It sounds like you have high empathy. That’s generally a positive thing unless others are able to use it against you. High empathy people care a great deal about the happiness of those around them, but caring about the happiness of someone out to take advantage of you like a car salesman can work against you.
When it motivates you to do something that enables self-destructive behavior and/or reinforces a psychology of dependence. There is an old Confucian saying: “Give a man a fish, feed him for a day, teach a man to fish, feed him for life.” If the root cause (lack of marketable skills, drug addiction, mental illness, etc…) isn’t addressed, and you feed him long enough that it turns into an expectation, then getting him to stand upon his own two feet will be harder, not easier, because he’s become dependent upon your generosity and has even less motivation to improve his situation then he did before. Furthermore his gratitude for all your help will pale in comparison to his anger at your refusal to bear the burden of supporting him for the rest of his life.
So it’s not that compassion is bad per say, it’s more an issue of how that compassion causes you to respond. Buying a barefoot homeless person a new pair of shoes will do no good if they sell them for drugs an hour later. And feeding someone every day can foster dependence and create a sense of entitlement unless the root cause of that hunger is also addressed. A bit of insight is needed to go along with that compassion so that the limited amount of help you are able to provide actually makes a meaningful difference.