Guaranteed Future Value: Securing what your EV will be worth in four years
Depreciation is usually the largest cost of owning a car, and the only one that cannot be checked in advance.
Fuel, insurance and servicing can all be estimated before anything is signed. What the car will be worth at the end is settled only on the day it is sold.
For electric vehicles that uncertainty is even sharper.
The technology is newer to the South African market than it is to Europe and the local used market is still forming.
Buyers want to know how a four-year-old EV will trade before committing to a new one. Guaranteed Future Value, now offered across Volvo Car South Africa’s electric range, is a response to that question.
How it works:
At the point of purchase, the customer and the dealer agree two things: a contract term and an annual mileage limit.
Those two inputs determine a guaranteed value for the car at the end of the term, which Volvo commits to in writing.
The customer then finances the difference between the purchase price and that guaranteed figure, rather than the full price of the vehicle.
The guaranteed portion is settled at the end, or not at all, depending on which route the customer takes.
At the end of the term three routes are available.
The car can be traded in, with the guaranteed value applied to a new Volvo.
It can be kept, by settling the outstanding amount. Or it can be returned, with nothing further owed.
The guarantee holds provided the agreed mileage is not exceeded and the car comes back in fair condition.
Exceed either and the figure is adjusted. That is the basis on which a value four years out can be calculated at all, and it is worth understanding before signing rather than afterwards.
“Customers are entitled to know what they are committing to at both ends of the agreement, not just the first month. Through Guaranteed Future Value we’re looking to give people more peace of mind for a future that can often be anxiety inducing,” says Grant Locke, Managing Director of Volvo Car South Africa, who previously led financial services for Volvo Cars globally
What separates this from a conventional agreement is the exposure.
Under standard finance, the owner absorbs whatever the market decides the car is worth in four years.
Under Guaranteed Future Value, that sits with the manufacturer, a position Volvo is willing to take on the long-term value of its electric range.
What a car will be worth in four years has long been the one figure nobody would commit to.
It can now be written into the agreement before the first payment is made.
As the South African NEV market continues to grow, Guaranteed Future Value offers customers greater confidence to embrace electric mobility, knowing that one of the biggest unknowns in vehicle ownership has already been addressed.
Discover Volvo’s Guaranteed Future Value.
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