CONCORD, N.H.—Every other month Trina Robinson was pouring money into repairs for her 10-year-old Chevy Lumina: $200 here, $300 there for failing ball joints, wheel bearings, struts. The costs — $3,000 in one year alone — were eating into her paycheck and running up the credit card bills.
On top of that, she was paying 24 percent interest on the loan for the Lumina, which had already rolled past 80,000 miles when she bought it, so the $9,000 price tag was really closer to $15,000.
Persistent money and car troubles would leave the 38-year-old mother from Dover agonizing over how to get to her job as a hair stylist and whether she’d be able to visit her 16-year-old son, who has learning and emotional disabilities and attends a special school about 30 miles away in Manchester.
“That was my biggest stress,” Robinson said. “It wasn’t the bills, it wasn’t the household. I can live without my phone, I could live without utilities if I had to. It was more getting to my son and giving him what he needs.”
To do that, she needed to get her finances in order. She enrolled in Bonnie Car Loans and Counseling, a 7-year-old nonprofit organization that not only put her into a car, but a new one with a 6 percent interest rate — and the program for New Hampshire residents guaranteed the loan.
Bonnie CLAC, as it’s known, is loosely modeled after the housing industry’s Fannie Mae. Its aim is to help low- to moderate-income workers take control of their finances, with the goal of buying a new car. The program, which acts as a middleman, negotiates with auto dealerships and banks for discount rates.
A study released last year by the California-based National Economic Development and Law Center identified 151 programs across the country that work at getting low-income workers into their own cars. Many of them fix up older, donated cars. Other programs help people secure loans, but don’t offer what Bonnie CLAC does: help to purchase new cars, said Tim Lohrentz, the study’s main author.
The program has expanded to nine offices in New Hampshire and has helped over 1,000 people. This fall, organizers will open their first out-of-state office, in Lowell, Mass., to further their goal of taking the organization nationwide.
People have sought help from the program for a variety of reasons: They’ve had to declare bankruptcy, their marriage ended in divorce, they had poor credit or no credit history. The program also advises clients who simply want guidance on shopping for a car, including a more expensive one.
It has changed lives. “Many of them have gone on to get better jobs, many of them felt stable and they were saving for houses, their credit went up, and it was amazing,” founder Robert Chambers said.
Chambers was inspired to create the program after working at an auto dealership.
“Every year that I spent in it, I saw more and more circumstances where I saw the car business was taking advantage of particularly lower-income individuals and also minorities and women,” he said.
Many lower-income workers don’t look for their next car until their current one is beyond repairs, he said, “so they’re walking into this dealership at a very vulnerable time and the system manipulates them.”
Often people leave with a car that isn’t reliable and ultimately, is unaffordable.
“If you’re paying 19 percent (interest) for a car, it’s like indentured servitude; you can almost never pay for it,” Chambers said. “Then you add the repair cost and you add the fuel economy, and these people are never shown the new car because it isn’t in the interest of the car salesperson and they don’t know where else to go to do that. So you have a huge, systemic failure in the United States.”
At the start of the program, clients are asked to state their goals — whether it’s buying a house, saving money for college or putting an end to the calls from bill collectors. They’re encouraged to start saving, even if it’s just $5 a month. They work with counselors to pay off debts, and they start by keeping a record of every cent they spend for a month.
“About the third week we get these ‘Ahas! My goodness, I didn’t realize I was spending about $100 a month at Starbucks,'” Chambers said.
Classes address credit scores and how they can push up living costs. They offer tips on saving money on meals.
“Just to know that there’s other people out there like you is just a huge like, ‘Oh, I’m not the only one’ type of thing,” said 38-year-old Ann Marie Aylward, who recently moved from Portsmouth to Biddeford, Maine, and is working toward financing a house after improving her credit through the program. “But then you learn so much from them, and you just brainstorm together with the guidance of someone that understands it and knows how to do it.”
Those who already have cars must demonstrate they will be able to make the payments before getting new cars. The program charges an initial $65 fee, then an $800 consulting fee that is rolled into the car loan. Clients who can’t afford new cars get help buying good, late-model used ones.
Counselors advise how to negotiate the best insurance rates and help clients arrive at their choice of a car.
“They say, ‘What do you think? Do you think you want that amount of payment? How much do you think you want for a monthly payment?'” said Marirose Walker, of Warner, a graduate of Bonnie CLAC. “Then you really have to trust your own gut. … You have the right to say, ‘No, that sounds so good though, and I think we have to keep looking.'”
Robinson received credit counseling to come up with a payment plan and attended the required financial fitness classes to track her spending. After a few months, she said goodbye to her mechanic and was behind the wheel of a 2008 Toyota Corolla.
“I just never even imagined I could do this,” she said. “And my car payment is not much more than it was when I had the junkers.”