Myth: Refugees get free cars explained; not free, but taxpayer subsidized

Update November 5:  A reader tells us there is a way for refugees to get cars free (besides the IDA method below).  If others of you have more information on how these ‘deals’ work, please let us know:

The most common route to a “free car” is through the Match Grant program – and yes this does provide a free used car to the refugee and cash to the contractor. The way it works is john Q public (or a dealer) donates his car to the Match Grant program. The contractor (Volag) gives the car to the refugee and, at the same time, presents a bill to the ORR Match Grant program . ORR Match Grant pays cash to the contractor (Volag) for 90% of the claimed value of the donated car. I am not exactly sure of the 90% – it is always changing and always getting better and better for the contractor (Volag).By now it could 100% of the claimed value. At any rate, the U.S. treasury takes 2 hits: one for the guy who writes off the donation on this tax returns and one for the pay out to the contractor (Volag).

One more mention of North Dakota and then I have to do a  whole bunch of other things (I expect posting may be sporadic in the coming days).

Close up shot of Uncle Sam holding pink piggy bank
Yes, the federal government runs a piggy bank for refugees and cars are one of the permitted goals for the special savings account. The resettlement contractors manage the money.

When we told you about the myth-buster meeting in Fargo earlier this morning, here, one line in the news account jumped out at me (one of several), but I want to tell you a bit about this one:

She added that refugees are not given free cars. “They get, at most, a four-month bus pass,” she said.

For years I’ve been seeing the “free cars” line.  There really is an explanation to it, but because whoever asked about it at the meeting probably didn’t ask the right question that allowed Ms. Thomasson to dismiss it as she did.

In fact, the Office of Refugee Resettlement has a special grant program called ‘Individual Development Accounts (IDAs).

We told you about it here recently (sorry for daily readers that we have to go over these things, but on some days we have a couple thousand new readers who have never been here before, so we have to repeat information).
For every dollar the refugee saves for one of 4 possible savings goals, you, the federal taxpayer match them a dollar.  This whole program is managed through resettlement contractors like Lutheran Social Services.
Here is the gist of the program:

Individual Development Accounts (IDA) are matched savings accounts designed to help refugees save for a specific purchase. Under the IDA program, the matching funds, together with the refugee’s own savings from their employment, are available for purchasing one (or more) of four savings goals:

Home purchase
Small business development
Post secondary education or training
Automobile (for employment purposes)
Public or private non-profit organizations administer IDA programming.


IDA grantees provide matched savings accounts to refugees whose annual income is less than 200 percent of the poverty level and whose assets, exclusive of a personal residence and one vehicle, are less than $10,000. Grantees provide matches of up to $1 for every $1 deposited by a refugee in a savings account. The total match amount provided may not exceed $2,000 for individuals or $4,000 for households. Upon enrolling in an IDA program, a refugee signs a savings plan agreement which specifies the savings goal, the match rate, and the amount the refugee will save each month.

I must mention that there was a time when Catholic Charities was taking donations of used cars and there were some stories about cars going to refugees that way, but I haven’t heard of it in recent years.
I am guessing that the “free cars” claim is based on the IDAs.
If the question had been asked in this way: “Do refugees get car purchases subsidized through federal grants?” I would hope Ms. Thomasson would explain the program.
Incidentally, you can imagine that when word gets out in communities that refugees are getting ‘goodies’ like this and the average low-income American isn’t getting these special deals, some tension likely builds in the community.

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