You’ve heard of this dilemma before: No car means no way to get a business off the ground. No business income means no way to get transportation.
An answer to this conundrum arrived in Maine this fall, and it is called More Than Wheels. This New England not-for-profit program, formerly known as Bonnie CLAC, helps consumers get low-interest auto loans for new or reliable slightly used, fuel-efficient cars.
For those consumers with no credit or bad credit, qualified individuals can complete a credit repair program that helps avoid the buy-here-pay-here situations.
“In New Hampshire, we heard stories of 34 percent interest on a junker car,” says Jennifer Foy, Maine’s external affairs and outreach coordinator for More Than Wheels.
Foy says the More Than Wheels approach is different: “We look at an applicant’s whole financial situation. At the end of the month, can they pay for a car loan, gas, and insurance?”
If so, Foy says, the applicant can begin More Than Wheels’ financial fitness course, which teaches applicants how to budget and repair their credit. An applicant’s success is based on behavior change and their willingness to work with More Than Wheels.
“This program is based on income, not credit. Participants must have an income with some left over at the end of each month to cover the cost of car ownership.”
The financial education and meetings are held over the Internet through WebX or Skype. Foy says technology breaks any barriers to access for people with transportation challenges, and works as a cost-efficient way for More Than Wheels to reach participants since most people have access to a computer and camera. It was technology that allowed More Than Wheels to expand to Maine, she says.
“We see it as a great way to use technology in an innovative way,” she says.
There is also the Bridge Program for those with immediate transportation issues. The Bridge Program has a fleet of cars that participants can use for a monthly fee, much like a lease, to fulfill their immediate transportation needs and to establish a positive payment history. The monthly fees paid can be used as a down payment toward a vehicle of their own.
The Supporter Program is for those who have good credit, who just need help negotiating a car deal. A majority of the organization’s loans are handled through credit unions.
Turnaround time for those with no credit or a low credit score is usually three to four months, according to Foy. Those with bad credit may need up to one year in the program before they can purchase a car.
Since 2001, More Than Wheels has proven itself in Vermont, Massachusetts and New Hampshire. Felicite Adjoua, an immigrant from Gabon with no credit, was living in Vermont when she approached Bonnie CLAC for the first time in 2004. Adjoua, a self-employed caretaker, had an old car that finally died.
“I lived up in the mountains and I had a hard time getting around,” Adjoua says. “I had to borrow the car from the lady I was taking care of to run errands for her. I didn’t have any freedom. I was agonizing on how I was going to find the money to buy a better car.”
A friend told her about Bonnie CLAC. “I was skeptical at the beginning … I didn’t have any credit at all,” she says.
Adjoua made the appointment, thinking she didn’t have anything to lose. The organization made the deal for Adjoua, and she was able to secure a Subaru at 4 percent interest. Adjoua finished paying off that loan about a year ahead of time.
“We have a very low default rate,” says Foy. “Less than five percent.”
In 2012, it was time for Adjoua to get a new car.
“I needed a wagon because the people I take care of — I transport wheelchairs and medical equipment.”
So she went back to Bonnie CLAC (now called More Than Wheels) and was able to go through the same process. More Than Wheels negotiated the loan for a newer Subaru wagon, even using her existing car as the down payment. Adjoua was in her new Subaru wagon — a second vehicle through this organization — on Dec. 13.
Now in Maine, More Than Wheels is a deal many shouldn’t pass up.
Gigi Guyton is microenterprise coordinator for Women, Work, and Community covering Cumberland and York Counties. Her office is in South Portland, and can be reached at 799-5025, or by email at email@example.com.