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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                               _________________

                                   FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997        COMMISSION FILE NO. 33-80055

                VOLKSWAGEN CREDIT AUTO RECEIVABLES CORPORATION
                                 ON BEHALF OF
                      VOLKSWAGEN CREDIT AUTO MASTER TRUST

(Issuer of the Volkswagen Credit Auto Master Trust Floating Rate Dealer Loan
Backed Certificates, Series 1996-1 (the "Certificates"))

             (Exact name of registrant as specified in its charter)


     STATE OF DELAWARE                                                38-2748796
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

     3800 HAMLIN ROAD                                                      48326
     Auburn Hills, Michigan                                           (Zip Code)
     (Address of principal executive offices)

     Registrant's telephone number, including area code:  (248) 340-4938

                                ---------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

     Form 8-A was filed with the Securities and Exchange Commission (the
"Commission") registering the Series of Certificates pursuant to Section 12(g)
of the Securities Exchange Act of 1934 (the "Act").

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Act") during the preceding 12 months (or for such period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

     YES     X *   NO
          --------     -------

     State the aggregate market value of the voting stock held by non-affiliates
of the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked price of
such stock, as of a specific date within 60 days prior to the date of filing.
(See definition of affiliate in Rule 405, 17 C.F.R. 230.405):

     NOT APPLICABLE


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     *  On May 9, 1997, the registrant was issued a no-action letter (the "No-
Action Letter") by the commission with respect to certain of the registrant's
reporting requirements pursuant to Section 13 or 15(d) of the Act.  This Form
10-K has been prepared in accordance with the terms of such No-Action Letter.

                    FORM 10-K (Pursuant to No-Action Letter)
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                                     PART 1

ITEM 1.   BUSINESS.

             Omitted pursuant to the No-Action Letter.

ITEM 2.   PROPERTIES.

             Pursuant to Section 3.06 of the Pooling and Servicing Agreement
     (the "Pooling Agreement") dated as of February 29, 1996 relating to the
     Volkswagen Credit Auto Master Trust (the "Trust") among Volkswagen Credit
     Auto Receivables Corporation, VW Credit, Inc. and Citibank, N.A., as
     trustee (the "Trustee"), Coopers & Lybrand L.L.P. has performed certain
     procedures in connection with the Monthly Servicer's Certificates (the
     "Monthly Certificates") for the months of January 1997 through December
     1997. The Monthly Certificates contain information relating to the
     receivables (the "Receivables") and the accounts from which the Receivables
     arise (the "Accounts") and are prepared by the Servicer and delivered to
     the Trustee pursuant to Section 3.04 of the Pooling Agreement. The report
     issued by Coopers & Lybrand L.L.P. in connection with the servicing
     activities of VW Credit, Inc., as servicer (in such capacity, the
     "Servicer"), is attached hereto as Exhibit 99.2. The Monthly Certificates
     containing information relating to the Receivables and the Accounts for the
     Collection Periods from and including January 1997 through December 1997
     are incorporated by reference from the registrant's Current Reports on Form
     8-K filed with the Commission on February 26, 1997, March 26, 1997, April
     28, 1997, May 21, 1997, June 23, 1997, July 23, 1997, August 21, 1997,
     September 23, 1997, October 23, 1997, December 1, 1997, December 23, 1997,
     January 30, 1998, respectively.

ITEM 3.   LEGAL PROCEEDINGS.

             The registrant knows of no material pending legal proceedings
     involving the Trust, Volkswagen Credit Auto Receivables Corporation, VW
     Credit, Inc. or the Trustee (in its capacity as such), other than routine
     litigation incidental to the business of the Trust, Volkswagen Credit Auto
     Receivables Corporation, VW Credit, Inc. or the Trust (in its capacity as
     such).

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

             None.

                                    PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

        (a)  To the best knowledge of the registrant, there is no established
             public trading market for the Certificates.

        (b)  The Certificates are represented by one or more certificates
             registered in the name of Cede & Co. ("Cede"), the nominee of The
             Depository Trust Company ("DTC").

        (c)  Omitted pursuant to the No-Action Letter.

ITEM 6.   SELECTED FINANCIAL DATA.

             Omitted pursuant to the No-Action Letter.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION.

             Omitted pursuant to the No-Action Letter.


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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             Omitted pursuant to the No-Action Letter.

ITEM 9.   CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

             None.

                                    PART III

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

             (a)  The Certificates are represented by one or more certificates
     registered in the name of Cede, the nominee of DTC, and an investor holding
     an interest in the Trust is not entitled to receive a certificate
     representing such interest except in limited circumstances set forth in the
     Pooling Agreement.  Accordingly Cede is the sole holder of record of
     Certificates, which it holds on behalf of brokers, dealers, bank, and other
     direct participants in the DTC system.  Such direct participants may hold
     Certificates for their own accounts or for the accounts of their customers.
     The name and address of Cede is Cede & Co., c/o The Depository Trust
     Company, Seven Hanover Square, New York, NY  10004.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

             There have not been, and there are not currently proposed, any
     transactions, to which either the Trust, Volkswagen Credit Auto Receivables
     Corporation, as seller, VW Credit, Inc., as Servicer, or the Trustee, on
     behalf of the Trust, is a party with any Certificateholder who owns of
     record more than five percent of the Certificates.

                                    PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

             (a)  Omitted pursuant to the No-Action Letter.

             (b)  The registrant has filed Current Reports on Form 8-K
     containing certain financial information with regard to the Trust, the
     Receivables and the Accounts, in accordance with the No-Action Letter, on
     February 26, 1997, March 26, 1997, April 28, 1997, May 21, 1997, June 23,
     1997, July 23, 1997, August 21, 1997, September 23, 1997, October 23, 1997,
     December 1, 1997, December 23, 1997, January 30, 1998.

             (c) 3.1  The Articles of Incorporation and By-Laws of the
                      registrant are incorporated by reference from Exhibits 3.1
                      and 3.2, respectively, of the registrant's Registration
                      Statement on Form S-3 (File No. 33-80055).

                 4.1  The Pooling Agreement and the Series 1996-1 Supplement
                      thereto are incorporated by reference from Exhibits 2.2
                      and 2.3, respectively, of the registrant's Form 8A filed
                      with the Commission on September 13, 1996.

                 5.1  The opinion of Cravath, Swaine & Moore with respect to
                      certain matters involving the Certificates is incorporated
                      by reference from Exhibit 5.1 of the registrant's
                      Registration Statement on Form S-3 (File No. 33-80055).

                 8.1  The opinion of Cravath, Swaine & Moore with respect to
                      federal tax matters s incorporated by reference from
                      Exhibit 8.1 of the registrant's Registration Statement on
                      Form S-3 (File No. 33-80055).

                 8.2  The opinion of Honigman, Miller Schwartz & Cohn with
                      respect to Michigan state tax matters is incorporated by
                      reference from Exhibit 8.2 of the registrant's
                      Registration Statement on Form S-3 (File No. 33-80055).

                23.1  The consent of Cravath, Swaine & Moore is incorporated by
                      reference from Exhibit 23.1 of the registrant's
                      Registration Statement on Form S-3 (File 33-80055).
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                23.2  The Consent of Honigman, Miller, Schwartz & Cohn is
                      incorporated by reference from Exhibit 23.2 of the
                      registrant's Registration Statement on Form S-3 (File No.
                      33-80055).

                99.1  The Annual Certificate of VW Credit, Inc., as Servicer is
                      attached hereto as Exhibit 99.1

                99.2  The report on the activities of VW Credit, Inc., as
                      Servicer, prepared by Coopers & Lybrand L.L.P., pursuant
                      to Section 3.06 of the Pooling Agreement is Attached
                      hereto as Exhibit 99.2.

                99.3  The Monthly Certificates containing information relating
                      to the Receivables and the Accounts for the Collection
                      Periods from and including January 1997 through December
                      1997 are incorporated by reference from the registrant's
                      Current Reports on Form 8-K filed with the Commission on
                      February 26, 1997, March 26, 1997, April 28, 1997, May 21,
                      1997, June 23, 1997, July 23, 1997, August 21, 1997,
                      September 23, 1997, October 23, 1997, December 1, 1997,
                      December 23, 1997, January 30, 1998, respectively.