Loyalty in the Fast Lane: How a New Credit Card Drives Dealer-Customer Relationships

Car manufacturers can boost customer loyalty by offering credit cards that motivate people to buy a specific make of vehicle. But a car dealership’s best interests may be in partnering with a credit card that rewards cardholders for their repeat business.

Fasten rolled out a new credit card this spring that puts cardholders in the driver’s seat when it comes to earning rewards on cars and auto-related purchases. The company’s approach to providing value to cardholders shows how car dealers can grow customer loyalty by partnering with a credit card that makes owning a car more affordable.

The new payment tool, known as the Fasten Rewards Visa Card, lets cardholders earn points every time they use the card to make a purchase. But it offers people bonus points when they use the card for spending on auto-related transactions, including auto loans, leases, and down payments, and for goods and services they buy from Fasten’s partners.

The company’s Founder and CEO, Jacob Zachs, launched the card after his experience shopping for a new vehicle for his family left him “shocked to find there was no way to get points on such a huge purchase.”

We caught up with Zachs just as he was preparing to take a much-needed vacation. While we’ve covered Fasten before here at CardRates, we wanted to hear from Zachs directly about his company’s endeavors, including its efforts to help dealers grow customer loyalty through the Fasten card.

The Fasten card, which the company introduced this spring, allows cardholders to earn more points when they use it at one of Fasten’s partners.

Fasten’s decision to offer a card that rewards drivers meets a need that many people share.

“There’s only one county in the entire country where driving is not the primary mode of transportation, and that’s Manhattan,” Zachs told us. “And so whether you’re an auto enthusiast or you’re just driving yourself to work and your kids to school every day, your car is obviously something that you can’t live without.”

Having a large potential customer base can help a CEO sleep a bit better at night. But it’s also important for a company that’s launching a new credit card to understand how it’s going to differentiate itself.

“As a de novo card, you really need to find your distribution niche,” Zachs told us. “For us, that’s dealers. Verticalized cards can help you get in front of a customer in a low CAC model.”

Fintechs that are considering developing a new credit card program may feel disheartened when they survey the crowded card landscape and realize how tough it will be to stand out.

The market is full of options for people seeking a new card from offerings from major credit card companies to products from smaller issuers. Zachs told us that many cards center on reward programs that align with popular spending categories such as fuel or travel.

He said going after spend categories people focus on can help a credit card company find success.

“Everyone drives and thinks about car-related costs — auto spend is 5% of the U.S. GDP,” Zachs said. “It can be difficult to compete with cards from companies like Chase because their marketing budgets are a lot bigger than ours are. So coming out with another travel card and finding success is very difficult, I think.”

Fasten took the route of finding a spend category where the company’s card could be the top-of-wallet payment tool for people. And car-related expenditures can eat up a significant portion of a person’s savings.

The U.S. Department of Transportation pegs transportation costs as “one of the highest annual consumer expenditures.” While gasoline and car repairs can be costly, the bulk of consumer spending on transportation goes toward purchasing a new vehicle.

That means Fasten has a built-in audience for its new card that rewards auto-related purchases. A new or used car can be one of the most expensive purchases a person makes in their life, so anything that’s going to help them cut down on the costs of buying and owning a car stands to appeal to drivers.

“Our whole thing is car affordability,” Zachs told us. “People are spending the money anyway, so they might as well get the points for it.”

The Fasten card provides dealers with a powerful tool to retain a customer’s business. For dealers, enticing a customer to use their repair shop when their car requires servicing can be a key to earning that car owner’s loyalty.

An industry study reveals that 74% of people who elect to have the car dealership where they purchased their car service their vehicle “said they were more likely to return there to purchase their next vehicle.”

Zachs said that while every dealer wants as many customers as possible to come in for service and maintenance, on average, only about 30% of people do return to their dealership for that purpose.

“As we thought about this, we wanted to get that number from 30% to something significantly higher,” Zachs told us. “Now, dealers can really take advantage of the data they have to reach out to customers who need to have their car’s oil changed and offer them points, which are essentially a discount for the customer.”

Approximately 30% of people take their car for service to the dealer they purchased it from, according to Zachs.

With the Fasten card on the market for a couple of months, the company is turning its attention in part to other tools it can offer to make its program more valuable to dealers and cardholders.

Zachs said the company is planning to release a calculator that helps car owners assess how much they can save by using the Fasten card.

“Our ROI calculator shows people how they can decrease the cost of their vehicle through the card, especially if we are your primary credit card,” Zachs said. “If you have someone spending five, six, or seven grand a month on their card, they can lower the price of their vehicle by over 10%. That’s real savings for Americans.”