When West Dallas resident Kimbely Rankin learned that her eldest child, Brian, 13, was offered a scholarship spot at the Covenant School in North Dallas last year, she didn’t know what to do.
She didn’t have a car and it would have taken Brian more than an hour to get to school riding DART, and even then he still would have been late to class.
Brian’s mentor through Mercy Street Doug Dixon, of University Park, referred Kimbely to On The Road Lending. Through the program, she was able to receive an affordable car loan and purchase a 2013 Ford Focus. This has allowed her to get Brian to his new school and substantially reduce her morning commute.
“… If there’s an emergency with my children, I’m able to just jump in the car and go, versus trying to call someone to come pick me up or trying to get there on the bus,” Rankin said.
According to a study by the Brookings Institute in 2010, only 14.7 percent of jobs in Dallas are accessible by public transit within a 90-minute commute.
“We’re so spread out; our geography is just such that it’s really difficult to function without [a vehicle],” said On The Road founder Michelle Corson.
And yet a 2014 American Community Survey showed that 68,074 out of 891,554 households in Dallas County don’t have a vehicle; about eight percent.
About 80 percent of On the Road loan applicants are women, and the majority are single moms. Many have been referred by groups such as The Family Place, Genesis Women’s Shelter, Salvation Army, Goodwill, and Habitat for Humanity, Corson says.
Most of the loans have a five-year term with a 9.75 percent interest rate, which may seem high, but Corson points out that most of the applicants have either poor credit or no credit. At the “We Finance: Buy Here, Pay Here” car lots, applicants were typically paying 22 percent, she said.
“We have clients that have had bankruptcies, and foreclosures, and auto repossessions, and prison time,” Corson said. “There’s nothing out there for them. But more importantly, when they go to a place like that, not only do they get a bad loan, they get a bad car generally.”
On the Road works with a network of dealerships, but about half of the cars have come from Toyota of Richardson, Corson said. They typically give clients two or three cars to choose from, most of which are three years old and have less than 30,000 miles, she said.
“They go and they test drive them and they decide, ‘I like this or I don’t,’” Corson said. “It’s got to be right for her family.”
Every client is required to participate in a finance class, during which they examine their finances with one of the staff to ensure the client has enough residual income to afford the average $275-per-month loan payment and is motivated to pay it off, Corson said. Clients then have to save to pay their title, tax, and license; provide references; and explain in a letter their history with money and cars. The idea is that the clients have “skin in the game,” Corson said.
“[The class] was helpful to my life period, because I’m the mother to three kids, and I need to know those skills,” Kimbely said. She hopes to have her loan paid off in three years, just in time for son’s high school graduation, she said.
Since 2013, Corson has helped put 50 families across Texas in cars.
“Low-income people can afford a car if you give them a really good car. And [Brian] is going to this school that’s going to change his life,” Corson said. “He couldn’t have done that if [his mom] hadn’t had a car.”