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We Knew We Were Right!

For the last 10 years, On the Road Lending has worked to bring affordable loans for reliable cars to working families. Along the way, we started calling our efforts “prosperity movement.” It seemed obvious to us, that better cars lead to better jobs and better lives. But sometimes it’s nice to have validation.

Recently three esteemed urban planners, Michael Manville, Professor of Urban Planning at the UCLA Luskin School of Public Affairs, Michael Smart,  Associate Professor at the Edward J. Bloustein School of Policy and Planning at Rutgers University, and David A. King, Associate Professor in the School of Geographical Sciences and Urban Planning at Arizona State University wrote an article for Transfers Magazine that examined what has always been our value proposition: “The Necessity of Cars: America is built for driving. We should change that, but in the meantime, we should help low-income people drive.”

The conclusion of the article is something we often say when seeking supporters—that policymakers concerned about access to opportunity should consider subsidizing low-income car ownership.

The evidence cited supports the work we have been growing for the last decade. Between 1960 and 2014, the U.S. poverty rate fell from 24% to 14%. But for those without vehicles, the poverty rate rose—from 42% to 44%. A small increase, but a disturbing percentage to begin with! Between 1969 and 2013, the inflation-adjusted median income of families with cars rose 20% from $55,000 to $62,000, while the income of families without vehicles fell 34%, from $26,000 to $17,000. This is an incredible statistic. That inflation-adjusted household income of families who don’t have cars was less in 2013 than in 1969 is truly mind boggling!

While it’s widely known that income gaps in the U.S. have widened over the last several decades because the rich are getting richer, what’s often overlooked is that the poorest among us are getting poorer—especially those without cars. Households without cars in 2013 earned less money than households without vehicles in 1969.

The authors compare having a vehicle to having a college degree but say that “carlessness” draws an even more distinct dividing line. They say that over time, college degrees have become more valuable, but average earnings for people without college degrees have not gone backwards. Carlessness, however, is associated with losing ground!

Our clients would certainly agree. They know the value a car brings and the ability it provides to make progress on all fronts—including education! They not only get better jobs when they have cars, but they go back to school and get better educations as well. And they pass along their good fortune, often giving friends and family rides. A car has an impressive multiplying effect.

Unfortunately, we know that we are in the minority of lenders. As the authors note, Americans who can’t afford cars are rarely offered help getting them. Instead, they are offered public transportation, which in most metropolitan areas and all rural areas is an inferior substitute for driving a car. Our clients tell us nightmare stories about two- and three-hour commutes and the difficulty of finding good jobs that are reachable with public transportation Of course as most urban planners would suggest, making transit better is a worthy goal, “but it should not prevent us from helping low-income people drive,” they conclude.

Of course, we agree! Which is why we are constantly seeking supporters for our prosperity movement.

In 10 years, On the Road Lending has empowered more than 1,500 families with affordable loans for reliable cars to live their best lives. With an estimated $20,000 economic impact per family per loan, that is nearly $30 million in wealth creation, helping working families transform their futures with the freedom of mobility.