Fallout from cash for clunkers

[lostinblue 1,989]

A hard road for the poor in need of cars

Few programs are available to help low-income workers get behind the wheel.

Lisa Twombly used all her savings -- $4,000 -- to buy a car because she needed… (Don Bartletti / Los Angeles Times)November 03, 2011|By Ken Bensinger, Los Angeles Times

No car, no work. That's the conclusion Lisa Twombly reached as she fought to hang on to her job as a caretaker for an elderly San Diego couple. Taking the bus and bumming rides from friends wasn't cutting it, and she was repeatedly late for work.

Told she'd be fired if it happened again, Twombly put down $4,000 — all her savings — on a 9-year-old Chrysler Sebring with 95,000 miles. The dealership lent her the $2,600 balance at a steep 18% interest rate.

A few months later, the Sebring broke down and she got into a dispute with the dealer over who should pay for repairs. Twombly quit making loan payments, and Dig's Wheels of Escondido, Calif., repossessed the car.

She again struggled to get to work on time and was fired. That set off a chain of events that left the 38-year-old single mother and her two children homeless for six weeks. "I don't know what I'm going to do," said Twombly, who is still out of work. "I lost my job because I lost my car."

For more than a century, efforts to help the disadvantaged have focused on education, healthcare, nutrition and housing. Almost nothing has been done to help the working poor afford cars, despite research that indicates it would help alleviate poverty.

About 1 in 4 needy U.S. families do not have a car, according to the Annie E. Casey Foundation. That's a serious handicap for the millions of Americans who don't have access to robust mass transit.

A nationwide survey of 353 people who bought cars with help from a nonprofit group called Ways to Work found that 72% reported an increase in income. Of those who were on public assistance when they acquired a car, 87% were no longer receiving it a few years later.

Other studies have found that low-income people were more involved in community activities and had better access to healthcare after getting cars, while their children participated more frequently in after-school programs.

"You're more likely to have a job and less likely to be fired," said Evelyn Blumenberg, a professor of urban planning at UCLA who studies transportation and poverty. "It's just a no-brainer that low-income families need cars."

Yet there are almost no state or federal programs to meet the need.

The U.S. Transportation Department plans to spend $71 billion this fiscal year on roads and bridges, $22 billion on public transit and more than $8 billion on rail projects, but has allocated no money to help put the poor behind the wheel.

Under the Community Reinvestment Act, the Federal Reserve encourages banks to provide loans to struggling farmers, disadvantaged people hoping to buy homes and small businesses that want to expand — but not to people who need cars to work.

If anything, the government has hindered the working poor's access to cars. The 2009 Cash-for-Clunkers program, for example, put 690,000 running vehicles in the junkyard, making the used cars that remained more expensive.

"Those cars could have been used for very needy working-class families," said Carolyn Hayden, a Glendarden, Md., transportation consultant. "It will go down in the annals as a missed opportunity."

The lack of alternatives drives millions of families into the arms of Buy Here Pay Here dealers, known for selling used cars at stiff markups and with high-interest loans. Many of the buyers eventually default, and the dealers repossess the vehicles and often put them back up for sale. Dealers sometimes sell the same car again and again.

The Buy Here Pay Here industry has prospered during the economic downturn, selling to people whose incomes and credit ratings have taken a hit. Dealers say that they are meeting a societal need and not just squeezing profits from people who are down on their luck.

"If we don't finance these people, they have no way to get to their job," said Ken Shilson, founder of the National Alliance of Buy Here Pay Here Dealers in Houston. "Our dealers are providing a service no one else will."

Andrew Digerness, the Buy Here Pay Here dealer who sold Lisa Twombly her car, declined to talk about details of her repossession. But he said he gives customers a three-month grace period before taking back their cars, and that only 5% of his loans end in default. "I don't like to repo," Digerness said. "But there are certain customers that don't have a grasp of reality."http://articles.latimes.com/2011/nov/03/business/la-fi-buyhere-payhere-20111103

There are alternatives to Buy Here Pay Here lots, but not many.

About 160 nonprofit groups nationwide focus on providing affordable used cars to needy families. None is in Southern California, although some churches and other nonprofits provide used cars as part of broader charitable efforts.

The dedicated used-car programs work in different ways. Some receive donated vehicles. Others buy cars at auction, using private donations or public funds. Recipients are given cars outright or are allowed to purchase them with reduced rate loans _____________________________________________________________________________________________________________________

If anything, the government has hindered the working poor's access to cars. The 2009 Cash-for-Clunkers program, for example, put 690,000 running vehicles in the junkyard, making the used cars that remained more expensive.

"Those cars could have been used for very needy working-class families," said Carolyn Hayden, a Glendarden, Md., transportation consultant. "It will go down in the annals as a missed opportunity."

Liberals say it is a "missed oppertunity" The RWNS understood this from day one......Good cars destroyed to help the unions.Obama could have shown how green he was 。Mandate 30 mph+ cars which he did not. Showed his true colors right there. It is not about the environment it is about union payoffs.

[slim 1,530]

If she had a husband I bet she'd have a car.

[ready4ONE 5,400]

RWN ancient BS rises again. Campaign in full swing!

No viable candidate so the voting public gets treated to idiotic stretches like this OP.

[Susita 175]

This article is very interesting. As a matter of fact, just a few weeks ago I heard an interview on NPR about the very same thing:

Some Used Car Lots Target Those With Bad Credit

There really is a lot of truth to this. Where I live (outside of the NYC metro area), we have a rediculously poor bus system and the LIRR basically caters to those who travel to and from the city. The local people have no way to get around unless they own a car. These buy here, pay here lots are what a lot of people are forced to use.

[dalegg 143]

No car, no work. That's the conclusion Lisa Twombly reached as she fought to hang on to her job as a caretaker for an elderly San Diego couple. Taking the bus and bumming rides from friends wasn't cutting it, and she was repeatedly late for work.

We Californian's are so awesome when it comes to carpooling and use of public transportation.

[Rattlehead 69]

This article is very interesting. As a matter of fact, just a few weeks ago I heard an interview on NPR about the very same thing:

Some Used Car Lots Target Those With Bad Credit

There really is a lot of truth to this. Where I live (outside of the NYC metro area), we have a rediculously poor bus system and the LIRR basically caters to those who travel to and from the city. The local people have no way to get around unless they own a car. These buy here, pay here lots are what a lot of people are forced to use.

Those lots have been around for ages- "we can get ANYONE financed" (just don't mention an interest rate)

Stay away from them- problem solved.

[Danno 1,228]

Those lots have been around for ages- "we can get ANYONE financed" (just don't mention an interest rate)

Stay away from them- problem solved.

IN other words... let them eat cake?

The poor don't have the money to just pay cash, they require financing and where else can they get it?

How Big-Gov made their plight worse was by removing: what was it millions of second hand cars from the market place driving up the price of the remaining.

Destroying perfectly good running cars (by law) rather than put these vehicles into the hands of the needy or the market place.

[SMOKE 1,426]

Destroying perfectly good running cars (by law) rather than put these vehicles into the hands of the needy or the market place.

MANY of them were not actually destroyed. they've been parted out by the salvage yards, that were suppose to destroy them.

[Obama 2012 1,714]

RWN ancient BS rises again. Campaign in full swing!

No viable candidate so the voting public gets treated to idiotic stretches like this OP.

stretches?

Charities lost hundreds of thousands of dollars thanks to Cash for Clunkers, used car prices went up... There's not "BS" about it.

[Danno 1,228]

MANY of them were not actually destroyed. they've been parted out by the salvage yards, that were suppose to destroy them.

When you say "many" what percentage and what do you base this on?

Anytime you have the Gov't throwing millions perhaps billions of dollars away some enterprising souls along the way will figure out a way to profit, the mass of these cars went to the shredder with only incidental parts allowable to be resold (no engine or drive train).

nearly 700,000 transactions took place, thats a lot of used cars out of the market place.

To ensure that vehicles traded-in under "Cash For Clunkers" will not be resold by dealers, the program outlines a procedure for destructively disabling the engine (and thus also precluding the possibility that any mechanical engine components might be salvaged to be used in the repair of any other vehicles): The motor oil is drained and replaced with a sodium silicate solution, then the engine is started and run until the solution, becoming glass-like when heated, causes engine internals to abrade and ultimately seize.[37] In addition, the salvage or scrap facility which acquires the vehicle cannot sell any powertrain components from the scrap vehicle. This includes the disabled engine (most specifically the long block components), the transmission/transaxle, and in some cases the axle assemblies. The salvage or scrap facility can sell any other component from the scrap vehicle until they are ready to crush and/or shred the vehicle. The salvage or scrap facility has 180 days to ultimately crush and/or shred the vehicle.[citation needed]

http://en.wikipedia.org/wiki/Cash_for_clunkers#Engine_disablement_and_scrappage_criteria

[Susita 175]

Charities lost hundreds of thousands of dollars thanks to Cash for Clunkers, used car prices went up... There's not "BS" about it.

Yep. Demand went up due to the economic crisis & supply went down partially due to Cash for Clunkers, partially due to people opting to buy used instead of new. People lost their homes to foreclosure, many of their credit ratings tanked, people were laid off, etc. Having a car payment wasn't possible for them anymore, or maybe they just couldn't get approved for a loan.

I know I've always bought used, I don't like car payments. I don't like paying high insurance rates on my vehicles either.

I think Cash for Clunkers was good idea in theory, but I don't think they thought it through completely, as to the effects it would have on the used car market. Destroying those vehicles was wasteful and stupid.

[lostinblue 1,989]

This just shows how the left thinks. Democrats don’t care if poor urban minorities have cars. In fact, they would prefer that they be forced to use government-subsidized public transit, thereby putting one more area of their life in the “dependent-on-government” category. This provides just one more reason to lock them into voting Democrat

[Deputy Purple 1,294]

For all of the crying, during that time period my 19 year old daughter was able to secure 2 cheap used cars both of which were reasonably reliable. The first would have lasted a lot longer had she properly maintained it, a lesson that the second (and her current) vehicle is benefiting from.

The woman is this story could have taken her $4,000 and purchased a decent used car from a private seller. In my like only twice have I paid over $4,000 for a used car (the average being about $1,500) and none of them lasted less than a few years.

[웃 910]

A hard road for the poor in need of cars

Few programs are available to help low-income workers get behind the wheel.

Lisa Twombly used all her savings -- $4,000 -- to buy a car because she needed…

You'd be surprised the deals I find routinely on Craigslist. Just absurdly great deals.

Found this 01 Isuzu with nothing wrong with it. You might think I paid $3000, maybe $3500 or even $4000...Nope....$2450 and the guy selling it to me just put $30 in the tank

It's up for sale right now for $4,000 and I should have no problem getting $3500, give or take a couple hundred. I did nothing but clean it....

[Mr. Big Dog 10,747]

Did a quick search on cars.com for vehicles within 30mi of my zip code and found dozens of vehicles for $2K or less.