Like child care, lack of transportation is a common problem facing low-wage workers trying to get and keep a job. Improving job opportunities for all Americans is crucial to strengthening our communities. Unfortunately, not owning a car is increasingly a barrier to economic mobility.
According to Margy Waller, executive director of The Mobility Agenda: “Transportation is the second largest consumer expenditure after housing. Most American workers (88%) drive to work. Public transportation, when available, takes double the time driving, and can be unreliable and unpredictable. In 2000, less than 5 percent of employees used public transportation to get to work, mainly in three large cities. Transportation is key to finding and keeping employment. In recent years, as more jobs have moved to the suburbs, access to a car creates greater access to jobs. Reliable, flexible transportation allows consumers to earn more, to get better jobs, and to have more choices in terms of housing, schools, and activies. In fact, access to a car is positively correlated with an increasae in work hours and higher earnings.”
Thus, an important strategy for strengthening economic mobility and our economy is to ensure that low-wage workers can purchase reliable, affordable cars. This provides credit unions the opportunity to provide auto loan products to lower score members while insuring the products provide adequate returns to the institution.
Denver Community
Used Car Loan for Thin File or Low Score Members » View details
Denver Community Credit Union looks for ways to provide products to low-wage families in a way that provides them lower cost alternatives and provides a level of safety for the credit union. We know that our members need access to lower cost car loans and that many of them were going to buy-here – pay-here auto dealerships. These places charge very high interested and the cars they sell are at inflated prices.
We learned of a program offered by a company called Passtime that would allow us to lower our member’s costs by insuring we will not suffer large losses on these loans. The potential users of this product are members who would not have access to credit union loans due to low credit scores or past payment problems.
Renaissance Community Development Credit Union
Refinance Auto Program » View details
Used Car Loans for Thin File or Low Score Members
Documents
- Research Report: Steer Clear: How Credit Unions Help Car Buyers Avoid Predatory Loans by William Myers, REAL Solutions® Field Coach and Senior Fellow, Aspen Institute. Report funded by The Annie E. Casey Foundation, 2008.
- Affordable Car Ownership Programs: Transporting Families Toward Financial Stability and Success – The Annie E. Casey Foundation
- High Cost or High Opportunity Cost? Transportation and Family Economic Success – Brooking Institution
- Car Financing for Low and Moderate Income Consumers – Aspen Institute
- Pursuit of the Dream: Cars & Jobs in America – The Annie E. Casey Foundation
