There's a certain segment of the used vehicle market where buyers have no money and such lousy credit that all they care about is getting some lender to finance a car purchase. They apparently aren't swayed by the car being priced way above its value. They only want to get the car financed.
Once they get the car loan, the next step is for them to file chapter 13 to knock down their 20%+ subprime car loan interest rate to prime rate, say 4.25% and their monthly payment decreases as well. If the car lender doesn't object to them claiming prime rate in chapter 13, they get prime rate. If the lender objects, then they'll probably negotiate something like 5.25-5.75%. Then they have 5 years in chapter 13 to pay it off or if the car craps out or they wear it out, they walk off from it and don't complete their chapter 13 plan.
Then they go on the hunt for another car loan and repeat the process once they find another car lender.
A guy I worked with who used to manage one of these subprime lenders said the lenders make a lot of these loans hoping that overall, they will collect enough of the 20%+ per cent interest loans that they "out run their losses." His words.
The dealerships themselves aren't taking the risk. They price the car as high as they can and then sell the loan to a subprime lender without recourse meaning that the subprime lender will only look to the car buyer for payment. The subprime lenders are willing to take some losses on known bad risk customers in order to get the car loans that might actually pay out so they make money overall even though they know they have some bad loans that won't pay out.
So when you see a dealer advertising a bunch of vehicles with "WE FINANCE" and the only information is the estimated monthly payment, not the total price, not the mileage, not the condition, this is why.
