During 2005, all models registered by fleets with a registered fleet operator number from Volvo will automatically be given free servicing for three years and 60,000 miles.
Volvo is working closely with leasing companies to ensure they change their leasing rates to reflect the fact that servicing has been removed.
The saving, worth up to £1,600 depending on the model, should slash leasing rates by about £30 a month.
Volvo believes the free servicing package is the best way of ensuring it remains competitive in a demanding fleet market without resorting to wider use of price discounts that might affect residual values.
Furthermore, the package is fully transferable and could lead to stronger residual values when customers in the used car market realise they might get their first service free, depending on the car’s mileage.
The package will also be offered in addition to any current special terms, such as discounts, Volvo has agreed with fleet customers.
John Wallace, Volvo Car UK’s leasing and rental manager, said: ‘We didn’t want to simply offer cash incentives to the end-user, as many of our rivals have done, because that can undermine residual values.’
The package covers all parts and labour and fleets are automatically registered. There will also be a retail package offered, covering vehicles for three years/36,000 miles, available for a £100 fee.
The fleet deal runs from January 1 to December 31 with an option to extend the offer if it proves a hit with the fleet industry. Daily rental and direct supply special vehicles are not included in the offer.
The announcement came as Volvo sales for 2004 broke through the 40,000 barrier, with plans for 43,000 units to be sold to customers during 2005.