Buy Here Pay Here

If you've ever watched daytime TV, you know what this is. "We get anyone approved! $200 down and a job, and you drive away today!" The commercial might even include a Wacky Waving Inflatable Arm-Flailing Tubeman made so popular by Family Guy.

This is a car dealership that supports its own loans, rather than selling the loan to a bank.

Typically, this is a lot specializing in working with "credit-challenged" people that probably can't get a loan from a regular bank or credit union. Those with prior repossessions, foreclosures, low credit scores in general, those who can't easily prove their income (perhaps self-employed), or those who have short employment histories.

The advantage of these dealerships is convenience. You can walk in and leave with a car. But, like all things that sound too good to be true, there's a catch: the interest rates for these loans are substantially higher than those from regular lenders. Sometimes it's as high as legally allowed: 18 to 20%.

These dealerships are often viewed as being just a touch more consumer-friendly than payday lenders, but unless something drastic changes with credit requirements from more traditional lenders, we're guessing these dealerships and their tubemen will continue to be a market niche.