Volvo withdraws from vehicle leasing contracts.

Volvo ended its “Care by Volvo” subscription program in August, Automotive News (subscription required) has learned.

The program was introduced in the U.S. in 2017 and covered vehicles as well as maintenance and insurance for a monthly fee.

Volvo now plans to return its focus to traditional sales and leasing models.

A spokesperson for the automaker told Automotive News that existing customers in the subscription program will be able to continue the program until the end of their contract period, after which they will receive a $1,000 credit toward the purchase of a new Volvo vehicle or $500 for leasing stated.

Volvo did not reveal the percentage of customers who opted into the subscription program, but a New Jersey dealer with two stores told Automotive News that about 10% of its customers took advantage of the program.

According to Volvo, the program was profitable in the U.S. by 2020 and also helped bring new customers to the brand, especially in the younger demographic.

However, the program was similar to leasing in many ways, and its boundaries with the Dealer Franchise Act were blurred. As a result, in 2019 Volvo made the program more flexible to differentiate it from leasing by allowing customers to exchange vehicles or terminate contracts without penalty after five months.

Several other automakers also offered subscription programs, albeit on a trial basis. Only Volvo made it permanently available.