Margaret Chase Smith Policy Center

Published: 2021

Publication Name:

Publication URL: https://digitalcommons.library.umaine.edu/mcspc_transport/8/

Abstract:

Credit enhancements are a necessary, but not sufficient policy tool to expand access to clean, reliable vehicles. They are necessary because lower-income and historically disadvantaged groups have less access to low-cost financing. They are not sufficient in that credit enhancements alone, while helpful, are not likely to substantially increase the purchase of clean, reliable vehicles with a higher initial purchase price, but comparable or lower long-term cost of ownership. We review two credit enhancement mechanisms: loan loss reserves and interest rate buy-downs.