A single mother with two children, Ashlie Russell, 22, was working three jobs to make ends meet and depended on transportation from family members to get to work. Three months later, the Chelsea, Vt., woman held the keys to a shiny new Toyota Yaris.
Her purchase last January was thanks to a nonprofit organization created in 2001 by Robert Chambers, 65, in Lebanon, N.H. (pop. 12,568), to help working poor people improve their finances and eventually acquire affordable, reliable and fuel-efficient vehicles.
Chambers relishes lots of success stories like Russell’s, in stark contrast to the five years that he worked for a New Hampshire auto dealership and often saw lower-income customers steered toward clunkers and into loans with high interest rates and finance charges.
He finally got fed up while witnessing his sales manager and a fellow salesman high-fiving each other after unloading a lemon on a debt-laden single mom for a $5,000 profit. He knew the car would be in the junkyard or have significant mechanical problems long before she could pay off the five-year loan.
“Most people need a car to get and keep a decent job, and many have credit and debt problems,” Chambers says. “Used-car dealers prey on them, especially women, saddling them with junk cars that only bleed their finances further.”
Chambers, of Hanover, N.H., came to his car sales job after careers as an electrical engineer and professional fundraiser, and could have opted to retire comfortably after leaving the dealership. Instead, at age 57, he created Bonnie CLAC (Car Loans and Counseling) to keep working people from being taken for a ride by a system they don’t understand. Since 2001, the venture has put about 1,200 people mostly women, with no or poor credit histories in reliable transportation.
Before clients get the keys to a new car, however, Bonnie CLAC teaches people with poor credit to become “financially fit” through a six-week course on setting goals, budgeting, credit and smart shopping. “Beyond helping them acquire new cars, we’re focused on helping the working poor to build better lives,” Chambers says.
During that time, clients can receive temporary transportation by paying a monthly fee that helps them improve their credit records. Eventually, counselors help them purchase basic new cars that benefit both their pocketbook and the environment.
Bonnie CLAC works, Chambers says, because it guides clients through the process while giving them the bargaining clout of a group. “We partner with banks, dealers and the clients, who commit to learning how to build credit as they get their finances in order,” he says. “We accompany them through the car-buying process from the initial budget-and-credit analysis to the day they take delivery.”
Women, many of them single moms, make up more than 70 percent of Bonnie CLAC’s clientel a feature that helped draw CEO Terri Steingrebe to the organization in 2008. “Robert’s a true visionary and a truly good man,” says Steingrebe, 55. “So many have already benefited from the way he’s used his entrepreneurial experience and reputation in the business community to create this first-of-its-kind solution.”
The Bonnie CLAC solution helped Julie Atwood, 55, a divorced mother of five children in Stockbridge, Vt., to purchase a new Honda in 2005.
“I can’t even list all the good things that have happened in our lives because I have this car now,” says Atwood, who recently drove her youngest child on a tour of prospective colleges an opportunity she never imagined.
Bonnie CLAC now is headquartered in Claremont (pop. 13,151) and has six other locations in New Hampshire, as well as an office in Lowell, Mass.
Funded through grants and business partnerships, the organization charges clients a $68 enrollment fee and $895 at the time of auto purchase, which is folded into the car loan. “Their investment helps extend our services to others, and clients come out ahead because, by guaranteeing their loan and negotiating a good deal, we save them an average of $5,000,” Chambers says.
Of $13 million in loans extended since 2001, only $70,000 has resulted in default. “We get close and personal with clients’ budgets and circumstances, and are as transparent as possible about what we can do and what we expect from them,” Chambers says. “They gain a whole new view of themselves and of the possibilities in their lives.”
For his social innovation, Chambers and Bonnie CLAC were recognized in June at the White House, where he encouraged other retired baby boomers to make a difference. “I was old enough to understand the injustices I saw and experienced enough to be able to do something about it,” he says.