Wheel Get There People Getting to Work Through Car Ownership

Transcription

1 Wheel Get There People Getting to Work Through Car Ownership

2 Minnesota Valley Action Council A Community Action Agency Developing resources and opportunities which empower people and communities MVAC provides programs and services to low income families and individuals that assist them in their journey toward selfreliance. MVAC serves 9 counties in south central Minnesota

3 MVAC Services & Outcome Areas The Six Outcome Measurements Include Local access Basic needs Families and children Housing Self-reliance Senior services Transportation

4 Wheel Get There History: In 1998, the mcknight foundation provided $20 million in minnesota to help with welfare reforms A collaborative effort between 6 non-profit agencies addressed this challenge in south central minnesota MVAC developed a donated car program Wheel get there Donated vehicles were evaluated, repaired, and sold to people on public assistance Reliable, low cost transportation would enable people to gain employment or training

5 Wheel Get There: The Original Concept Loan amount: $750 Loan length: 24 months Loan payment: $35.00 MVAC guaranteed the loans Wells fargo bank collected the payments County TANF staff made the referrals A task force decided which applicant would receive the next car Members included: the community, bank, business, social service, others) The goals were: 1) make the program self-sufficient (through loan repayment), and 2) spin off to individual counties (by creating county task forces)

6 Why MVAC Became a Used Car Dealer Vehicle donors receive a tax deduction: State law requirements Benefits: Reassignment of vehicle titles Dealer plates Costs: License fees Insurance

7 Wheel Get There Was Successful, but... There were some problems: 218 vehicles were donated or purchased 45% were salvaged (91) 152 people received vehicle loans 62 people paid off the loan (41%) 47 people defaulted on the loan (31%) 16 people received a different vehicle (11%) (Our 2 for 1 specials) The demand was greater than the supply Vehicle donations were sporadic Long wait lists caused frustration

8 Wheel Get There Was Successful, but... Typical Donation: 1985 Chevy Celebrity Donated vehicles needed costly repairs Which increased the cost up to $1,500 Extended the loan up to 30 months Increased monthly loan payments to $55.00 Repairs after the sale contributed to High default rates Animosity from buyer WGT was viewed as the big bad car dealer Problems with county partners Who often paid repair bills Vehicles quit running before the loans were paid

9 Staff Time The part-time staff position was not enough to deal with: Vehicle donations Accepting vehicles Arranging for repairs Moving vehicles from place to place Keeping cars in running condition Vehicle storage Where do you put the cars? MN winters cold weather Snow removal

10 Staff Time The part-time staff position was not enough to deal with: Selling vehicles Talking to prospective owners Arranging test drives Loan contracts Arranging time/place Title transfer Problems after the sale Repair issues Defaulted loans/repossessions

11 Inexperienced Owners The typical client was years old... a single parent woman who had never owned a car Many had no experience with car ownership Basic car maintenance was unknown Warning signals were unrecognized or disregarded Many people were not financially prepared Car payments Insurance costs Repair and maintenance costs

12 Irresponsible Owners People were busy- frazzled with daily life The mentality we often worked with was: I should be able to turn the key, and drive wherever I want, whenever I want to go there. Of course I maintain the car...i put gas in it whenever the gauge reads empty! What do you mean? I have to make my car payment every month??? Insurance is a hassle, and I really don t have time to deal with it right now! Like, wow man, you never told me that!!!

13 WGT Had Many Success Stories These were my wheels for the last 3 years. I used to walk because I had to

14 Wheel Get There Success Now I walk, because I want to!

15 The Need for Transportation Continued Nationally: Reliable transportation was one of the biggest indicators of success for people leaving TANF Statewide: The minnesota based wilder research center reported that "Transportation services was the area of greatest unmet need." " Private car ownership was the most successful way of meeting welfare participant's transportation needs " Wilder recommended that "transportation assistance be seen as basic work support, as essential as child care or health care coverage." Locally: The south central workforce council met with TANF providers, community based organizations and other partners. The conclusion: Transportation was the biggest barrier to employment in the area

16 Wheel Get There Too: The new and improved version MVAC received $800,000 in January 2001 from MN Dept. of Human Services to continue the transportation initiative for 2 1/2 years. WGT2 utilized the experience gained from the original program and expanded services to address the problem areas.

17 Wheel Get There Too: The new and improved version Down payment assistance (up to $1,750.00) Guaranteed loans (up to $1,750.00) Full time staff support: MVAC Vehicle Advisor searches for vehicles researches reliability rating for vehicles provides assistance to clients before, during and after car purchase... Car Maintenance Class is mandatory One-on One Budget Counseling is required Incentives for making the loan payments Certificates for free oil changes are sent to clients

18 Wheel Get There Too is Successful Collaboration & Partnerships TANF Caseworkers in 9 county region Make Referrals Take Applications Track client progress Make Final Recommendation for car purchase Assist with clients who have late payments Assist with clients who have defaulted on loans

19 Wheel Get There Too is Successful Collaboration and Partnerships University of Minnesota Extension Services utilizing the Dollar Works program contract to provide: One-on-one budget counseling Budget workshops for long-term financial planning Follow-up sessions when necessary

20 Wheel Get There Too is Successful Collaboration and Partnerships Wells Fargo Bank Loans are written by MVAC Staff County Office locations in 9 counties Loans are guaranteed by MVAC MVAC is first secured party on the title Loans are assigned to Wells Fargo Send payment booklets to customers Track customer payments Assist collecting late payments Provide credit history Most people don t have a savings or checking account. A bank loan is out of the question. WGT loans can help establish credit, or help repair a bad credit history.

21 Wheel Get There Too is Successful Collaboration & Partnerships Building relationships with area business Car dealerships throughout 12 county area Vehicle sales and service Location for Car Maintenance Classes Free Oil Change certificate redemption Service Centers / Repair Businesses Vehicle evaluations and advise Vehicle repairs when needed Vocational Technical College Vehicle repair or Body work

22 Additional Benefits: Working with a Diverse Population South Central Minnesota has a variety of ethnic backgrounds and a variety of family units Hispanic Somali African American Southeast Asian

23 Car sales exceeded program goals Initial peak with gradual decline was anticipated and eventually a stable monthly average 66 cars sold (Jan-June 01) set-up, hiring, training, etc. 112 cars sold (July-Dec 01) Total: 178 vehicles (12 mos.) Referrals: 340 Car Maintenance Classes: 248 Budget Counseling: 212 Incentives sent: 57 Incentives used: This chart shows: 1) The need for car ownership 2) That partnerships work Mar Apr May Jun July Aug Sept Oct Nov Dec Projected # Sold

24 Wheel Get There Too is Successful 208 Loans were issued (3/6/01 to 3/6/02) 10% paid in full Insurance settlements Somali clients found alternatives Tax returns Vehicle sales 10% late on payments Bank sends monthly payment records Caseworkers are notified Clients encouraged to make payments Options and consequences are explained 4% defaults Wells Fargo attempts to collect, but after a certain time period, we pay Client offered choice of paying loan or returning the vehicle OR MVAC can repossess the vehicle Repossessed Vehicles Repossession company utilized Recovered vehicles evaluated/ repaired Useable vehicles are resold Options for collection are being researched and considered

25 Wheel Get There Too is Too Successful Success comes with a cost: The goal: 171 vehicle loans within 18 months The achievement: 178 vehicle loans in 12 months 115% of the goal in 65% if the time Average cost per client served: $2,400 Mar Apr May Jun July Aug Sept Oct Nov Dec Projected # Sold Down payment assistance unavailable until July1,2002 Created unique opportunities with partners

26 Wheel Get There Too Dedicated, knowledgeable staff has made the initiative successful. MVAC Vehicle Advisor Searches the area for cars Arranges vehicle evaluations Conducts Car Maintenance Classes Works with individuals to find a suitable vehicle Provides advise to people before, during and after the sale

27 What every client wants... When people think about getting a new car, they usually get a picture in their head The vehicle advisor helps readjust the image. He explains the concept of the car is a tool. He researches vehicle reliability ratings. He helps people understand which cars will last, and which have the best value. With the down payment assistance provided by WGT2, it is possible to negate the effects of depreciation. After 2 years, the car could still worth what was paid ($1,750). The vehicle then becomes an asset.

28 The A List Otherwise known as a Grandpa car A new Buick buyers average age is 67 This is important, because as a rule, older people have the time, money, and experience to provide regular maintenance. Indicators of Grandpa cars... White wall tires Bug Deflector Deer Alerts St. Christopher statue and/or a compass on the dash (optional)

29 More from the A List... Different people have different needs Family size and personal preference determine the type of vehicle that is searched for by the Vehicle Advisor. An extensive network of car dealers helps ensure that a variety of vehicles are available.

30 In a perfect world, with a perfect program, there are never any problems

31 No program is perfect... Question: Answer: Default What happens to a car when it hits a tree at 60 mph? Perfectly good car Perfectly good price: $3500 Who s driving? Insurance?

32 Wheel Get There Success Stories Roberta: There is no way I would be where I am now if it wasn t for WGT2! She lives in a small rural town with few job opportunities She lacked work skills to get a job Unreliable transportation caused a spotty work history She bought a van through WGT2 in September 2001 She was able to attend Certified Nurses training She now works part-time, but expects to be full-time soon She travels 40 miles each day to get to and from work Roberta loves her job

33 Wheel Get There Success Stories Hello Dan: Remember me? I was the one who was so enthusiastic about buying the 1995 Buick Century through WGT2. Here s my story: I Love My Car!!!!!!!!!!! I take it to the car wash every week. I keep it as clean as possible, and check my oil every week. Aside from becoming a mother, purchasing my very first car is one of my proudest moments. Every month, I joyfully go to the bank to make my loan payment. You have never seen anyone so happy to give money away, especially to a bank! There is no way I would ve been able to buy this car without WGT2. The car has allowed me to be independent. I can get to work, which helps make the car payments. Before having the car, I was restricted to a small area where I could look for a job or go get groceries, etc. Having this new freedom has been so incredible. I hope this program continues it would be such a shame if other people weren t able to get a car. Thanks for all of your help. Sarah

34 Wheel Get There Success Story... This car is the best thing to happen to me in a long time! My kids are so proud to ride in our new car. WGT2 is wonderful. I don t know where I d be without it.thanks! Kari