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What is a retail installment sales contract or agreement?

A retail installment sales contract is a type of financing agreement. It is made directly between you and the auto dealer. The dealer will typically sell the contract to another lender unless the dealer is a buy-here/pay-here dealer.

Traditional vehicle financing involves borrowing money from a bank or other lender. In contrast, a retail installment sales agreement is when you borrow directly from the auto dealer. These dealers typically sell the retail installment sales contract to a bank, credit union or other lender. However, a buy-here/pay-here dealer, will keep the contract.

See different ways to get an auto loan

You have several options to consider when buying a new car or getting an auto loan. Learn how they can affect your overall money picture.

Read more about the ways to finance your loan