Volvo has just upped the ante in the war of automotive warranties. It adds value for sure, but will it help you?
Premium automakers offer premium warranties. Many companies like BMW offer four years of bumper to bumper warranty with included maintenance. This works perfectly for those that lease for 39 months, and is also great for the buyers who buy pre-owned. The first driver has a single fixed cost, and the second owner and BMW both are happy because the off-lease car now still has nine months where there is no bickering about who pays for what. Volvo’s new car warranty is also four years long but only comes with three-years of included maintenance. To entice shoppers, Volvo has a new part to its warranty.
It’s called “Pay Once and Never Pay Again”, and the idea is that after the warranty period, if the owner pays for a repair at a Volvo dealer, she’ll never have to pay for that specific repair ever again. For example, let’s say the alternator goes. The Volvo owner will pay for the dealership’s service area to replace it. If the alternator ever goes again, Volvo will replace it at no cost. Volvo excludes all wear items like brakes, tires, windshield wipers, and belts.
Do modern cars have multiple failures of the same part? Maybe, but it seems doubtful. If the part is in any way safety related, it will be covered under a NHTSA recall and won’t cost the owner any money anyway.
One fun scenario we can envision is a Volvo owner buying a car and then deciding to keep it forever. Once she has replaced all the parts that can break, she will only have maintenance to pay for.
In reality though, cars wear out, and interiors and exteriors are not cost effective to replace. Another consideration is that every manufacturer worth their salt guarantees parts and labor for a year. Many premium brands would go further if the part they had replaced fails shortly after the year is up.
Volvo’s Pay Once and Never Pay Again plan is certainly a great idea, but in practice it is hard to see how it would benefit most owners.