Dealers are luring new customers with the chance to earn frequent-flier miles.
The year-old program, which is the first of its kind, is offered to American Airlines AAdvantage Club members through Member Services Inc. of Bentonville, Ark., an affinity marketing company that also handles the car-buying service for Wal-Mart Stores Inc.
Frequent-flier club members earn one mileage credit for every $4 spent when they buy or lease a new or used vehicle from dealers participating in the AAdvantage Auto & Recreational Program.
'These are sales we would not otherwise have. We've had people call from other parts of Texas - Austin or Tyler - when other Cadillac dealers were more convenient to them,' says Lee Wagner, a sales representative for Rodger Meier Cadillac in Dallas.
His dealership, which sells 80 new vehicles per month, received 200 inquiries about the program last year that resulted in the sale or lease of 20 new Cadillacs. Volume would go up if the offer were promoted more, he believes.
About 450 dealers in 56 cities are involved in the AAdvantage program. Participants agree to offer club members a competitive, no-haggle price.
The dealer cost is 4 cents for each mileage credit awarded, a price some dealers feel is too high. Dealers also pay a $995 annual fee and a $1,000 deposit for miles.
'If we sell a $50,000 car, we pay $500 for the miles. We take that out of our gross. The return (on the program) has been an issue, but the program has generated some interest,' says Mike Sullivan, marketing manager for Prestige Motors in Paramus, N.J.