<PAGE>
 
                                                                  DRAFT 11/16/96



                         RECEIVABLES PURCHASE AGREEMENT


                                    between


                         THE ORIGINATORS LISTED ON THE
                        SIGNATURE PAGE ATTACHED HERETO,
                                   as Sellers

                                      and

                        RELIANCE ACCEPTANCE CORPORATION,
                                  as Purchaser


                   _________________________________________

                         Dated as of November 20, 1996
                   _________________________________________
<PAGE>
 
                         RECEIVABLES PURCHASE AGREEMENT

     RECEIVABLES PURCHASE AGREEMENT, dated as of November 20, 1996 ("this
Agreement"), between RELIANCE ACCEPTANCE CORPORATION, a Delaware corporation
("Reliance" or the "Purchaser"), RELIANCE ACCEPTANCE CORP. OF FLORIDA, a
Delaware corporation; RELIANCE ACCEPTANCE CORP. OF GEORGIA, a Delaware
corporation; RELIANCE ACCEPTANCE CORP. OF ILLINOIS, a Delaware corporation;
RELIANCE ACCEPTANCE CORP. OF INDIANA, a Delaware corporation; RELIANCE
ACCEPTANCE CORP. OF KENTUCKY, a Delaware corporation; RELIANCE ACCEPTANCE CORP.
OF MISSOURI, a Delaware corporation; RELIANCE ACCEPTANCE CORP. OF NEVADA, a
Delaware corporation; RELIANCE ACCEPTANCE CORP. OF NEW MEXICO, a Delaware
corporation; RELIANCE ACCEPTANCE CORP. OF NORTH CAROLINA, a Delaware
corporation; RELIANCE ACCEPTANCE CORP. OF OHIO, an Ohio corporation; RELIANCE
ACCEPTANCE CORP. OF SOUTH CAROLINA, a Delaware corporation; RELIANCE ACCEPTANCE
CORP. OF TENNESSEE, a Delaware corporation; and RELIANCE ACCEPTANCE CORP. OF
TEXAS, a Texas corporation (each of the foregoing entities, individually, a
"Seller", and, collectively, the "Sellers").

In consideration of the mutual agreements contained herein, the Purchaser and
the Sellers hereby agree as follows:

     Section 1.  Definitions.  Capitalized terms used herein without definition
shall have the meanings set forth in the Pooling and Servicing Agreement, dated
as of November 20, 1996 (as it may be amended or supplemented from time to time,
the "Pooling and Servicing Agreement"), between Reliance Auto Receivables
Corporation, as Issuer, Reliance, in its individual capacity and as Servicer,
and Harris Trust and Savings Bank, as Trustee and Backup Servicer.

     Section 2.  Conveyance of Receivables.  (a) Subject to the terms and
conditions of this Agreement, each Seller hereby sells, transfers, assigns and
otherwise conveys to the Purchaser, without recourse (but without limitation of
its obligations under this Agreement): (1) all of the right, title and interest
of such Seller in, to and under the Receivables that have been originated by
such Seller and identified on Schedule 1 and all monies paid or payable thereon
or in respect thereof on or after the Cutoff Date, including all Liquidation
Proceeds and recoveries received with respect to such Receivables; (2) the
security interests in the Financed Vehicles granted by Obligors pursuant to such
Receivables and any other interest of such Seller in the Financed Vehicles and
other property (including the right to receive future Liquidation Proceeds) that
secures any such Receivable and that has been acquired by or on behalf of such
Seller pursuant to the liquidation of any such Receivable; (3) the Insurance
Policies and any proceeds from any Insurance Policies relating to such
Receivables, the Obligors or the related Financed Vehicles, including rebates of
premiums, all Collateral Insurance and any Force-Placed Insurance relating to
such Receivables; (4) the rights of such Seller against Dealers with respect to
such Receivables 
<PAGE>
 
under the Dealer Agreements and the Dealer Assignments; (5) all items contained
in the Receivable Files related to such Receivables and any and all other
documents that such Seller keeps on file in accordance with its customary
procedures relating to such Receivables, the Obligors or the related Financed
Vehicles; and (6) all proceeds and investments of any of the foregoing, all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing
(collectively, the "Other Conveyed Property").

          (b) It is the intention of each Seller and the Purchaser that the
transfer and assignment contemplated by this Agreement shall constitute a sale
of the Receivables and Other Conveyed Property from such Seller to the Purchaser
and the beneficial interest in and title to the Receivables and the Other
Conveyed Property shall not be part of such Seller's estate in the event of the
filing of a bankruptcy petition by or against such Seller under any bankruptcy
law. If, notwithstanding the intent of such Seller or the Purchaser, the
transfer and assignment contemplated hereby is held not to be a sale, such
Seller hereby grants a first priority security interest to the Purchaser in the
Receivables and the Other Conveyed Property and this Agreement shall constitute
a security agreement.

          (c) In consideration for the Receivables and the Other Conveyed
Property sold to the Purchaser as described in Section 2(a), the Purchaser
shall, on the Closing Date, deliver to each Seller a Non-Negotiable Term Note in
the form attached as Exhibit A in an amount equal to the aggregate principal
balance as of the Cutoff Date for the Receivables being sold by each such
Seller.

          (d) The conveyance of the Receivables and the Other Conveyed Property
shall take place at a closing (the "Closing") at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois 60603 on the Closing Date.

     Section 3.  Representations and Warranties of Seller.  By its execution of
this Agreement, each Seller makes the following representations and warranties
on which the Purchaser relies in accepting the Receivables and the Other
Conveyed Property.  Unless otherwise specified, such representations and
warranties speak as of the Closing Date, but shall survive the sale, transfer
and assignment of the Receivables and the Other Conveyed Property to the
Purchaser.

          (a) Schedule of Representations.  The representations and warranties
set forth on the Schedule of Representations attached as Schedule 2 hereto are
true and correct in all material respects with respect to the Receivables being
sold by such Seller.

          (b) Organization and Good Standing.  Such Seller has been duly
organized and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with power and authority to own
its properties and to conduct its business as such

                                      -2-
<PAGE>
 
properties are currently owned and such business is currently conducted, and had
at all relevant times, and now has, the power and authority to (i) acquire, own,
sell and otherwise transfer the Receivables and the Other Conveyed Property to
the Purchaser and (ii) enter into and perform its obligations hereunder and
under the Related Documents to which such Seller is a party.

          (c) Due Qualification.  Such Seller is duly qualified to do business
as a foreign corporation in good standing and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so would
have a material adverse effect on (i) such Seller's ability to transfer the
Receivables and the Other Conveyed Property to the Purchaser pursuant to this
Agreement, (ii) the validity or enforceability of the Receivables and the Other
Conveyed Property being sold by such Seller or (iii) such Seller's ability to
perform its obligations hereunder and under the Related Documents to which such
Seller is a party.

          (d) Power and Authority.  Such Seller has the power and authority to
execute and deliver this Agreement and the Related Documents to which such
Seller is a party and to carry out its terms and their terms, respectively; such
Seller has power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to and deposited with the Purchaser by
it and has duly authorized such sale and assignment to and deposit with the
Purchaser by all necessary corporate action; and the execution, delivery and
performance of this Agreement and the Related Documents to which such Seller is
a party have been duly authorized by such Seller by all necessary corporate
action.

          (e) Valid Transfer; Binding Obligations.  This Agreement effects, as
of the Closing Date, a valid transfer and assignment of the Receivables and the
Other Conveyed Property from such Seller to the Purchaser enforceable against
such Seller and the creditors of and any purported purchasers from such Seller,
and this Agreement and the Related Documents to which such Seller is a party,
when duly executed and delivered by the other parties thereto, shall constitute
valid and binding obligations of such Seller enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

          (f) No Violation.  The execution, delivery and performance by such
Seller of this Agreement and the Related Documents to which such Seller is a
party, the consummation of the transactions contemplated hereby and thereby and
the fulfillment of the terms hereof and thereof do not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the articles of
incorporation or by-laws of such Seller, or any indenture, agreement, mortgage,
deed of trust or other instrument to which such Seller is a party or by which it
is bound, (ii) result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument or (iii) violate any law, order, rule or

                                      -3-
<PAGE>
 
regulation applicable to such Seller of any Governmental Authority having
jurisdiction over such Seller or any of its properties, other than such
conflicts, breaches, defaults, creation or imposition of Liens or violations
that do not have a material adverse effect on (i) such Seller's ability to
transfer the Receivables and the Other Conveyed Property to the Purchaser
pursuant to this Agreement, (ii) the validity or enforceability of the
Receivables and the Other Conveyed Property being sold by such Seller or (iii)
such Seller's ability to perform its obligations hereunder and under the Related
Documents to which Seller is a party.

          (g) No Proceedings.  There are no proceedings or investigations
pending or, to the best of such Seller's knowledge, threatened against such
Seller, before any Governmental Authority having jurisdiction over such Seller
or its properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or any of
the Related Documents, (iii) seeking any determination or ruling that would have
a material adverse effect on the performance by such Seller of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Related Documents or the validity or enforceability of the Receivables and the
Other Conveyed Property being sold by such Seller, or (iv) seeking to materially
and adversely affect the federal income tax or other federal, state or local tax
attributes of the Notes or seeking to impose any excise, franchise, transfer or
similar tax upon the Notes or the sale and assignment of the Receivables and
Other Conveyed Property being sold by such Seller hereunder.

          (h) No Consents.  No consent, approval, license, authorization or
order of, or declaration, registration or filing with, any Governmental
Authority or other Person is required to be made by such Seller in connection
with the execution, delivery or performance of this Agreement or the Related
Documents to which such Seller is a party or the consummation of the
transactions contemplated hereby or thereby, except such as have been duly made,
effected or obtained.

          (i) Chief Executive Office.  The chief executive office of such Seller
is located at 400 North Loop, 1604 East, Suite 210, San Antonio, Texas 78232.

          (j) Consummation of Transactions.  The transactions contemplated by
the Related Documents are being consummated by such Seller in furtherance of its
ordinary business purposes, with no contemplation of insolvency and with no
intent to hinder, delay or defraud any of its present or future creditors.

          (k) Consideration.  The consideration received by such Seller as set
forth herein is fair consideration having value reasonably equivalent to or in
excess of the value of the related Receivables and Other Conveyed Property and
the performance of such Seller's obligations hereunder.

                                      -4-
<PAGE>
 
          (l) Insolvency.  Neither on the date of the transactions contemplated
by the Related Documents or immediately before or after such transactions, nor
as a result of the transactions, will such Seller:

               (i) be insolvent such that the sum of its debts is greater than
     all of its respective property, at a fair valuation;

               (ii) be engaged in or about to engage in business or a
     transaction for which any property remaining with such Seller will be an
     unreasonably small capital or the remaining assets of such Seller will be
     unreasonably small in relation to its respective business or the
     transaction; and

               (iii) have intended to incur, or believed it would incur, debts
     that would be beyond its respective ability to pay as such debts mature or
     become due.  Such Seller's assets and cash flow enable it to meet its
     present obligations in the ordinary course of business as they become due.

          (m) Assets.  Both immediately before and after the transactions
contemplated by the Related Documents (i) the present fair salable value of such
Seller's assets was or will be in excess of the amount that will be required to
pay its probable liabilities as they then exist and as they become absolute and
matured; and (ii) the sum of such Seller's assets was or will be greater than
the sum of its debts, valuing its assets at a fair salable value.

     Section 4.  Repurchase of Receivables Upon Breach of Warranty.  Each Seller
hereby acknowledges that Reliance has assigned all of its right, title and
interest in, to and under this Agreement to the Issuer and the Issuer has
pledged such right, title and interest to the Trustee on behalf of the
Noteholders and the Note Insurer.  Each Seller hereby covenants and agrees with
Reliance for the benefit of Reliance, the Issuer, the Trustee and the Note
Insurer that, in the event that a breach of any of the representations and
warranties of such Seller contained in Section 3(a) shall cause Reliance to be
obligated under Section 2.4 of the Pooling and Servicing Agreement to repurchase
any Receivable as to which a breach has occurred, such Seller shall repurchase
each such Receivable repurchased by Reliance under Section 2.4 of the Pooling
and Servicing Agreement on the date and for the amount specified in Section 2.4
of the Pooling and Servicing Agreement.  The obligation of a Seller to
repurchase any Receivable as to which a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against such
Seller for such breach available to the Purchaser and any breaches of the
representations or warranties with respect to such Receivable shall be deemed
cured as of the date of such repurchase.

     Section 5.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts 

                                      -5-
<PAGE>
 
of laws thereof and the obligations, rights and remedies of the parties under
this Agreement shall be determined in accordance with such laws.

     Section 6.  Severability of Provisions.  If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.

     Section 7.  Assignment.  Notwithstanding anything to the contrary contained
in this Agreement, this Agreement may not be assigned by the Purchaser or any
Seller without the prior written consent of the Trustee and the Note Insurer (if
an Insurer Default shall not have occurred and be continuing).

     Section 8.  Counterparts.  This Agreement may be executed simultaneously in
any number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.

     Section 9.  Notices.  All demands, notices and communications under this
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Purchaser, at the following address: 400 North
Loop, 1604 East, Suite 210, San Antonio, Texas 78232, Telecopy No.: (210) 402-
0761, with a copy to James I. Kaplan, 980 North Michigan Avenue, 14th Floor,
Chicago, Illinois 60611, Telecopy No.: (312) 214-7683, (b) in the case of the
Sellers, at 400 North Loop, 1604 East, Suite 210, San Antonio, Texas 78232,
Telecopy No.: (210) 402-0761, with a copy to James I. Kaplan, 980 North Michigan
Avenue, 14th Floor, Chicago, Illinois 60611, Telecopy No.: (312) 214-7683, (c)
at such other address as shall be designated by any such party in a written
notice to the other parties.

     Section 10.  Successors and Assigns.  This Agreement shall be binding upon
the parties hereof and their respective successors and assigns, and shall inure
to the benefit of and be enforceable by the parties hereof and their respective
successors and assigns permitted hereunder.

     Section 11.  Nonpetition Covenant.  Until the date that is one year and one
day following the payment in full of all amounts due in respect of the Notes and
all amounts due under the Insurance Agreement, none of the parties hereto shall
petition or otherwise invoke, or join any other Person in petitioning or
invoking, the process of any Governmental Authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its respective property, or ordering the
winding up or liquidation of the affairs of the Issuer.

                                      -6-
<PAGE>
 
     Section 12.  Third-Party Beneficiaries.  The Note Insurer and the Trustee
for the benefit of the Noteholders shall be express third-party beneficiaries to
the provisions of this Agreement and shall be entitled to rely upon and directly
enforce such provisions of this Agreement. Except as set forth in the preceding
sentence, nothing in this Agreement, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder and
permitted assigns, any benefit or any legal or equitable right, remedy or claim
under this Agreement.

     Section 13.  Amendment.  This Agreement may be amended by the Sellers and
Reliance with the prior written consent of the Trustee and the Note Insurer (so
long as an Insurer Default shall not have occurred and be continuing); provided,
however, that if an Insurer Default shall have occurred and is continuing,
written consent of the Note Insurer shall be required unless such amendment
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee and
the Note Insurer, adversely affect in any material respect the interests of the
Note Insurer.

                                      -7-
<PAGE>
 
     IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed by their respective officers, effective as of the
day and year first above written.


                                        RELIANCE ACCEPTANCE CORPORATION,  
                                        as Purchaser


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF FLORIDA, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF GEORGIA, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF ILLINOIS, 
                                        as Seller



                                        By:  ___________________________________
                                             Name:
                                             Title:

                                      -8-
<PAGE>
 
                                        RELIANCE ACCEPTANCE CORP. OF INDIANA, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:



                                        RELIANCE ACCEPTANCE CORP. OF KENTUCKY, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:



                                        RELIANCE ACCEPTANCE CORP. OF MISSOURI, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF NEVADA, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:

                                      -9-
<PAGE>
 
                                        RELIANCE ACCEPTANCE CORP. OF 
                                        NEW MEXICO, as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF
                                        NORTH CAROLINA, as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF OHIO, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:



                                        RELIANCE ACCEPTANCE CORP. OF
                                        SOUTH CAROLINA, as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:

                                      -10-
<PAGE>
 
                                        RELIANCE ACCEPTANCE CORP. OF
                                        TENNESSEE, as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:


                                        RELIANCE ACCEPTANCE CORP. OF TEXAS, 
                                        as Seller


                                        By:  ___________________________________
                                             Name:
                                             Title:

                                      -11-
<PAGE>
 
                                   SCHEDULE 2

                   REPRESENTATIONS AND WARRANTIES OF SELLERS

     1.   Characteristics of Receivables.  Each Receivable:  (1) was originated
in the United States of America by a Dealer for the retail sale of a Financed
Vehicle in the ordinary course of such Dealer's business in accordance in all
material respects with Reliance's Credit and Collection Policy and such Dealer
had all necessary licenses and permits to originate Receivables in the state
where such Dealer was located; (2) was fully and properly executed by the
parties thereto; (3) was purchased by an Originator from such Dealer under an
existing Dealer Agreement or pursuant to a Dealer Assignment; (4) contains
customary and enforceable provisions such that the rights and remedies of the
holder or assignee thereof shall be adequate for realization against any
collateral security; (5) provides for level monthly payments in U.S. dollars
(provided that the period in the first Collection Period and the payment in the
final Collection Period of the Receivable may be minimally different from the
normal period and level payment), which, if made when due, shall fully amortize
the Amount Financed over the original term; (6) has not been amended, modified
or supplemented (including any extensions to such Receivable's original term)
and has not had collections with respect thereto waived; (7) had a remaining
maturity, as of the Cutoff Date, of not less than 6 months and not more than 59
months; (8) had an original maturity of not more than 60 months; (9) had a
remaining Principal Balance as of the Cutoff Date of at least $500 and not more
than $27,000; (10) had an Annual Percentage Rate of at least 12% and not more
than 25%; (11) was not more than 30 days past due as of the Cutoff Date; (12)
has a final scheduled payment date on or before September 30, 2001; (13) had at
least one Scheduled Payment made prior to the Cutoff Date; and (14) is a
Scheduled Interest Receivable.  As of its date of origination, no Receivable was
due from an Obligor who had defaulted under a previous contract with an
Originator.

     2.   Dealer Agreements and Assignments.  Each Receivable was originated by
a Dealer and was sold by the Dealer to an Originator, without any fraud or
misrepresentation on the part of such Dealer.  Each Dealer that originated a
Receivable for sale to an Originator has been selected based on Reliance's
underwriting criteria.  The Dealer Agreement or the Dealer Assignment
constitutes the entire agreement between the Dealer and the related Originator
with respect to the sale of the related Receivable to the Originator.  Each such
Dealer Agreement and each such Dealer Assignment is "without recourse" to the
related Dealer (other than warranty repurchases by such Dealer) and is in full
force and effect and is the legal, valid and binding obligation of such Dealer.
The Originator has paid the purchase price (as specified in the applicable
Dealer Agreement or Dealer Assignment) for each Receivable and owes no other
payment to such Dealer for such Receivable.

     3.   Compliance with Law.  All requirements of applicable federal, state
and local laws, and regulations thereunder (including usury laws, the Federal
Truth-in-Lending Act, the Equal 


                                      S-1
<PAGE>
 
Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act,
the Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations "B" and
"Z", the Soldiers' and Sailors' Civil Relief Act of 1940, each applicable state
Motor Vehicle Retail Installment Sales Act, and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code and other consumer
credit laws and equal credit opportunity and disclosure laws) in respect of the
Receivables and the Financed Vehicles, and any insurance or service contracts
sold in connection therewith, have been complied with in all material respects,
and each Receivable and the sale of the Financed Vehicle evidenced by each
Receivable complied at the time it was originated or made and now complies in
all material respects with all applicable legal requirements.

     4.   No Adverse Selection.  No selection procedures materially adverse to
Reliance, the Noteholders or the Note Insurer were utilized in selecting the
Receivables from similar receivables owned by the Originators on the Cutoff
Date.

     5.   Binding Obligation.  Each Receivable represents the legal, valid and
binding obligation of the Obligor thereon and is enforceable by the holder
thereof in accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law and (B) as such Receivable may be
modified by the application after the Cutoff Date of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended; and all parties to each Receivable had
full legal capacity to execute and deliver such Receivable and all other
documents related thereto and to grant the security interest purported to be
granted thereby.

     6.   Obligors.  Each Obligor (i) is located in the United States, (ii) is
not the United States of America or any other Governmental Authority, and (iii)
is not Reliance or any subsidiary or Affiliate thereof.

     7.   Obligor Bankruptcy.  At the Cutoff Date, no Obligor had been
identified on the records of any Originator as being the subject of a current
bankruptcy proceeding.

     8.   Schedule of Receivables; Computer Tape.  The information set forth in
the Schedule of Receivables has been produced from the Electronic Ledger, and
such information was true and correct in all material respects as of the close
of business on the Cutoff Date.  The Computer Tape made available by the
Originators to Reliance on the Closing Date was true, complete and correct in
all material respects as of the Cutoff Date and includes a description of the
same Receivables that are described in the Schedule of Receivables.

     9.   Marking Records.  By the Closing Date, the Originators will have
caused the portions of the Electronic Ledger relating to the Receivables to be
clearly and unambiguously 

                                      S-2
<PAGE>
 
marked to show that the Receivables have been sold to Reliance by the
Originators in accordance with the terms of this Agreement.

     10.  One Original.  There is only one original executed copy of each
Receivable.

     11.  Receivable Files Complete.  There exists a Receivable File pertaining
to such Receivable and such Receivable File contains (a) a fully executed
original of the Receivable, (b) the original executed credit application or a
copy thereof and (c) the original Lien Certificate indicating that the Financed
Vehicle is owned by the Obligor and subject to the interest of Reliance or an
Originator as first lienholder or secured party or, if such original Lien
Certificate has not been received, a copy of the application therefor.  Each of
such documents that is required to be signed by the Obligor has been signed by
the Obligor in the appropriate spaces.  All blanks on any form have been
properly filled in and each form has otherwise been correctly prepared.  The
complete Receivable File for each Receivable currently is in the possession of a
Custodian.

     12.  Receivables in Force.  No Receivable has been satisfied, subordinated
or rescinded, nor has any Financed Vehicle securing each such Receivable been
released from the Lien of the related Receivable in whole or in part.  Each
Receivable is, and as of the Cutoff Date will be, in full force and effect in
accordance with its respective terms and neither the related Originator nor any
Obligor has or will have suspended or reduced any payments or obligations due or
to become due thereunder by reason of a default by the other party to such
Receivable.  Each Originator has duly fulfilled all obligations to be fulfilled
on its part under or in connection with the origination, acquisition and
assignment of the Receivables and the related security interests, including
giving any notices or consents necessary to effect the acquisition of the
Receivable by Reliance and of the related security interests by Reliance.

     13.  Lawful Assignment.  No Receivable was originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Receivable under the
Receivables Purchase Agreement or the Pooling and Servicing Agreement.  Neither
the Issuer, Reliance nor any Originator has entered into any agreement with any
account debtor that prohibits, restricts or conditions the assignment of any
portion of the Receivables.  The rights with respect to each Receivable are
assignable by the related Originator without the consent or notice of any Person
other than consents or notices which will have been obtained or made on or
before the Closing Date.

     14.  Good Title.  Immediately prior to the conveyance of the Receivables to
Reliance pursuant to this Agreement, the Originators were the sole owners
thereof and had good and valid title thereto free of any Lien (other than the
BABC Liens, which shall be released on or before the Closing Date) and, upon
execution and delivery of this Agreement by Reliance, Reliance shall have good
and valid title to and will be the sole owner of such Receivables free of any
Lien.  No Dealer or other Person has a participation in, or other right to
receive, proceeds of any Receivable.  No Originator has taken any action to
convey any right to any Person that would 


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result in such Person having a right to payments received under the related
Insurance Policies or the related Dealer Agreements or Dealer Assignments or to
payments due under such Receivables.

     15.  Security Interest in Financed Vehicle and Receivable.  Each Receivable
created or shall create a valid, binding and enforceable first priority security
interest in favor of an Originator in the Financed Vehicle, and such Receivable
together with the related security interest has been duly assigned by an
Originator to Reliance.  The Lien Certificate and original certificate of title
for each Financed Vehicle show, or, if a new or replacement Lien Certificate is
being applied for with respect to such Financed Vehicle, the Lien Certificate
will be received within 120 days of the Closing Date (or within 180 days of the
Closing Date with respect to Lien Certificates to be issued in the states of
Indiana or Nevada) and will show Reliance or an Originator named as the original
secured party under each Receivable as the holder of a first priority security
interest in such Financed Vehicle.  With respect to each Receivable for which
the Lien Certificate has not yet been returned from the Registrar of Titles,
written evidence has been received from the related Dealer that such Lien
Certificate showing Reliance or an Originator as first lienholder has been
applied for.  Immediately after the sale, contribution, transfer and assignment
thereof by the Originators to Reliance, each Receivable will be secured by an
enforceable and perfected first priority security interest in the Financed
Vehicle in favor of Reliance as secured party, which security interest is prior
to all other Liens upon and security interests in such Financed Vehicle that now
exist or may hereafter arise or be created (except, as to priority, for any lien
for taxes, labor or materials affecting a Financed Vehicle).  As of the Cutoff
Date, there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle.

     16.  All Filings Made.  All filings (including UCC filings) required to be
made by any Person and all actions required to be taken or performed by any
Person in any jurisdiction to give Reliance a first priority perfected lien on,
or ownership interest in, the Receivables and the proceeds thereof and the Other
Conveyed Property have been made, taken or performed.

     17.  No Impairment.  No Originator has done anything to convey any right to
any Person that would result in such Person having a right to payments due under
the Receivable or otherwise to impair the rights of Reliance, the Note Insurer,
the Trustee and the Noteholders in any Receivable or the proceeds thereof.

     18.  No Defenses.  As of the Cutoff Date, no Receivable was subject to any
right of rescission, setoff, claim, counterclaim or defense, including the
defense of usury, whether arising out of transactions concerning the Receivable
or otherwise, and the operation of any of the terms of the Receivable or the
exercise by Reliance, the Originator or the Obligor of any right under the
Receivable will not render the Receivable unenforceable in whole or in part, and
no such right has been asserted or threatened with respect to any Receivable.
There is not any right of rescission, offset, defense, claim or counterclaim to
the obligation of the related Obligor to pay any amount due under each
Receivable for which the Amount Financed includes the cost or premium for any
extended warranty or service agreement.  With respect to each Receivable for
which the Amount

                                      S-4
<PAGE>
 
Financed includes the cost or premium for an extended warranty or service
agreement, any amounts payable due to the cancellation of such extended warranty
or service agreement will not reduce the Amount Financed unless such amounts are
received and deposited into the Collection Account.

     19.  No Default.  There has been no default, breach, violation or event
permitting acceleration under the terms of any Receivable (other than payment
delinquencies of not more than 30 days), and no condition exists or event has
occurred and is continuing that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Receivable, and there has been no waiver of any of the
foregoing.  As of the Cutoff Date, no Financed Vehicle had been repossessed.

     20.  Insurance.  At the time of the origination of the related Receivable,
each Financed Vehicle was covered by a comprehensive and collision insurance
policy (i) in an amount at least equal to the lesser of (a) its maximum
insurable value or (b) the principal amount due from the Obligor under the
related Receivable, (ii) naming Reliance or an Originator as loss payee and
(iii) insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and collision
coverage.  Each Receivable requires the Obligor to keep the related Financed
Vehicle in good condition and repair and to maintain physical loss and damage
insurance, naming Reliance and its successors and assigns as additional insured
parties, and each Receivable permits the holder thereof to obtain physical loss
and damage insurance at the expense of the Obligor if the Obligor fails to do
so.

     21.  Contract Not Assumable.  Each Receivable prohibits the sale,
assignment or transfer of the Obligor's interest therein or the assumption of
the Receivable by another Person in a manner that would release the Obligor
thereof from the Obligor's obligation.

     22.  No Advances.  Neither Reliance nor any Originator has made any
advances in order for the Receivable to qualify for inclusion in the Trust
Estate.

     23.  Chattel Paper.  Each Receivable constitutes "chattel paper" for
purposes of Section 9-105(l)(b) and 9-308 of the UCC and has been delivered to
the Custodian which originated such Receivable.

     24.  Titling Documentation.  All documents necessary to permit the Trustee
to submit the Lien Certificates for each Financed Vehicle to the applicable
Department of Motor Vehicles for retitling in the name of the Trustee as secured
party have been delivered to the Trustee.

     25.  Full Disbursement.  At the time of origination of each Receivable, the
proceeds of such Receivable were fully disbursed.  There is no requirement for
future advances thereunder, and all fees and expenses in connection of such
Receivable have been paid.


                                      S-5
<PAGE>
 
     26.  Taxes and Assessments.  Each Receivable contains provisions requiring
the Obligor to pay all taxes and assessments imposed on or with respect to the
related Financed Vehicle.

     27.  Prepayments.  Each Receivable does not permit early termination or
prepayment unless the amount to be paid by or on behalf of the Obligor in
respect of such prepayment or termination is at all times equal to or in excess
of the related Amount Financed plus accrued and unpaid interest.

     28.  Substitutions.  No Receivable provides for the substitution, exchange
or addition of any Financed Vehicle subject to such Receivable.


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