Auto Dealership Floor Plan Financing

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.

Auto dealership floor plan financing.

Floor planning is a form of financing for large ticket items displayed on showroom floors. Simply it is a way for an auto dealer to use a lender s funds to finance the cars and until each of them is sold the lender holds title to the cars. Variety of floor plan structures and interest rate options to meet your needs and reduce your interest expense. The dealer then receives payment hopefully including a profit and remits the balance to.

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. Contrary to common perceptions most car dealers do not pay cash for the. So you need floor plan financing that will infuse your automotive dealership with new cars without terms that could prove difficult down the road. Dcg capital has helped numerous new car dealers acquire floor plan loans getting customers the best terms and conditions while providing a stunning inventory increasing sales and expanding their legacies.

For example a dealer might be able to borrow 10 million over the year to purchase 300 new cars. 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. The loans are often made with a one year term and based on an aggregate budget. These floor plan finance formulas incorporated with your turn time can help to make or break your dealership s profitability.

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. What you don t realize is that like most new car dealers a floor plan was used to finance the cars. Floor plan statements and inventory information available online. Let s say you make a profit of 3 000 per car sold.

For example automobile dealerships utilize floor plan financing to run their businesses. 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. New and used vehicle floor plan financing at competitive rates and terms focused on meeting the needs of new car franchised dealerships. That s what makes floor plan financing so invaluable.

Floor planning is commonly used in new and used car dealerships.