Auto Dealership Floor Plan Financing

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.

Auto dealership floor plan financing.

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. Floor plan statements and inventory information available online. What you don t realize is that like most new car dealers a floor plan was used to finance the cars. For example automobile dealerships utilize floor plan financing to run their businesses.

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. 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. Variety of floor plan structures and interest rate options to meet your needs and reduce your interest expense. So you need floor plan financing that will infuse your automotive dealership with new cars without terms that could prove difficult down the road.

The loans are often made with a one year term and based on an aggregate budget. It frees dealerships to build their inventory without tying up the funds they may need for other operational expenses. Floor planning is commonly used in new and used car dealerships. For example a dealer might be able to borrow 10 million over the year to purchase 300 new cars.

These floor plan finance formulas incorporated with your turn time can help to make or break your dealership s profitability. In addition to freeing up the cash a dealer has on hand other floor plan financing benefits can include extra flexibility in terms of paying off a particular piece of inventory payment extensions and credit increases if. Floor planning is a form of financing for large ticket items displayed on showroom floors. Contrary to common perceptions most car dealers do not pay cash for the.

New and used vehicle floor plan financing at competitive rates and terms focused on meeting the needs of new car franchised dealerships. The dealer then receives payment hopefully including a profit and remits the balance to. That s what makes floor plan financing so invaluable. City auto finance is a locally owned and operated floorplan company dedicated to providing unparalleled customer service and meeting the unique financial needs of used car dealers in the mid south.

Let s say you make a profit of 3 000 per car sold.