Mornings were chaos when Donna, who then had 32 years and was the mother of small children, she did not have a car. She had to wake up her children at 5 in the morning to take them to school by public transport.
“I was telling them: ‘Kids, grab the cereal bar,'” he told a researcher in an interview for an article published last year in the Journal of Planning Education and Research. “Let’s go”.
This changed after Donna, identified by her first name in the article, connected with the non-profit organization Vehicles for Change (VFC), which describes herself as the Nation’s Largest Affordable Auto Buying Program. Since 1999, VFC has provided more than 7, 000 cars, trucks and minivans to low-income carless families in Maryland, Virginia and Washington DC.
For most people in the United States, owning a car is a necessity, not a luxury. But buying it is also somewhat difficult for many people or represents such a financial burden that obtaining a loan becomes a risk. The people who face the greatest difficulties are also the ones who usually get the highest interest rates. The VFC and programs like this help provide low-interest loans to low-income consumers, helping them rebuild their credit and lift themselves out of poverty.
VFC applicants need a referral from an agency social services and must meet certain income and employment requirements, including having around $ 500 in savings to cover insurance and registration expenses. Once accepted, the VFC manages low-cost loans to 12 months for applicants, with a typical monthly payment of between $ 80 and $ 90. Having previously filed bankruptcy or foreclosure does not affect the applicant’s eligibility for approval, says Simone Baptiste, VFC communications director.
Most cars in the VFC program, many of them donated, less than 15 years, underwent inspections for safety and the odometer does not register more than 150, 000 miles, says Baptiste. They also have a guarantee on the transmission of 6, 000 miles and 6 months.
Nicholas Klein, professor of urban and regional planning at Cornell who wrote the magazine article and interviewed 25 HRV applicants in their research, found that the program greatly improved lives of the people who were admitted.
For example, Donna told her that having a car meant she could get home 2 hours early every night to “make dinner, help my kids with homework, bathe the baby.” Others were able to find better paying jobs.
“Having access to a car provides advantages in accessibility,” says Klein. “You can do more.”
While detailed data on the results of VFC participants are not available, Klein’s anecdotal observations are related to other studies that closely link owning a car with higher income and a better quality of life .
On the one hand, accessing a car, especially in many places in the United States that lack public transportation or where it is unreliable, makes it easier to get to work on time and therefore conserve a job or find new, better-paying job opportunities. Mobility also has a positive impact on lifestyles. “When we talk to beneficiaries, many of them are very excited about taking their children on an adventure,” says Baptiste.
A national program?
Some critics of subsidized car acquisition programs worry that it may contribute negatively to problems like pollution and suburban sprawl, Klein’s article argues. Some are also concerned that the financial burden of owning a car is too demanding for low-income people.
But Klein says critics “don’t look at what happens in the absence of these programs ”.
For example, low-income auto borrowers often have to deal with the used car market , where They may end up getting financing at high annual percentage rates for unreliable and eventually breakdown cars. Many of the people Klein interviewed would have bought a car if it weren’t for the VFC, he notes, “but I don’t think the results would have been that good.”
When you have low income, “the options to buy a car are really very bad,” he explains. “The used car market is treacherous, but the magnitude it reached was truly shocking. People were being scammed, they were buying scrap metal ”. Over the course of more than a decade, one interviewee said that she bought 7 cars that were unreliable or that ended up breaking down.
Klein’s observations complement the results of one Consumer Reports investigation on auto loans. We found that consumers with lower credit can pay interest rates that exceed the 25%.
“This really highlights the degree to which low-income families are facing precarious car purchases,” exclaims Klein.
Where to get help
If you live in Virginia or Maryland, visit the Vehicles for website Change for information on the eligibility requirements and how to apply for the program.
There are also more than 120 similar programs throughout the country, according to Working Cars for Working Families , an initiative of the National Center for Consumer Rights, a non-profit organization .
Those programs provide low-interest car loans and can match savings for a down payment and purchases, the group’s website states.
The Klein study also points to the existence of collaborative local government programs to help low-income consumers repair automobiles, such as the Tune In & Tune Up initiative in California’s San Joaquin Valley, which helps subsidize repairs to vehicles that fail pollution tests.
Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2021, Consumer Reports, Inc.
Consumer Reports has no financial relationship with the advertisers on this site. Consumer Reports is an independent nonprofit organization that works with consumers to create a just, safe, and healthy world. CR does not endorse products or services and does not accept advertising. Copyright © 2021, Consumer Reports, Inc.