Car subscriptions stalled because the provider carries the costs inside the bundle: depreciation, insurance, repairs and the risk of the car coming back early. Volvo suspended Care by Volvo in the US on 1 August 2024 and halted it in Europe too. Bundled subscriptions only work when you control those costs, use minimum terms, and keep utilization high.
Key takeaways
- Volvo suspended Care by Volvo in the US on 1 August 2024 'for the foreseeable future' and halted it in Europe, a year after relaunching it at about €699 a month.
- Dealers reported a subscription was as much work as a normal sale. Kelley Blue Book called Porsche Drive a lone survivor among manufacturer programs.
- Jaguar stopped selling most new cars during its all-electric reinvention; it recorded just 49 European registrations in April 2025, down 97.5%.
- In a car subscription, the provider owns the depreciation, insurance, repair and early-return risk. That's where the margin disappears.
- Subscriptions for the service around an asset (washing, servicing, maintenance) are usually better business than subscriptions for the asset itself.
Picture the pitch meeting at a carmaker around 2020.
"Customers don't want to own cars anymore. They want access. One monthly fee: the car, the insurance, the registration, the servicing. Swap it whenever you like. Cancel whenever you like."
Everyone nods. Recurring revenue! Just like Netflix!
There was only one problem. Netflix doesn't lose a few thousand dollars of value every time a subscriber streams a movie. A car does, every month it sits in someone's driveway.
What did the book say about car subscriptions in 2022?
In Chapter Three of The Subscription Playbook, when I explained the regular fixed fee subscription, I used cars as proof that even the most traditional product could go recurring. I wrote:
"Jaguar offers their cars on subscription starting at around $1,000 per month—including registration, insurance, and maintenance. You can start, stop, or pause any time and get a fresh car every few months if you'd like. Car manufacturers see subscriptions as a way to drive additional revenue into their businesses."
I also mentioned Zipcar's low monthly fee plus hourly rate. The message was that subscriptions could work for nearly anything.
They can. But not always profitably.
What's happened since?
The car-subscription wave largely retreated.
Volvo, the poster child, quits
Care by Volvo was the program everyone pointed to. Volvo had relaunched it as recently as 2023, at about €699 a month in Europe. Earlier US pricing was around $650 a month.
Then, on 1 August 2024, Volvo suspended Care by Volvo in the US "for the foreseeable future," and halted it in Europe too, to focus on its core business.
Industry coverage reported that dealers found a subscription was as much work as a normal sale. Kelley Blue Book noted that Volvo's exit left Porsche Drive as a lone survivor among manufacturer programs.
Jaguar hits pause on almost everything
Jaguar's story is different, and stranger. I couldn't find a current public update on the specific subscription offer I described in 2022. What is clear is that Jaguar stopped selling most new cars while it reinvents itself as an all-electric luxury brand.
Its "Copy Nothing" rebrand in November 2024, and the Type 00 concept car that followed, drew a public backlash. Industry data reported by CBT News showed just 49 Jaguar registrations in Europe in April 2025, down 97.5% from 1,961 a year earlier, as the old range ran out before the new one arrived.
It's hard to sell a car subscription when there are hardly any new cars to put in it.
Why did car subscriptions fail?
The short answer: the provider owns every cost inside the bundle.
In Chapter Two I called this the Bundled Services model. You package several things the customer would otherwise buy separately, for one monthly fee. It's a powerful model when the costs inside the bundle are yours to control, like your own labor and expertise.
A car bundle is the opposite. Look at what the provider is carrying:
| Cost inside the bundle | Who controls it? | Why it hurts |
|---|---|---|
| Depreciation | The market | Steepest in the early months, exactly when short-term subscribers use the car |
| Insurance | The insurer | Rises with claims, and the provider pays it whether or not the car is earning |
| Repairs and servicing | Partly the provider | Every swap means a reconditioning job |
| Early return | The customer | A car back after three months must be placed again, at a lower value |
| Handover labor | The dealer | Every swap is "as much work as a normal sale" |
Illustrative only: why short terms kill the margin
Say a provider buys a car and expects it to lose value fastest in its first year. If a subscriber keeps it for three months at $1,000 a month, the provider collects $3,000. Out of that come the insurance, the registration, a share of the servicing, the cost of the handover, the reconditioning when it comes back, and the slice of first-year depreciation that happened while the car was out. Then the car has to find a new subscriber, now as a used car. Unless the monthly fee is very high, or terms are long, or every car is almost always on the road, there's nothing left. These numbers are made up to show the shape of the problem, not any carmaker's actual costs.
A "flexible" subscription for a high-ticket, depreciating asset often turns into an expensive short-term lease. With a lease, at least the customer is locked in long enough to cover the depreciation.
This is also a gross margin story. In the book's moat framework, high gross margin and high marginal profitability are two of the eleven moat factors. Car subscriptions had neither.
Will your bundle make money?
Work out a profitable monthly price after your real costs, GST and fees with the free Subscription Price Calculator.
What the book got right, and what I'd add
The book's core idea still holds. Even a carmaker can add recurring revenue.
What I'd add in 2026 is a warning I should have written more clearly: before you bundle a big physical asset into a subscription, model the costs you don't control. The minimum commitment model exists for exactly this reason. A 6- or 12-month minimum, with a clear early-exit fee, is what turns a risky flexible rental into a sustainable subscription.
And notice where the healthy car subscriptions are. Not in the car. Around it.
Washing, detailing, servicing and maintenance plans are thriving, because the business controls its own labor and the asset belongs to the customer. Mister Car Wash makes most of its sales from a monthly club, as you'll see in how Mister Car Wash built its Unlimited Club. The car wash and mechanic guides show how to do the same locally.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
What you can steal
- List every cost inside your bundle. Then mark which ones you control. If the biggest ones are controlled by someone else (an insurer, the used-car market, a supplier), price for the worst case or don't bundle them.
- Model the early-exit customer. The subscriber who cancels at the first chance and returns the item in poor condition is your real test. If that customer still breaks even, you're safe.
- Use a minimum term for asset-heavy offers. Match the term to the depreciation curve, and make the exit fee clear at sign-up (regulators in Australia and elsewhere expect that).
- Subscribe the service, not the asset. A maintenance plan for a client's own equipment is usually better business than renting them the equipment. If you make hardware, read the manufacturers guide for "hardware as a service" models that keep the risk manageable.
- Check the numbers before you launch. Use the subscription vs one-off profit calculator to see whether recurring revenue really beats selling outright.
The lesson
Bundled-service subscriptions work when you control the costs inside the bundle.
Car subscriptions didn't fail because customers hated the idea. Lots of people liked it. They failed because the provider was carrying risks it couldn't price.
So here's my question: what's inside your bundle that you don't control? Answer that honestly, and you'll know whether your subscription is a business or a very expensive hobby.
For more on designing bundles that make money, see my guide to the bundled services model.
Frequently asked questions
Are any car subscriptions still running?
Some are. When Volvo pulled out in 2024, Kelley Blue Book described Porsche Drive as a lone survivor among manufacturer-run programs in the US. Independent rental and leasing firms also offer flexible monthly plans. But the wave of carmaker programs that looked like the future around 2020 has largely retreated.
Is a car subscription the same as a lease?
Not quite. A lease usually locks you into a fixed term, often several years, and you arrange insurance and some maintenance yourself. A subscription bundles the car, insurance, registration and maintenance into one monthly fee with shorter terms and the option to swap or stop. That flexibility is exactly what makes it expensive for the provider to run.
Why did dealers dislike car subscriptions?
Industry coverage of Volvo's exit reported that dealers found a subscription was as much work as a normal sale, but without the same payoff. Every swap, return and handover takes staff time, and the car comes back to the lot to be reconditioned and placed again. Shorter terms mean doing that work more often.
Can a small business subscribe out equipment profitably?
It can, if the asset holds its value, the minimum term covers most of the depreciation, and you control servicing costs. Tools, coffee machines and IT hardware are common examples. Model the worst case first: the customer who cancels at the earliest possible date and returns the item in poor condition. If that case still breaks even, you have a business.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- Dealership Guy, Volvo pulls the plug on car subscription service (16 Sep 2024)
- Motor Finance Online, Volvo suspends vehicle subscription service across US and Europe (2024)
- Automotive News, Volvo quits the car subscription business (2024)
- Kelley Blue Book, Volvo Kills Its Car Subscription (2024)
- The Guardian, Jaguar rebrand and Type 00 concept (3 Dec 2024)
- CBT News, Jaguar's European sales crash amid controversial rebrand (2025, citing ACEA)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.