Workforce Developments

Everything you want to know about low income car ownership programs

Just last month the National Economic Development and Law Center (NEDLC) issued the findings of what must be the most comprehensive survey to date of low income car ownership (LICO) programs. The study gathered information from 110 different LICO programs across the country working to "improve access to cars for low-wage workers and their families."

Some of these programs buy and sell cars, others just provide financing. Some work with used cars, others with new cars. Some partner with banks and credit unions. Some utilize Individual Development Accounts (IDAs) as part of their programs. The NEDLC report outlines all the different strategies and programs they found. They look at how the programs are structured, how they set eligibility requirements, and where they get their funding from.

This is a tremendous resource for any organization thinking about how to help their clients improve their transportation to work options. Perhaps you'll find an agency listed here that you could partner with. Perhaps you'll get ideas about a new program you could develop. For more info, check out the report, and NEDLC's Low Income Car Ownership Clearinghouse.

Car ownership program founder honored with Purpose Prize

Robert Chambers, founder of the Bonnie CLAC transportation-to-work program in New England, has been honored with a 2006 Purpose Prize. Bonnie CLAC is one of a growing number of low income car ownership (LICO) programs across the country that help low wage workers buy the cars they need to get to work.

LICO program clients are usually single mothers whose credit is too poor to qualify for standard car loans. Desperate for a ride to work, many find themselves buying unreliable used cars at usurious interest rates. Bonnie CLAC works with clients for up to a year, providing financial management training while helping them clean up their credit and save for a downpayment. Once the client is ready, Bonnie CLAC negotiates the car price and loan terms with a local car dealership. The client buys a new car with a bank loan, so she ends up not just with transportation that meets work and family needs, she has access to all the things good credit provides, including the potential down the road for home ownership.

Transportation to work - cars needed!

Just got an email from a colleague in Maryland who runs a transportation to work program called Vehicles for Change.  Ever since the IRS changed the rules limiting how much people can write off on their taxes when they donate a car, donations of cars to programs like his have fallen.  Vehicles for Change and other car programs like it are trying to get the word out - you can still write off the full value of your donation IF you donate your used car to a program that uses the car to help low-income people get to work. 

Vehicles for Change is part of a national network of programs, policy experts and researchers who are trying to help overcome transportation barriers to work.  The problem is that many jobs - especially good jobs with family-supporting benefits - are often located in places that are physically distant from where poor people live.  Too often, public transit doesn't connect those places efficiently - or at all.  Without a car, low-income parents sometimes can't access better jobs.  They sacrifice time with children in order to take multiple buses to work.  Children lose out on opportunities to participate in after-school programs. 

Programs that sell low-cost cars accompanied by fair bank loans can help low-income people not only get to work but also clean up or establish good credit, which can put them on the path to home ownership.  This is especially important for women and single mothers.  A study of Port Jobs' Working Wheels program last year showed that participants who purchased their cars increased hourly earnings by 10%, spent more time with their children, and got their children into after-school and other enrichment activities. 

Of course improved public transportation would help us all, but the reality is that people have to get to work today, and transit systems require hundreds of thousands of dollars and tremendous public will that takes years to develop.

Many of the nonprofits that take donation of your car turn around and sell it, then keep the cash for their programs.  A lot of good organizations use that money well.  But if you want to take the full write-off on your taxes and have your car help a low-income mom get to work and her children to school, consider donating it to a car program in your community.

Working Wheels increases wages, improves family lives

A new evaluation of the Working Wheels program founded by Port Jobs at Fremont Public Association in Seattle found that the nonprofit car ownership program has led to increased wages and improved family life for its clients. Moreover, many more clients are now using banks (rather than predatory payday lenders) and saving money.  The study, titled Gaining Traction, compared 173 Working Wheels clients to a group of people working in similar occupations. In contrast to the comparison group Working Wheels clients are

1. Working more hours;
   
2. Earning more money in total;
   
3. Making higher hourly wages; and
   
4. Relying less on public assistance.
   

Working Wheels is one of a national network of programs that are helping low income workers find transportation to work while also building their credit. Other programs include Bonnie CLAC and Good News Garage in New England, JumpStart and Ways to Work in the Midwest, and Vehicles for Change in the Mid-Atlantic region. For an analysis of how transit-dependent low income families lose out on important opportunities, see High Cost or High Opportunity Cost? by Margy Waller, formerly at The Brookings Institution.