The Problem:
The paradox of car ownership
For the more than 50 million low-income households in the U.S., cars are a lifeline. Researchers have consistently found that having a car leads to better economic outcomes - keeping a job, getting a better job, leaving a welfare program, moving to a better neighborhood and more.
But for other low-income households, the costs that come with a car traps them at the bottom of the economic ladder. When you live paycheck-to-paycheck, fuel, regular maintenance, like oil changes and new tires, and costly unexpected repairs, like a failing transmission or faulty fuel pump, add up to a crushing financial burden.
“You need the car to pay the rest of the bills. You can’t go without the car.”
— Mike,
The Cause:
Budget-busting, gas-guzzling, clunkers
What’s behind this paradox? Too often low-income families are stuck driving old and unreliable gas-guzzlers that cost them more to fuel and maintain. A 2023 study of (used) car owners with household incomes below $40,000 found that 59% bought their cars for less than $10,000 and 36% said their cars were more than 10 years old when purchased.
Among the bottom 40% of households in the U.S. those who own or lease at least one vehicle spend 2.5x more of their income on transportation than the wealthiest households. Argonne National Laboratory attributed these higher transportation costs to vehicle fuel efficiency and concluded that the adoption of more fuel-efficient vehicles could have the biggest impact on lowering costs.
“I live paycheck to paycheck…If I have to do something with my car, something else isn’t going to get paid.”
— Krystal, 37 year-old single mother