Dealer Floor Plan Cost

Carbucks provides floor plan financing to independent auto dealers for the purchase and holding of their inventory.

Dealer floor plan cost. Simply it is a way for an auto dealer to use a. With more than 120 locations afc is one of the largest floorplan providers in north america and offers unmatched local access and customer service. For example a dealer might be able to borrow 10 million over the year to purchase 300. We finance independent dealers with a long term floor plan that has no curtailments for maximum cash flow up to 180 days.

Some dealers can consistently manage their inventory with respect to floor plan expenses. These floor plan finance formulas incorporated with your turn time can help to make or break your dealership s profitability. Quick flip first 10 days 35 00 on vehicles 7500 or below. Retail floor planning also referred to as floorplanning or inventory financing is a type of short term loan used by retailers to purchase high cost inventory such as automobiles these loans are often secured by the inventory purchased as collateral.

Floor plan lenders include local and regional banks large national banks and financing companies owned by the manufacturing companies like toyota financial or ford credit. Contrary to common perceptions most car dealers do not pay cash for the. How does floor plan financing work specifically to benefit auto dealers. The loans are often made with a one year term and based on an aggregate budget.

Go to any large auto dealer and there are hundreds of cars on the lot. Home floor plan rates. You may wonder how much the dealer had to spend to provide you with almost limitless choices. Floor plan finance companies are uniquely attuned to the needs of auto dealers.

Let s say you make a profit of 3 000 per car sold. Our continued focus on superior customer service and competitive and flexible financing. If this dealer s holding cost per day per unit is 44 63 and their turn time to sell a car is 60 days they will spend 2677 of their profit holding on. Let s say a dealer makes a profit of 3000 per car sold.

If your holding cost per day per unit is 44 63 and your turn time is 60 days you will spend 2677 of your profit holding on to a non selling car. I watch the monthly performance of our client dealers looking for trends in floor plan costs. What you don t realize is that like most new car dealers a floor plan was used to finance the cars. Floor planning is commonly used in new and used car dealerships.

7501 and above 35 or rate whichever is higher 75 minimum charge on all vehicles on the 11th day. Using cash or a bank line of credit to purchase inventory can work for some car dealers but many floor plan financing companies offer a variety of dealer specific benefits.