By on August 12, 2011

Americans are often quick to celebrate our unique car culture, the whole-hearted embrace of private mobility that seems to embody our independent character. But if you’ve lost your car, or were never able to afford one, you probably don’t spend much time dwelling on the feel-good benefits of our national romance with the automobile. Instead you probably tend to focus on the downsides: sprawling development and inadequate public transportation. As it turns out though, there’s a typically American response to the problem of carlessness: a non-profit founded by two former auto salesmen, which “helps consumers get the best deal on a reliable, fuel-efficient car.” But don’t call it a charity…

The New York Times explains:

More Than Wheels got its start in New Hampshire, where there is little public transportation, and residents are highly dependent upon their cars. The state’s ruggedly individualist bent also probably shaped the program, which is hardly a handout. Clients of More Than Wheels receive many services, but significantly, they pay for them. When [Tammy] Trahan first heard about More Than Wheels she needed to be screened to see if her credit could be repaired. Assured she’d be accepted into the program, she had to pay an application fee of $60. Once accepted, she enrolled in an online course in finance and mending her credit. She learned to be more financially resourceful, using Freecycle and other online resources to avoid spending. With a counselor, she looked up her credit scores and worked out a strategy to pay off her old debts. (In the meantime More Than Wheels gave her a “bridge car” — a used Honda — to drive to and from work. (She had to pay $300 a month for the car and sold the Jeep to the mechanic who had fixed it over the years for $500.) When she’d been paying off her debts for six months (other conditions include holding the same job and living in the same place) she became eligible for a car loan.

More Than Wheels is still a small organization, but only five percent of the 1,450 families they’ve helped have defaulted on loans, a number well below the industry average. Read more at the Times, or check out the More Than Wheels website to find out how you can help. If you appreciate your mobility and want to help fellow Americans help themselves obtain theirs, this sounds like on of the better options out there. [Hat Tip: David Holzman]

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15 Comments on “More Than Wheels: The Mobility Anti-Charity...”

  • avatar

    $300 per month for a used Honda? In road-salt New Hampshire? Damn, being poor is expensive!

    • 0 avatar

      being poor in America can be very expensive….just look at payday loans, pay as you go mobile phones, and check cashing fees.

      on one hand, they are charging very high fees. however, they are also taking an active role in helping consumers rebuild their credit at the same time.

      • 0 avatar

        When a bank charges you a fee to cash a check, it’s tantamount to extortion. I’m serious. Look up the definition of extortion. Paying someone a fee to get what’s rightfully yours is the very definition of extortion. When someone gives me a check, it says “Pay to the order of”, not “pay to the order of X if he pays my bank money”.

        Not long ago I tried to cash a $15 check from a customer. The bank wanted to charge me a $7 fee on a $15 check. If that was interest, that would be considered usurious.

        Of course the same banks claim that they don’t make a profit on $35 bounced check fees, and somehow, the debits and credits always are applied in whatever sequence is most likely going to bounce checks.

      • 0 avatar

        Most pay as you go mobile phones are far more sane than the typical 2 year contracts.

        The lower cost and consumer control is amazing with the good pay as you go options.

        Pay as you go unthethers the phone hardware from the service.

        No one would tolerate having to buy your PC and a 2 year internet access plan from Dell or having to buy a TV set and a 2 year cable contract from Verizon (Comcast, etc).
        But that is exactly what most Americans do for cell/smart phone service.

        Spending $8-25 a month and being able to walk away at any time is possible with the better pay as you go mobile phone choices out there.

        A poor person with a 2 year phone plan is a person making poor choices.

      • 0 avatar

        @Ronnie: +1 How else did the banks get back to such healthy profits? By fee-ing and fining us for every damned transaction they can think of.

        You’re absolutely right. It’s our money. Why do I have to pay these fees?

      • 0 avatar

        @Fleet: Best thing I ever did for my wallet was to go to a PAYGO phone. I still have a land line at the house, so I/we use that for long distance long duration calls. My cell is just for short convos and texting (with co workers and my children). We went from $140/month in cell charges to about $35 (depending upon exact usage).

        I hate to say never, but I won’t go back to a contract phone anytime soon.

  • avatar

    Maybe I’m just an old cynic, but I suspect somebody somewhere intends to become very wealthy off the back of this.

    • 0 avatar

      Well that’s kind of obvious, isn’t it? It sounds like your typical BHPH scumbag used car lot, only with better advertising. I don’t know why Niedermeyer is hyping it up, I guess he’s more gullible than I thought.

      Or perhaps this is Niedermeyer’s kind of “charity”, the kind where someone takes a seventeen-year-old Honda that’s been through two hundred and fifty thousand miles of road salt and casual neglect before someone donated it to get a quick tax write off (KBB value: $1500, tops) and rents it out to someone who just got laid off for $300 per month, for six months, before they’ll even let them pay their usurious BHPH car loan at an APR that would embarrass a credit card company.

      • 0 avatar

        If you actually read the article you would find out that the woman who was using the Honda as a bridge was able, after six months, to qualify for a loan through these people that enabled her to purchase a brand now Yaris with a $300/month at a low interest rate.

        Contrast this with her previous situation: she had had a ’93 Grand Cherokee which was constantly breaking down, which had cost her $9000 used but with the high interest on the loan that such people typically get, the total cost was $20k. Her monthly gasoline cost had been $500 on the Cherokee; now on the Yaris it was $120. Her kids now could have confidence she would arrive when she said she would, because the Yaris didn’t break down all the time, unlike the Cherokee, and she didn’t have those big repair bills anymore.

        Why don’t you read the article before you accuse Mr. Niedermeyer of being gullible?

      • 0 avatar

        It sounds like your typical BHPH scumbag used car lot, only with better advertising.

        That isn’t it. This sounds more like a version of Consumer Credit Counselors that got into the auto brokerage business.

        The user fee sounds a bit steep, and the “low interest loans” (whatever that means) have 5 1/2 year payment terms. But from the sound of it, it’s possible that this may be a good alternative for subprime borrowers who are trying to buy a new car with poor credit. It could be a way to avoid the BHPH lot.

  • avatar

    I should have seen it coming, being a NYT story. Started to gag after the second reference to “carbon emissions”. Trust a NYT writer to get right to the important part of the story.

    The woman in the story didn’t need a course on managing finances; her financial situation is thanks to a dirtbag ex. They don’t let you move (even if there’s crack dealers in the hall & perverts next door sizing up your kids?) or change jobs (even if you find a better paying job closer to home?); sounds like a typical over-intrusive approach by know-it-all activist types.

    $60 to apply & an $895 “fee”? Sounds like someone set out to do good and ended up doing very well.

    • 0 avatar

      At first I actually agreed with you; before reading the story, the blurb posted here made it seem like any reference to carbon was superfluous. But then I read the full article. First and foremost, this was posted in the opinion pages, so IMHO anything the author writes is fine as long as it is relevant. The author is writing about impact of cars on peoples’ lives, both individually as in the case of the Yaris owner, and in the case of society as a whole. She didn’t beat the energy angle repeatedly, she mentioned it as one of several benefits that was realized by this program. Carbon issues aside, the righties should love this. It’s not a handout, somebody is making real money, it focuses on personal responsibility, somebody is making money, and it may even help somebody caught in the loop of poverty. What I find reprehensible is that in New Hampshire auto insurance is optional. I never knew that. If this person killed somebody or caused major property damage I am assuming the other person’s insurance would pay out and this woman would be either in jail or her wages would be garnished forever. At that point why work at all? Who would take care of her kids?

      • 0 avatar
        Steven Lang

        In practice an awful lot of people simply don’t pay on their insurance. Regardless of what the state mandates.

        What this organization is doing in practice is eliminating front end risk. There is a LOT of risk when dealing with subprime borrowers. More than what most consumers would expect or understand.

        Credit histories in particular usually tell you very little of the entire story and you can get anything from meth addicts to identity thieves trying to finance your property.

        The trick in this business as it applies to ‘potential’ customers is threefold.

        1) Create a strong auditing process and learn to detect the subtleties of ‘bullshit behavior’. You have to be the equivalent of an Israeli airport screener to be successful.

        2) Get what you can up front. One of the ways I was able to develop my own version of helping folks become ‘keepers’ instead of ‘debtors’ is by making them have a lot of skin early in the game.

        By having them rent for ten weeks, and putting half that payment towards the vehicle, I find out if they will be a good customer and they find out if they will have a good car. Once they have a substantial amount of money in the process, and you offer these folks services such as repairing at cost, free towing, and waiving late fees, then there is an opportunity for them to become keepers.

        But you DO absolutely need a trial period to cover your cost and risks.

        3) Put a GPS on everything you sell.

        I have never lost a vehicle in three years. My cost in the vehicles I finance is usually in the $2000 to $3000 range and I am not about to let a four-figured asset float. in the netherworld of thieves and fraudsters.

        As of today my success rate has been 86% in a business where 67% is the average. I have also likely lost a few deals in the process. But I am willing to trade lower risk for a lower return.

    • 0 avatar

      I didn’t see any mention of a dirtbag ex, just that a bad divorce hurt her credit. For all we know she was responsible for the events that led to the divorce or the decisions that led to debts being unpaid during it.

      Most of the time people feel they have some justification in not paying their debts, and most of the time it’s BS. I’ve had plenty of people come in with foreclosures on their credit reports who feel that it shouldn’t negatively effect them because their loan was upside down or ‘everyone is doing it’. The fact is that when you take on a loan either solely or in a joint credit situation you take on the responsibility to make sure it’s paid no matter what or you face the consequences. Your credit score reflects your ability to pay and your history of payment regardless of circumstances. Lenders want customers who have proven that they find ways to make it work in any circumstance, not those that run from their obligations when the going gets tough.

      Many, but granted, not all, of those with poor credit have spotty job histories with lots of gaps and periods of unemployment because they are unwilling to put in the effort to work through less than ideal situations until things get better, or because they have become excellent manipulators so that they can easily get jobs through the interview process, but not keep them once they are asked to prove their worth. Requiring proof of steady employment makes sense. Similarly, being willing to stay at the same location for an extended period of time shows that someone is trying to put down roots and is invested in turning things around, plus, if things go sideways, it’s easier to locate and repossess the collateral.

      I don’t have a lot of sympathy of the situation of those with poor credit. Being poor doesn’t mean that your record of paying your debts also had to be poor – it’s still possible to live within one’s means, it just means that certain unearned luxuries and creature-comforts have to be postponed. Those that have earned their good credit ratings through a history of fiscal responsibility and follow-through on making good on their debts should be rewarded with lower interest rates and easier access to loans in the future. Those who have shown by their own actions that they can’t be trusted to make good on their financial promises should be punished until they can prove their worth again.

      I do like the idea of this program, as even those who have made mistakes in the past can always turn things around. If they only have a 5% default rate they are obviously doing something right.

  • avatar

    Good News Garage…

    …has been doing similar services for the New England region for over 15 years without having to charge its beneficiaries for the privilege.

    Yeah, More Than Wheels sounds like a ‘typically American response’, i.e. let’s take something that’s a charitable service or public utility and find a way to make a boatload of money off of it.

    Yet another logical outcome of 30+ years of “I’ve upped mine, now up yours” mentality.

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