Dallas could partner in backing car loans for low-income residents in a plan endorsed Monday by a City Council committee.
The program suggests people with credit scores of 525 buying three-year-old $15,000 used cars could get 9.75-percent interest, saving about $150 a month compared to the much higher interest rates typically available for such a transaction in for-profit lending. Extended warranties are included in the deals.
The Dallas non-profit group "On The Road Lending" has issued about 50 loans so far, according to founder Michelle Corson. It wants to issue around 1,000 more with city backed "green bonds."
So-called "green bonds" are aimed at programs that reduce pollution, and replacing old cars could also improve air quality, said Corson.
A report for the Dallas mayor recently detailed a growing income disparity in Dallas between rich and poor and identified transportation as a roadblock to wealth.
"We're asking the city to partner with us to solve the problem of poverty in our community that's brought on by lack of transportation," Corson said.
Some good jobs are not well served by public transit or require long transfers.
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At the Dallas West End Transfer Center Monday, DART rider Taressa Lincoln said she is saving for a car now.
"Just to get a decent, cash car, to get from point A to point B, get to school, get somewhere in a decent amount of time," Lincoln said.
Members of the Dallas City Council Budget and Finance Committee Monday said they support the idea of helping more people get new cars.
"I think this is another check box, something that can help people, and the idea is to take away the barriers of employment and mobility and particularly upward mobility," said Councilman Rickey Callahan.
But the council members worried the plan could compromise Dallas borrowing capacity with many other needs like streets and old buildings already in line for bond money.
"I would have to think deeply as to whether I want to pursue that because they have a lot of infrastructure needs that the city of Dallas is depending on building out in the next couple of years," said Councilman Lee Kleinman.
The committee voted to have city staff research whether it would compromise other borrowing and comply with state law.
Corson said the car buyers would repay the money. She said just one of the 50 loans issued so far has defaulted.
Car dealer Don Herring Jr., with Don Herring Mistubishi, said buyers with a 525 credit score could pay twice as much as 9.75-percent interest.
"So certainly it's a good deal for them. From my perspective, it helps me sell a car. So, it's a good deal for both of us. It's very interesting," Herring said. "I don't know if 1,000 cars makes a huge dent, either in poverty or car sales in the city. But from my perspective, I like it. I would welcome it."
DART rider Taressa Lincoln said she hopes city hall goes through with the plan.
"If Dallas was able to do that program, I would greatly appreciate it, because I would be one of the people that would go for it," she said.
