Should we be subsidizing cars for low-income families?
October 9, 2020
When a woman named Tracy received a car from the nonprofit Vehicles for Change, a nonprofit that awards affordable, used cars to low-income families, she was able to triple her income. Before, she had only been able to work minimum-wage jobs that were within walking distance of her house or accessible by bus. With the car, she could travel further for work and landed a job at a telecom company, which paid her enough to allow her to afford to rent her own apartment.
Other Vehicles for Change awardees told Nicholas Klein, a regional planning professor at Cornell University who interviewed 30 of its recipients for a recently published paper, that a car saved them up to two hours of travel time; they could use that time to cook dinner and help their kids with homework. A car allowed people to choose a doctor with better hours or lower fees and spend less on groceries by price-comparing at stores further away. Some of these families had previously owned cars, but a vetted car from the nonprofit meant they spent less on repairs or didn’t go through multiple vehicles so quickly.
The positive evidence from Klein’s paper illustrates a transportation conundrum in our country: Better access to cars helps low-income residents economically and socially, but more cars on our roads runs counter to efforts to reduce traffic, increase public transit, and curb emissions. “Decades and decades of time, money, and work [have] created a landscape where for most people, a car confers great advantages,” Klein says. That’s not true everywhere; in Manhattan and other city centers transit, walking, and biking are realistic options, but most people don’t live in those places. What can we do for those people, especially low-income families, who need to get around?
In the long term, we can improve public transit and walkability and biking infrastructure in auto-dependent areas. “I certainly think we should do those things,” Klein says. “The problem is it takes a long time, it’s very expensive, and . . . what do we do for those people [without a car] while we’re building up transit capacity, while we’re building up biking and walking?” Subsidizing cars for low-income families, he says, could bridge that gap.
Driving is already highly subsidized across the country. We build cheap—often free—areas for parking, we invest in highways, drivers don’t pay for congestion or CO2 emissions, and zoning laws and taxes favor sprawl. “We have this very unequal landscape where people without cars face a lot of challenges to get around,” he says. Some nonprofits and local programs are leveling the playing field. Vehicles for Change is one; others, such as 1-800-Charity Cars or Cars 4 Christmas, give vehicles away for free. Klein noted that the government offers substantial incentives for buying electric vehicles but not for e-bikes, and subsidizing the latter could also benefit people closer to or within cities. There are programs in California that subsidize repairs for cars that wouldn’t pass a smog test or help people completely replace their older, polluting vehicles with a hybrid or electric car.
These programs seem to run counter to efforts to reduce our dependence on cars, but to Klein, it’s not fair to critique efforts that help a small number of low-income households while hundreds of thousands of people buy cars, including trucks and other high-polluting vehicles, every year. In 2019, Americans bought 17 million new vehicles in 2019. Only about 2% of that total—some 330,000 vehicles—were electric.
Low-income Americans will also continue to buy cars, whether or not they’re subsidized. According to his research, of the 30 people who received cars from Vehicles for Change, 25 had owned at least one car previously, and the median interviewee had owned three cars in their lifetime. People went through multiple cars because they couldn’t afford necessary repairs or because of other financial difficulties. One woman had bought seven “inexpensive and unreliable cars” over 11 years; another had bought a minivan on Craigslist that “only lasted a few weeks.”
By combining car subsidies with those programs that help repair or replace less-efficient vehicles, low-income families could have access to better jobs and a higher quality of life and could actually purchase fewer old, highly polluting vehicles. When we consider how people get around, it’s often framed as a choice between cars on one side and transit, biking, and walking on the other—but it’s not an either-or, Klein says.
“What’s the alternative if we don’t subsidize car ownership and people aren’t able to access safe ways of buying cars?” Klein asks. “I think for a lot of people, they’re going to venture into the used-car market, which is not nearly regulated enough, and they’re going to buy cheap cars that aren’t going to last as long. That’s not a good outcome.”