*Since Santa didn’t bring me a new car for Christmas and I don’t want to pay for one myself, last weekend I went to an auto auction to learn how the game works. I’ve been told you can get quality vehicles at wholesale prices.
Some cars sold for under $1,000. Others sold for as much as $5,000. Regardless, the purchase price was cheap enough that buyers could save themselves a ton of money they normally might spend paying retail. Or they could sell the car on the back-end and triple their profit after just a minimum amount spent on maintenance and registration fees. That’s where most car dealerships get their selection of used vehicles. Unless you’re into shiny things and like spending money on a car that’s been marked up at least 300 percent, why would anyone pay $20,000 for something that costs less than a few thousand to build? And let’s not forget about interest fees.
Every year there’s a new study that comes out confirming what poor people already know: In America it costs more money to be poor. For the sake of this conversation, being “poor” means your income – probably hourly and at or near minimum wage – is barely enough to pay monthly necessities such as food and utilities.
And although a vehicle might seem to be a luxury item, poor people often need a car for transportation to and from work, because they are relegated to work shifts that make it hard for them to rely on public transportation. In addition to the monthly expense of a car note, statistics show low-income car buyers pay at least two percent (two thousand dollars) more than high-income car buyers for the same car because poor people have lower credit scores. So if poor people get the car at all they are charged more for that privilege. Insurance is another expense that can cost more based on one’s credit score. The price of gas and general maintenance is just plain high no matter who’s paying for it.
In early January I rented a vehicle to get to work because my car was in the shop for the umpteenth time, which is why I need a new one – but I digress. Anyway, I rent through Hotwire.com, a site that requires payment upfront in exchange for better rates on hotels and rentals cars. No, this is not a commercial. Anyway, I pre-paid for the rental car using my debit card. But when I went to get the car I was told that I had to pass a “soft credit check” to use a debit card, even though I already had pre-paid for the rental car. When I didn’t pass the “soft credit check” Hertz refused to give me the car that was already pre-paid. People who pre-pay with credit cards don’t have to pass a “soft credit check.” But I don’t use credit cards for the same reasons most people don’t: to avoid interest fees, and to be more conscious of my spending by paying cash as I go. In essence, I was being punished for being a good steward of my money and having a low credit score.
Nobody at Hertz could explain what a “soft credit check” entailed. And when I called Hotwire to complain they wanted to get me another rental car at a company that accepted debit cards, but for double what I had paid at Hertz. I refused and got a refund instead.
From banks that charge fees for not keeping a minimum amount of money in your account to neighborhood grocers that charge more for food because they can due to no competition, poor people are underpaid and over charged at every turn. I feel the pinch and I’m not a low-income earner. It was Rev. Ike who said the best thing you can do for the poor is not to be one of them. For me, that means to save more money, never use my money when somebody else’s money is available and never pay retail again.
Steffanie is a freelance journalist living in the Dallas, Texas metroplex. Email her at [email protected] for questions, comments or speaking inquiries.