Transportation Spending by Low-Income California Households ...

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credit ratings, assisting with insurance costs, and tracking success. In addition, it suggests that JARC funding be used for car ownership programs, that TANF funding for car ownership programs be increased, and that asset value limits be raised. 22 A bill that has fairly recently been introduced to the California Assembly by Assemblywoman Cindy Montanez contains several items that may help keep purchase costs low for low-income households buying used vehicles. The provisions include • An official definition of certification for certified used cars, including a required inspection by a qualified technician; • A cooling off period, where buyers of used cars could return a vehicle after three days for a full refund; and • A requirement that car dealers disclose to buyers their credit scores and the lowest interest rate that they qualify for. The Assembly approved the bill on May 27, 2004, and the Senate will be considering it this summer. 23 Because the maintenance and repairs category was a sizable component of vehicle-related costs, constituting about 10 percent of annual vehicle expenditures for low-income households (Table 3.3), programs that support vehicle maintenance and repairs would be another reasonable way to facilitate vehicle ownership. TANF programs often help cover repair costs, and loan funds are often available for maintenance and repair costs as well as vehicle purchases. In addition, some TANF programs provide training in maintenance and repairs to their clients. If these classes are found to be beneficial, such training could be extended to a broader audience of low-income car owners, perhaps by providing free or reduced-price classes at community colleges or community centers. _____________ 22 Hayden and Mauldin (2002). 23 Note that California’s Lemon Law covers only new cars or used cars that are still under warranty. 116
Targeting Insurance Costs Insurance costs were found to amount to 15 percent of annual vehicle expenditures (Table 3.3). Some programs for welfare recipients seek to link participants with insurance companies that charge reasonably low rates, but such programs seem relatively rare. The California Low Cost Automobile Insurance Program (LCA) is a pilot program available only to residents of San Francisco and Los Angeles Counties. 24 This program officially began in 2000, and the pilot program is schedule to continue until January 1, 2007. The program is administered by the California Automobile Assigned Risk Plan, or CAARP. In the first few years of implementation, policies did not sell very well. In efforts to boost participation, rates were lowered (from $410 to $314 for San Francisco County), the eligibility level was raised from 150 percent to 250 percent of the federal poverty threshold, and a new payment option allowed participants to put down a deposit of 15 percent of the total premium, followed by six monthly installments. In addition, the option to buy additional uninsured motorist bodily injury coverage and medical payments coverage was added. Between 2002 and 2003, the number of applications increased from 2,390 to 5,631. Depending on the success of the LCA program, it may be worthwhile to make the program permanent and extend it to the rest of the Bay Area counties and perhaps throughout the state. Another option for the program would be to have the insurance be publicly subsidized. Litman (1997) advocates tying insurance rates more closely to the distance driven. This could be implemented through “mileage-pricing,” by “pay-at-the-pump measures,” or by increasing the distance weights that are already used by insurance companies, but Litman considers mileage-pricing to be the most equitable of the three strategies. “The strategies should benefit most lower-income vehicle owners, who tend to drive less than wealthier vehicle owners” (p. 132). Progressive Casualty Insurance Company (the nation’s fourth-largest insurance company) ran a mileage-based pilot program in Texas from 1998 to 2000, using GPS to measure vehicle mileage. Participants in Progressive’s Autograph program were reported to have saved 25 percent compared to what they _____________ 24 Low (2002). 117
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Transportation Spending by Low-Inco
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Foreword Mismatches between jobs an
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Summary Transportation is an import
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Table S.1 Median Annual Transportat
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about 5 to 10 percent of the median
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providing discounted transit fares
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5. COMMUTE BEHAVIOR IN THE BAY AREA
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Figures S.1. Vehicle Ownership and
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4.3. Costs of Illustrative Within-C
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1. Introduction Costs associated wi
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of “welfare-to-work” transporta
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lays out policy options for address
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2. Data and Methods In this report,
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advantage to this approach is that
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3. Transportation Expenditures in M
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Table 3.2 Vehicle Use, Vehicle Owne
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Components of Vehicle-Related Expen
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inspection, and auto club membershi
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income households and the higher-in
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eport looks primarily at cost and n
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The results from Table 3.5 indicate
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variation in transportation costs w
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overall household expenditures for
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31 Table 3.9 Transportation Expendi
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Table 3.10 Comparison of California
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Table 3.11 Comparison of the San Fr
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Table 3.10 have lower expenditure f
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4. Costs of Illustrative Bay Area C
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0-300 301-600 601-1100 1101-6813 Ba
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Table 4.2 Place of Work Comparison
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Concord CONTRA COSTA SAN FRANCISCO
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Administration (FHWA) mileage rate
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49 Table 4.3 Costs of Illustrative
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participants who took transit or ca
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Table 4.4 Costs of Illustrative Wit
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commutes is $4,240, whereas the hig
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The results from this chapter seem
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5. Commute Behavior in the Bay Area
Page 87 and 88: We also looked at mode choice using
Page 89 and 90: longer for higher-income workers if
Page 91 and 92: Table 5.3 (continued) Low- Income H
Page 93 and 94: Table 5.5 depicts the share of the
Page 95 and 96: 73 Table 5.6 Mode Choice and Vehicl
Page 97 and 98: 75 Table 5.8 Mode Choice and Vehicl
Page 99 and 100: households report having access to
Page 101 and 102: Table 5.9 (continued) % Using Each
Page 103 and 104: • Marin to San Francisco: As with
Page 105 and 106: Table 5.10 Median Commute Durations
Page 107 and 108: 85 Table 5.11 Differences in Mode C
Page 109 and 110: Table 5.13 Mode Choice, Work Schedu
Page 111: trips, make more household-supporti
Page 114 and 115: only expenditures. Paying a given n
Page 116 and 117: improving service quality rather th
Page 119: Part II Policy Strategies and Areas
Page 122 and 123: potential social costs such as poll
Page 124 and 125: • Increasing income directly, to
Page 126 and 127: grants for developments that meet c
Page 128 and 129: make it easier for various entities
Page 130 and 131: pass.” 10 Perhaps discounts could
Page 132 and 133: free transit is most likely not app
Page 134 and 135: have fares based on the time of day
Page 136 and 137: hours for late night and graveyard
Page 140 and 141: would have paid with traditional au
Page 142 and 143: citizens. Rather, the question shou
Page 144 and 145: Facilitating Bicycling or Walking A
Page 146 and 147: transportation hubs may be another
Page 148 and 149: allowing flexibility at the local l
Page 150 and 151: services, health care, drug treatme
Page 152 and 153: costs. Efforts to incorporate infor
Page 154 and 155: are differences) and by looking at
Page 156 and 157: Dataset Poor Low-Income Higher-Inco
Page 158 and 159: income, problems common to most hou
Page 160 and 161: or the Bay Area specifically. We us
Page 163 and 164: Appendix B Information on Specific
Page 165 and 166: We also excluded expenditures on bi
Page 167 and 168: Atlanta: Atlanta, GA MSA Miami: Mia
Page 169 and 170: 147 Table B.1 (continued) CES Metro
Page 171 and 172: Appendix C Sensitivity Analysis for
Page 173 and 174: 151 Table C.1 (continued) Poor Low-
Page 175 and 176: transportation expenditures constit
Page 177 and 178: Appendix D Methods Used for the Exa
Page 179 and 180: Bibliography American Automobile As
Page 181 and 182: Implications of Welfare Reform for
Page 183 and 184: Lucas, M., and C. Nicholson, “Sub
Page 185 and 186: Progressive Casualty Insurance Comp
Page 187: About the Author LORIEN RICE Lorien
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