Credit card will build up points towards purchase of new car: Vauxhall launches US-style scheme

VAUXHALL is launching its own credit card, which will build up discount points towards the purchase of a new car.

The Visa and MasterCard cards use the GM logo and work in a similar way to air miles schemes. Each time a purchase is made using the card 5 per cent of the total spent is credited to a separate account that can be used to obtain a discount on a new Vauxhall car.

Cardholders may accumulate up to pounds 500 a year or pounds 2,500 over five years in a rebate account. This would require spending pounds 10,000 a year on the card.

This rebate will be on top of any promotions or incentives offered by dealers on cars, off-road vehicles and vans and comes off the bottom line of the invoice after all negotiations have taken place.

Charlie Golden, chairman and managing director of Vauxhall Motors, said that when the time came to buy a new car people would not want to throw away the money.

The aim was not to get people to spend more or to get into debt - 'It's about spending smarter.'

The rebate account is transferable only between immediate family - sons, daughters and spouses.

If company car drivers do not want to buy a second car they can use their rebate points to buy vouchers to spend in shops, hotels and restaurants.

The scheme was launched in the US a year ago. The American GM card now has 9 million cardholders and points have been used to buy 70,000 GM cars and vans.

The US scheme also has associate companies, such as Mobil Oil and Marriott Hotels, which boost the points earned by an extra 5 per cent and allow cardholders to earn more than the normal maximum discount points. Discussions about possible partners in the UK are taking place.

The card will not be available until January but people can register to apply for one now by calling 0800 565554.

Cardholders will be able to transfer balances on existing cards to the GM card and this balance will count towards the discount. There is no annual fee and the interest rate is 19.9 per cent APR.

This compares with 14.6 per cent on the new Save & Prosper card, which has attracted nearly 20,000 customers since it was launched five weeks ago. But the GM card is cheaper than Barclaycard and the credit cards offered by National Westminster, TSB and Midland Bank.

Ford launched an affinity card scheme in the US with Citibank in February. A Ford spokesman in Britain said: 'There are no plans to follow the GM card at this point.'

Rover is also thought to be in discussions about a card launch.