The scenario describes dealerships that specialize in providing vehicle financing options to individuals with poor or limited credit histories. These businesses often offer in-house financing, meaning they lend money directly to the customer rather than relying on traditional banks or credit unions. Interest rates are typically higher at these establishments to compensate for the increased risk associated with lending to individuals with compromised credit.
This particular segment of the automotive industry fulfills a crucial need by enabling individuals who might otherwise be unable to secure transportation to purchase a vehicle. It provides opportunities for credit rehabilitation and allows people to maintain employment and meet essential daily needs. Historically, this market emerged to address the growing demand from consumers underserved by conventional lending institutions.
