A New Mission Helping Low-Income Car Buyers

By Martha M. Hamilton

Many folks who are fortunate enough to have some financial flexibility view the end of one career as a chance to pursue what’s in their hearts or to develop new passions. Some do it through volunteering; others take jobs that wouldn’t have paid enough to support them when they were saving or sending kids to college. Still others, such as Robert Chambers, use their entrepreneurial skills to help others.

A Vietnam veteran and electrical engineer, Chambers, 62, runs a nonprofit group called Bonnie CLAC that helps low-income workers buy reliable cars while teaching them useful financial skills.

It’s a far cry from his initial venture, a company that built the first computer-communications line between Canada and the United States. Chambers helped create two other software companies, including one that assisted Dartmouth College in developing a wholly owned computer subsidiary. Then, after he sold his last business, he moved to New Hampshire and took a job as development director at Dartmouth, raising funds to build a medical center.

Once the capital campaign was completed, his job was over. Although he didn’t need to work for a living, he wanted a new undertaking. At a friend’s suggestion, he took up selling cars, which led him to a cause that would become his new career.

“The more I worked in the car industry, the more I got disgusted by how low-income individuals were being taken for a ride,” said Chambers, who spent a little more than four years in the car business. Dealers steer low-income customers to used cars, he said, because they make about $3,500 on a used car, compared with about $1,000 on a base model new car.

Used cars often aren’t a good deal for low-income buyers because they typically burn more gasoline, need repairs more often and are financed at higher interest rates. “The kind of culminating moment was when I saw the business manager and a salesman high-five each other because they made $5,000 off a poor person,” Chambers said.

The idea for Bonnie CLAC evolved during morning bike rides Chambers took with his friend Leo Hamill, who also worked at the dealership. They started looking for banks that would work with them, and it was an uphill struggle. But Chambers kept at it, approaching the presidents of banks, rather than lower-level officials, a lesson he learned in his for-profit career.

“We got the door slammed in our faces a bunch of times,” said Chambers.

Eventually, they found a regional bank in Vermont, Chittenden Bank, which agreed to provide lower interest rate loans to low-income buyers in return for the nonprofit group’s guarantee. Start-up money came from the Byrne Foundation, which supports charities in the Upper Valley area of Vermont and New Hampshire.

Chambers and Hamill launched Bonnie CLAC (CLAC stands for car loans and counseling) in 2001 and worked for a year without pay to get the organization up and running. They originally called it Fannie CLAC, meant to evoke Fannie Mae and its mission of helping more Americans get into housing, but Fannie Mae objected and the name was changed. Chambers says he likes the sound of “Bonnie CLAC.” “She’s a light, good person. An Irish lass,” he said. “And 75 percent of our clients are women.”

Over five years, Chambers has built Bonnie CLAC into an organization with 12 full-time and four part-time employees serving clients in New Hampshire, Vermont and Maine. (Hamill left Bonnie CLAC after the first year and went into real estate, though he remains on its board.) Working with three banks and several car dealerships, the organization has helped 830 people buy cars and learn to better handle their finances. Only about a dozen have defaulted, giving Bonnie CLAC a failure rate lower than the 3 percent average on commercial loans, according to Chambers.

Bonnie CLAC’s clients are referred to it by other nonprofit organizations that work with poor families and individuals. Clients pay $65 to participate, though there are scholarships that pay up to half of that amount. “If they don’t have some skin in the game,” clients aren’t as committed, Chambers said.