Many businesses sell durable consumer goods like refrigerators, TVs, cars, and the like on installments. In such transactions, an agreement between the buyer and seller is drawn. Sales finance companies deal in buying these contracts. As a result, the seller immediately gets his payment, the buyer continues to pay on installments, and the sales finance companies receive interest income resultant from the installment sales.
According to the contract between the seller and buyer, the title of ownership to the goods remains with the seller until the buyer makes full payment of the product. After the contract is purchased the sales finance company assumes the title of ownership to the goods sold. If the customer fails to make his payment the sales finance company will repossess the product in case the company finds it impossible to repossess the article, it will prefer to the original seller for the recovery of the loss. Sales Finance Company. |
| Sales finance companies have flourished the installment sales business. They also buy the contracts of installment sales to business firms that buy machinery and equipment. |
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