Operating a program that provides reliable used cars to low-income families
Abstract
Lack of dependable transportation presents a significant barrier to consistent employment for many low-income workers. Wheels to Work, a joint venture of Rockingham Community Action and Good News Garage New Hampshire, provides low-income families with dependable transportation at affordable terms to promote self-reliance and the development of a productive workforce. The program offers tax credits to companies that support it and car loan recipients receive budget and car maintenance training.
Issue
According to the 1990 U.S. Census, 30 percent of New Hampshire residents who are living in poverty and looking for work do not own vehicles. This not only affects the economic futures of these families, but businesses are also negatively impacted when employees are unable to get to work on time (or at all) due to chronic vehicle breakdowns and the lack of access to public transportation.
For individuals receiving TANF (Temporary Assistance for Needy Families) who are striving to transition from welfare to work, having a reliable car can mean the difference between achieving employment and financial self-reliance, or continued poverty when their TANF benefits end. The aim of Wheels to Work (W2W) is to provide affordable car ownership opportunities to enable low-income families to obtain and keep jobs and to achieve financial self-reliance.
Action
Car ownership programs for low-income workers have been developed in a number of other states, but New Hampshire has the unique advantage of offering tax credits to companies that support Wheels to Work. The tax credits, which are authorized by the New Hampshire Community Development Finance Authority, may be applied against one or more of these state business taxes: business enterprise tax, business profits tax, and insurance premium tax.
With Wheels to Work, the tax credits apply in two ways:
- Car dealers donating cars to the program receive state business tax credits equal to 75 percent of the trade-in value of the vehicle.
- Companies providing financial support receive state business tax credits equal to 75 percent of the contribution.
Most W2W participants who qualify for a small loan receive an education about car loans and the importance of maintaining good credit and paying bills on time. When they receive the car from W2W, loan participants also receive budget and car maintenance training. The vehicle helps them to complete their employment and educational goals.
Participants who do not qualify for a small loan may be placed on a "donated wheels" list to receive a state-inspected car from a community member or organization to help them complete their employment and educational goals while improving their financial situation so that they will be able to afford a small loan in the future.
Rockingham Community Action (the program sponsor) oversees the loans on the vehicles as second lienholder on the title, after the financial institution. W2W is also listed as additional insured or lost payee on the insurance policy for the participant so they receive regular updates on coverage and payments.
Context
The Wheels to Work program in New Hampshire is a statewide program operated by Rockingham Community Action, a private, nonprofit organization dedicated to helping people overcome hardships and achieve self-reliance, along with The New Hampshire Good News Garage.
Good News Garage creates economic opportunity by providing affordable and reliable transportation options to people in need. A program of Lutheran Social Services of New England, Good News Garage programs are located in New Hampshire, Vermont, Massachusetts, and Connecticut.
Of 33 companies (representing 3,344 workers) who responded to a survey by the Greater Seacoast Transportation Task Force:
- Fifty-four percent said that transportation was often or sometimes a factor in their ability to hire new employees
- Forty-five percent said that the lack of transportation resulted in excessive lateness, absenteeism, and job loss among their employees Source: http://www.seacoastonline.com/2000news/9_10biz.htm
Many low-income workers who own cars fall into a vicious financial cycle: they have frequent and costly repairs, but they cannot afford to buy a better vehicle and end up spending more money than their aging cars are worth. When the car finally stops running, another car with high mileage is purchased at a low price, and the cycle begins again. This constant drain on the family's financial resources makes it difficult to get ahead.
Outcome
Wheels to Work has been able to deliver vehicles to more than 40 low-income New Hampshire families.
Evidence
Wheels to Work conducted a survey in May 2001 and stays in regular contact with all the participants still on the road. Over 85 percent of W2W participants have maintained employment and all but one have continued making an effort to keep loans current and make payments to the lender.
The Good News Garage has received considerable national attention for its W2W and other transportation assistance programs. Features about the programs have appeared in NPR's "All Things Considered," NBC Nightly News, CBS Evening News, Family Circle magazine, Smithsonian magazine, and the Boston Globe, among others.
In July 2000, Good News Garage was honored as one of the Department of Housing and Urban Development's Best of the Best nonprofit agencies in the U.S.
Posted On
November 20, 2001For More Information
Resources
The Good News Garage in Vermont is now able to provide technical assistance such as performing feasibility studies and consulting on operational start-up. A feasibility study will assist decision-makers in determining whether to implement such a program in their locale. The overall success, national and regional recognition, and significant media exposure of the Good News Garage, combined with the longstanding reputation of Lutheran Social Services of New England and its award-winning programs, provide immeasurable credence to a LICO feasibility study provided by Good News Garage Vermont.
For more information contact:
Hal Colston, Regional Community Program Director
Lutheran Community Services of Northern New England
E-mail: Hal@goodnewsgarage.org
Phone: (802) 864-3667, ext. 17
Website: http://www.goodnewsgarage.org
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DID YOU FIND THIS PAGE BECAUSE YOU ARE YOU LOOKING FOR TRANSPORTATION ASSISTANCE?
Be advised that the Resource Center’s Effective Practices Collection is not affiliated with the program described on this page. We do not have information about, nor can we provide assistance with, transportation issues.
For information specific to the Good News Garage in the states of Connecticut, Massachusetts, New Hampshire, or Vermont, refer to their contact information, below. Information for programs in other states can be found at http://goodnewsgarage.org/About-Us/Locations/Other-Programs-Outside-of-New-England.aspx.
Related Practices
Related sites
Good News Garage: national list of car donation programs
Community Development Finance Authority
