It’s easy for a car dealer to stock up their lots if they have enough money on hand to buy inventory. One of the most common ways for a dealer to have enough money on hand to purchase inventory is to use an auto floor plan.
Getting a Floor Plan
In order to qualify to use an auto floor plan, a dealer needs to have credit. Specifically, a history of using credit and paying down debt. Floor plan lenders want to see what a dealer’s credit history is like. Bad credit and some marks on a credit history won’t always prevent an individual from using a floor plan, but it will likely limit the amount of capital a lender is willing to give to a particular dealer. Dealers that manage their floor plan correctly and over time, show they are capable of floor planning responsibly, will likely be able to increase their loan amount.
Using a Floor Plan
Many auction locations accept a number of auto floor plan companies as a payment option. This means that at auction, a dealer only really has to worry about one thing: buying inventory. With a floor plan, dealers don’t have to worry for the most part about handling back-end operations and details. All a dealer will have to do is bid, and take blocked tickets to the correct department to complete their purchase.
Growing Dealership Business
Auto floor plans ensure that a dealer has the capital needed to purchase inventory, and frees up dealership cash to pay for other expenses. Floor plans ensure cash isn’t eaten up by depreciation, and dealers don’t have to spend extra time at auction or waiting for checks to clear.
Using a floor plan gives dealers the flexibility to do what they do best, delivering excellent customer service and putting consumers in the vehicles they want and need.