Different Finance Companies for Different Purposes(2)

Sales finance companies make indirect loans to consumers by purchasing installment paper from dealers selling automobiles and other durables. Many of these firms are "captive" finance companies controlled by a dealer or manufacturer. their principal function is to promote sales of the sponsoring firm‘s goods and services providing by credit. Companies having finance affiliates include General Electric, Motorola, Sears, wards, and International Harvester. Generally, sales, finance companies will specify in advance to retail dealers the terms (i.e., maturities, minimum down payments, and finance charges) of installment contracts they are willing to accept. Frequently they will give the retail dealers a supply of contract forms which the dealers will fill out when the sale is made. The contract is then sold immediately to the finance company.