Vermont wants to help low-income residents buy fuel-efficient cars
A pandemic-delayed incentive program offers rebates on fuel-efficient vehicles, but it’s been a tough sell so far.
A new initiative to help low-income Vermonters buy fuel-efficient cars has struggled to kick into high gear during the pandemic.
The MileageSmart pilot program has been adopted as part of Vermont’s Transport Legislation 2019 and was awarded $750,000 by the state transportation agency. Eligible applicants can receive 25% off the cost, up to $5,000, for a high-efficiency used car, regardless of fuel type. It is one of several programs in the region that aims to help low-income residents access cleaner transport despite the often high costs of new electric vehicles.
The program had a soft launch in February, but halted amid the coronavirus outbreak and was restarted in early September. As of Oct. 1, one car had been sold through the program, but an administrator said several hundred people inquired about the program.
Buying a car was already a challenge for low-income households, and that has been exacerbated by the pandemic. Now administrators are determining next steps not only to reach customers, but also to help them navigate the process of getting loans and buying vehicles.
“We’re just kicking this stuff off,” said Paul Zabriskie, director of efficiency programs at Capstone Community Action, the central Vermont agency that administers MileageSmart. Capstone is working with the other four community action agencies in Vermont to market the program statewide.
“The first people we reach out to are those who need it the most.” They’re also the least likely to say, “Oh yeah, I wasn’t going to get a car, but now I’m going to get one this week,” Zabriskie said. “So we’re learning what we can do to make that process easier.”
Even with the incentive, most people served by Capstone would need to finance the purchase of a vehicle like this through a loan, he said. “We also know that many of the people we work with have never had good experiences with banks”, which they often see as predatory – for example, charging high fees to customers who fail to maintain their current account balances.
Adding to these challenges are an already faltering economy now threatened by a new wave of coronavirus infections and accompanying business closures, and a used-car market that has become more volatile during the pandemic. Zabriskie said a Capstone customer was looking at a used car that was worth $6,200 in June and by September had risen almost 15%, to $7,100.
The MileageSmart website has been put in place to streamline the process for customers. They can watch a video explaining the long-term financial and environmental benefits of fuel-efficient cars and see the list of eligible vehicles, which includes those with the equivalent of 40 mpg or more. They are encouraged to apply for their loan before buying a car in order to have a clear idea of their budget.
But many people seem to need more help managing vehicle loans and purchases. For organizations like Capstone operating with limited funding, this requires more strategy. Zabriskie said it’s still too early to tell what their next steps will be, but they’re trying to figure out how to continue effectively.
“We are responding to a social climate unlike anything I have ever seen, between the COVID-induced uncertainty and the level of background anxiety around November and the election,” he said. noted, the factors affect everyone, not just Capstone’s customers.
Customers “are enticed by our offering, which is a significant offering…and at the same time, it’s just a really scary thought to make commitments in this environment,” he said.
A step towards electrification
Proponents say that while it’s not perfect, MileageSmart is a start. Vermont policy so far has focused on electric vehicle incentives for new cars. This program aims to help residents who cannot afford new electric vehicles, many of whom continue to commute during the pandemic and do not have access to reliable public transit. Going forward, as the current crop of new, higher-mileage all-electric vehicles trickle down to dealerships, this program could help open up a local market for them.
The program also gives lawmakers a chance to gauge its success and value, so they can determine how to structure future iterations.
“I’m very excited about this program,” said Rep. Sarah Copeland Hanzas, who represents part of Vermont’s central Orange County in the state Legislature. Copeland Hanzas added that a program like this for low- and middle-income families has been a long-time need. She compared it to the “cash for clunkers” program launched at the end of the Great Recession to offer financial incentives to drivers to trade in their old cars for new fuel-efficient ones. Copeland Hanzas sees MileageSmart as “the next climate-friendly phase” of this concept.
“Is $5,000 enough? Probably not,” she said. “But I think of this as a pilot program. We can see how this plays out.
If it turns out that the incentive isn’t enough, she said, “then we as policymakers have to come back” and rethink that.
“We definitely have a lot of families that have been impacted by the pandemic,” she said of her district. “We are a rural community and we don’t have many options for public transit. She hopes service industry workers who have to commute to work will be able to take advantage of the program.
She acknowledged that this hasn’t been a top priority for her lately, especially as she focuses on the upcoming election. But she added that many of her constituents want to reduce their carbon footprint, which they might be interested in.
“As an advocate for vehicle electrification…I am constantly told that electric vehicles are only for the wealthy,” said Robb Kidd, conservation program manager at the Vermont chapter of the Sierra Club. He sees this as an opportunity to change the way people access electric vehicles. Even if they can’t get all-electric cars, they can at least get hybrids, he said, “so it’s like a step towards integrating them into more efficient vehicles.”
As for the effectiveness of the incentive, “I wish we had enough resources to allow everyone with marginal incomes access to free transport,” he said.
“For many low-income people whose main income is spent on transportation, if their car breaks down and they have to go out and buy a vehicle, a $5,000 incentive… can be a big help,” Kidd said. “Not everyone will be able to afford it…but it can help.”
In the long term, he said, the electrification of transport will be important, thanks to incentives and increased access to charging, as well as more options for public transport and micro -transportation. But MileageSmart, he said, is “an important transitional piece.”