Dealers typically prefer to sell your contract to another creditor, such as a bank, finance company or credit union. That way they get paid for the vehicle right away, instead of having to wait for you to make all of your payments. When this happens, the dealership will submit your credit application to one or more of these potential creditors to determine their willingness to purchase your contract.

When your contract is sold, remember it is a normal business practice for the dealer to retain some portion of the finance charge as income for the dealership. This income compensates the dealer for the time and resources needed to handle credit transactions.

Most vehicle manufacturers have their own companies to help dealerships extend financing.

• General Motors dealers, for example, often sell their contracts to GMAC, which then becomes the creditor on your account

The creditor will hold a lien on the vehicle's title (and often the title itself) until you have made all the agreed-upon payments. As with getting a loan on your own, if you don't make the agreed-upon payments to the creditor, they can repossess the vehicle and sell it.