In her empty garage Lisa Twombly holds the contract for a used car she bought… (Don Bartletti / Los Angeles…)
Last of three parts
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."
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.