I know someone who had a buy here pay here lot. The down payment most of the time covered what he had in a car. On average people will have no issue making the first couple of payments. When they missed one he repossessed the vehicle and sold it again for pure profit. I could go into more detail of how low he was going. But think I need to. At 16 I quit working for him for his business ethics.
As far as the upside down part. We got hit hard when my wife's car was totaled a few years ago. We just paid it out of pocket and went on. We didn't need to but we did. If he wasn't at fault he could lean on their insurance company to get it done. Or the individual. We were super screwed. My wife hadn't had her car 6months when it was totaled.