XC40 Momentum, the base trim level, with a few options plus all-wheel drive and the SUV’s higher-powered T5 engine. Typical taxes and regulatory fees get you to $709 a month.

Compare that with Volvo’s advertised 36-month lease on an XC40 Momentum T5 AWD, which runs $375 a month as of this writing. Add in all the other associated costs from our earlier analysis, and that XC40 rings up to about $666 a month.

That’s a stone’s throw from Care by Volvo’s price, especially when you consider that the Care by Volvo XC40 comes preconfigured with a few more features than Volvo’s advertised lease example, with extras like a power passenger seat, bigger wheels and keyless access. Add atop that the extra miles allotted, the damage waiver and the ability to swap cars after a year, and Care by Volvo makes eminent sense as a lease alternative.

Subscribe to the Idea of Paying More?

From a financial standpoint, Volvo stands alone. From a pure dollars-and-cents standpoint, the others are hard to justify.

Porsche Passport starts at $2,000 per month for cars like the Boxster, Cayman and lower editions of the Macan and Cayenne SUVs. That’s some 80 percent more than our estimate of total monthly costs to lease a base Macan ($1,104). For $3,000 a month, Porsche Passport’s Accelerate plan adds the 911, Panamera and higher-echelon Macan and Cayenne SUVs to your fingertips — 64 percent more than our estimate of total monthly costs to lease a base 911 ($1,828).

The examples go on. Access by BMW runs $2,000 or $3,700 a month for two subscription tiers. We estimate representative cars in those tiers (an X5 xDrive35i in the base tier and an X5 M in the higher one) would cost $1,083 and $1,829 per month for total lease costs, respectively. Book by Cadillac runs $1,800 a month to drive a broad swath of the brand’s lineup. Compare that with the $1,336 per month we estimate to fully lease an AWD Escalade.

Cheapest of the Swap-a-Lot Programs

Granted, it’s one hell of a perk to choose from a buffet table of cars from your favorite brand, ditch the mileage shackles of a lease and get a freshly detailed car delivered whenever and wherever you want. But do any such programs come close to being cost-effective?

One does. It’s the Mercedes-Benz Collection, whose base tier — called Signature — gets you into a host of smaller Benzes: lower echelons of the GLC-Class SUV, SLC-Class roadster and various C-Class body styles, plus the AMG CLA45 performance sedan. At $1,095 per month, including taxes, MBC’s Signature tier is just 28 percent more than our estimate of all-in costs to lease an AWD GLC 300 ($854).

Of course, caveats exist. Mercedes says its subscription cars can be from any of the most recent three model years — Porsche Passport guarantees its cars are current-year only, by contrast — and the service runs only in the Nashville, Tenn., area. Mercedes-Benz Collection’s other market, Philadelphia, doesn’t have the base tier or include sales tax in its pricing.

Testing the Waters

The spread of such programs depends on acceptance in these initial cities. BMW told us its subscription service is a “very new trial,” and a Mercedes spokeswoman told us its goal “is to take what we learned in the pilot and then go to broader availability.” Besides Volvo, the five other programs we surveyed run in just six metropolitan areas: Atlanta, Dallas, Los Angeles, Nashville, New York and Philadelphia.

What happens next? Care by Volvo seems primed to raise acceptance of vehicle subscriptions, and others may follow its hybrid subscription-meets-lease solution. The others will depend on whether or not there are enough brand enthusiasts exist who value new driving experiences enough to fork over considerable money for the privilege. If they do, more consumers will have a chance to decide just how much they’ll pay to get that new-car smell on a weekly basis.

Cars.com’s Editorial department is your source for automotive news and reviews. In line with Cars.com’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of Cars.com’s advertising, sales and sponsored content departments.