Keith Whann, counsel for the National Independent Automobile Dealers Association, said buy-here, pay-here plays a vital role in getting people back to work and keeping them employed.
"If you want to get the economy growing, people need access to affordable transportation," Whann said.
Of course, critics say dealers lock consumers into contracts doomed to failure and then repossess the vehicle for resale.
Consumers fall into this trap because they're desperate and ignorant, the story goes.
But Melinda Zabritski of Experian Automotive said her company's analysis found buy-here, pay-here attracted better vehicles and better customers than many believe.
Only 8 percent of the cars in the buy-here, pay-here deals Experian looked at had major issues reported in AutoCheck vehicle history reports.
That's higher than traditional used-car sales, but half of the rate for cash sales.
Most buy-here, pay-here customers are locked out of the traditional market due to their low credit scores, Zabritski said.
Most, but not all. She said about 6 percent of the customers who buy from buy-here, pay-here dealers actually have prime credit.
These customers keep shopping at buy-here, pay-here stores because they like the service.
"Imagine that, people actually buy cars from people they trust," Whann said.
The number of prime credit customers at buy-here, pay-here stores also shows they're making a smart decision.
"These are not ill-informed customers," Zabritski said.
In fact, about a third of them have college degrees.
Some perceptions hold up.
Minorities and the working poor make up most of the customer segment. Many are single mothers.
In many cases they rent, but a sizable portion own their homes. Most rent because they're younger than the general population.
So, there is potential to grow with customers as their credit improves.
"People aren't born with bad credit," Whann said. "They're born with no credit and then things happen."
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