Rebate Plan for Car Buyers Not Driven to One Brand

CUC International is offering a car rebate program for cardholders who are not interested in the General Motors or Ford cards that give points toward auto purchases.

Through its Crozier, Va.-based subsidiary, National Card Control Inc., CUC is peddling Auto Points, a program that allows cardholders to accumulate points redeemable for a new or used car.

NCCI president Robert M. Dufor said Auto Points is not designed to compete for General Motors-Household or Ford-Citibank cardholders.

"Auto Points would have a tough time competing for people who are tied to buying a particular automobile brand or for people who want the 5% rebate," said Mr. Dufor. "We are offering the flexibility to buy any car."

The General Motors and Ford Motor cards' rebates are for 5% of credit card spending. The Auto Points rebate can be up to 5% of the price of the car purchased, depending on the number of points accumulated. Cardholders get one point for every dollar charged to the card.

For example, an Auto Points cardholder who accumulates 15,000 points can receive up to a $225 rebate. With that many points, the buyer of a $20,000 car would get the full rebate, or a little more than 1% of the purchase price. But on a $4,000 car, the same buyer would have his rebate capped at $200, or 5% of the price.

"We aren't a car manufacturer, so we can't afford to give such high rebates," said Mr. Dufor.

A promotional flier proclaims: "It's like cobranding with all of Detroit, Japan, Germany, Sweden ... "

Auto Points was inspired by CUC's popular Travel Point program, which gives people rebates to buy tickets on any airline.

Star Bank, Banc One Corp., and Chase Manhattan Bank are among the 30 credit card issuers offering Travel Points.

Such programs, said Frances M. Dale, president of Entandem Inc., are "cobrand look-alike" cards that let card issuers respond to cobranding without actually having a partner.

Auto Points is not now being marketed by any bank, but Mr. Dufor said several card issuers had signed contracts to offer it.

Since the Household and Citibank car rebate programs do not charge annual fees, Auto Points will likely be offered free as well, said Mr. Dufor.

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