Dealer Spotlight: How Buying a Car Turned into a Career

Monique Belgrave, Dealer Principal at Consumer 1st Auto Group in Hasbrouck Heights, New Jersey didn’t realize when she went searching for her first car, it was going to lead to a career opportunity. “I got my first car, a 2004 Nissan Maxima, it’s actually the exact car as over there,” Belgrave points across her dealership. “Except it was an olive color.” A few weeks after her purchase, the dealer she bought that Maxima from called her and asked if she would be interested in working for him. Monique accepted and started out answering phones. However, she quickly realized that the way business was being conducted just wasn’t efficient and decided that she could run a dealership better on her own. “I said I can do this! We started out with just two cars and it has grown from there.”

Belgrave attributes a lot of her early success to the guidance she received from her Performance Manager, Jon Santiago. “When you’re in this business as a young female, you don’t know who to trust.” But since Santiago’s been there since the beginning and has always been just a phone call away, Belgrave felt confident taking his advice. “I know Jon isn’t going to steer me in the wrong direction. From the beginning he was there, he had all the answers and just blew me out of the water.”

At one point Belgrave said things weren’t going as well as they could and it was Santiago who helped her get back on track. He strongly encouraged her to use tools like vAuto which provided access to market analytics and helped her know what inventory to buy. Santiago also encouraged her to utilize more of her floor plan so she could increase the inventory options at her dealership. “Having NextGear Capital as a floor plan has allowed for us to be able to expand our inventory: from a Ford all the way to a Porsche.”

It was after this change when things really started to turn around. Belgrave started doing so well with her floor plan  in fact, that without even asking, NextGear Capital extended her additional credit. “It made me feel like I was doing good, I made sure I did everything I needed to do. I made my payments on time and I made sure I did the audits the way they needed to be done.” Belgrave added with a giggle, “I can’t wait to see what I get approved for next!”

Belgrave was also an early adapter of the Account Portal system and found it useful in helping her keep track of everything. From how much money she has available in her floor plan, to where a title is located and what it looks like, “it’s just a point and a click” away in the Account Portal system.

Another feature in Account Portal that helped Belgrave was Rapid Pay. “Having access to Rapid Pay has significantly benefited us. If a customer wants to trade in a car, we have their title and can cut them a check instead of waiting for the car to sell. There’s so much more we can do because of Rapid Pay.”

She went on to explain how her transactions with local wholesalers have improved since she started using Rapid Pay. The wholesalers see reliability in a line of credit with Cox Automotive, and appreciate that Monique uses a reputable floor plan provider. Wholesalers will now provide her with copies of tiles so she can get the cars on the lot before they’re paid off. Allowing her to have more inventory to offer her customers. “When we’re buying inventory from wholesalers and using NextGear Capital, it gives us creditability because they knew that we have NextGear behind us.”

Monique Belgrave with a customer

Being a single mom to three boys also helps keep Belgrave motivated. “I like to provide for my boys and my family.” Her oldest son is 15 and is so proud of his mom that when he goes to school, he makes sure that his teachers know that his mom runs a dealership and that they should be buying their cars from her. While her 6-year-old has become quite proficient in identifying the make of all cars on the lot having spent so much time at the dealership and can point at any car and identify who the manufacturer is.

They’re both interested in getting involved in the business as well, whether it’s taking over for her at the dealership someday, or getting involved in insurance or being a mechanic, she encourages them to follow their passion. “I always tell them the possibilities are limitless and to just follow their heart.”

Even though Belgrave wants to run a successful business that she can pass down to her sons in the future, at the end of the day it isn’t just about how many cars she sells, it’s about the way her customers are treated. “The name of the business is Consumer 1st, and we want to make sure the customer leaves here knowing it wasn’t just about a sale, it’s about making sure your family is safe in a vehicle.”

With a growing team behind her she says that it’s only a matter of time before they dominate their area. “I don’t want to be mediocre; I can’t be regular and there’s no telling where this will go.”

The Benefits of Auto Financing for Wholesale Dealers

Two men discussing auto financingWhile there are significant differences between retail and wholesale business models, both can benefit from inventory financing. However, wholesale dealers need to use caution when selecting a wholesale auto financing provider because of these differences. 

Wholesalers are looking to buy inventory at auction for the best prices possible that way they can sell those vehicles to dealerships and make a profit. In addition to finding good deals at auction, selling inventory quickly is key to generating revenue for wholesale dealers. Any funding sources used must be able to keep up with the speed that wholesalers turn inventory. Beyond just keeping up with the speed of business, wholesalers also look for lenders with competitive term plans, and an exceptional team committed to client success. 

Account Transparency 

Wholesaling dealers need to be able to quickly and simply see information about the vehicles on their floor plan. To do so, they will need to find a partner with a highly intuitive account management platform. Wholesalers that floor with NextGear Capital have the ability to see crucial data about their lots and inventory on their floor plan at a glance.  

Within Account Portal dealers can make payments, manage audits, easily identify vital information for their units and more.  

 The power of Cox Automotive 

When you partner with NextGear Capital, you get access to the powerful brands of Cox Automotive. With businesses like Kelley Blue Book, Dealertrack, and Manheim just to name a few, you’ll have access to industry-leading dealer solutions.  

For example, wholesalers can take advantage of Manheim Express, a product from Manheim that allows dealers to buy or sell vehicles from a mobile device. This is the perfect tool for a dealer looking to buy and sell inventory fast and effectively. If you prefer buying from physical auctions, you can look for locations using our Auction Finder tool.  

In addition to innovative tools and technology, the staff are dedicated to dealer success. Every NextGear Capital dealer floor plan is serviced and supported by a dedicated account executive. Our local representatives are graduates of the NIADA’s certified master dealer program, and are the best trained in the industry. We provide on-site, online and over the phone assistance with your dealer floor plan.  

Title Management 

Since wholesaling dealers sell at a high pace, managing titles can get complex. With wholesale auto financing, title management is a breeze. With NextGear Capital, wholesaling dealers don’t often have to deal with a physical title and can pay an additional fee to get title work done on their behalf. However, if a title is ever needed they can be quickly sent and are almost always available to view through a dealer’s account. Check out this article to learn more about title management in Account Portal. 

In addition to saving you time, a floor plan company can keep titles secure. A vehicle cannot be sold without a title, so it is imperative titles are kept in a safe, secure location to ensure they are never lost or stolen. At NextGear Capital, all titles are held in a secure, fire-resistant vault with cameras running 24/7. Additionally, NextGear Capital implemented an innovative solution that tracks the location of every title in their possession.  

Streamlined Purchases 

Waiting on checks to clear could be a thing of the past with wholesale auto financing from NextGear Capital. As one of the largest floor planning companies for independent dealers, chances are many of a wholesaler’s dealer customers floor plan with NextGear Capital. Two dealers that both have a NextGear Capital floor plan can simply request to move a particular unit from one line of credit to the other, and the difference will be deposited into the seller’s account. 

 Want to learn more about wholesale auto financing with NextGear Capital? Contact us! 

Tips to Minimize Dealer Floor Plan Costs

Learning about dealer floor plan ratesOne of the biggest concerns dealers have when deciding to floor plan is the costs and interest rates. Dealer floor plan interest rates may seem daunting, but when managed properly, can benefit your business.  

Using a car dealership floor plan ensures that a dealer can have extra capital on hand when it is needed. If a dealer only uses cash to purchase inventory, a dealer can only get that cash back if they sell the vehicle, either to a consumer or through other channels such as an auction. Selling a vehicle for extra cash can take time, and sometimes dealership expenses can’t wait.

Choose the right floor plan provider 
When looking at floor plan providers, it’s important to find one that offers dealership floor plan options. No two dealerships are exactly alike, and their floor plans shouldn’t be either. Unfortunately, some floor plan finance companies do not offer a variety of plans, causing some dealers to get stuck with fees and services they do not need.  

An example of floor plan customization would be NextGear Capital’s Tiered Pricing.  This is a unique feature that bases floor plan fees on purchase price, not fixed or promotional terms. For example, a dealer who floors a $2,000 unit does not have the same flooring costs as a dealer who floors a $12,000 unit. This keeps cash on hand versus tied up in inventory, creating a more profitable way to manage a dealership.  

Just because there are fees associated with floor plans, does not mean with dealers aren’t seeing savings. In fact, our dealers are seeing savings up to 65% on their flooring costs since they started using Tiered Pricing.  

Make payments on time 
Submitting payments on time is the easiest way to avoid extra fees and an increase in dealer floor plan interest rates. One way to ensure you never miss a payment is by enrolling in Auto-Pay. Available via Account Portal, AutoPay allows dealers to focus on daily operations without the worries of a potential missed payment. Enrolling in AutoPay is a quick and easy process, and free for all NextGear Capital dealers.  

Take advantage of promotions 
Most floor plan providers offer special promotions from time to time! NextGear Capital tends to run promotions seasonally, for more information on these promotions, be sure to follow us on social media. Promotions can offer great terms, making it even more affordable to floor plan. 

To stay up to date on promotion information, follow us on Twitter and Facebook. 

Want more information on dealer floor plan interest rates? Contact us today!

The Best Financing for Independent Dealers

Independent dealers rely on capital to run a successful business. It’s not uncommon for dealers that were previously operating with only cash on-hand to realize they may need extra funding. Luckily, there are several options when looking for financing for independent dealers. Most prominently, those options are typically a loan from a bank, or funding from a floor plan financing provider. If you’re considering either of these options, it’s crucial to educate yourself on the differences so you can get the best financing for your dealership.

Getting Started

When researching financing for independent dealers, it’s important to look at what each loan entails. For example, bank loans might be backed with personal assets, such as a home. With a floor plan provider, the collateral used is the inventory purchased. For most dealers, this means it’s not necessary to put down personal assets to receive needed funding. 

 In most cases, it’s easy to get started with a dealer floor plan provider. They will extend a line of credit depending on your credit score and information provided in the online application.

How to Use Your Funding

With any financing for independent car dealers, there’s a purchasing process involved to acquire inventory from auction and non-auction sources. Depending on the source of funding, what’s required from a management standpoint can vary widely. 

 Unfortunately, using a bank loan at an auction must follow most of the same processes used when buying inventory with cash. This sometimes-lengthy process can include keeping track of what funds need to be released and personally making sure titles are correctly managed. Though these tasks do not seem difficult to accomplish, they certainly take up a dealer’s valuable time and effort.  

 Independent dealers that use a floor plan provider to buy inventory have access to auxiliary services that can alleviate some time and effort from those administrative tasks. Floor planning dealers can purchase inventory with the confidence that the auction and seller will be properly compensated. In addition, title management is handled on the dealer’s behalf, further saving time and effort for dealers. 

Limitations

Some dealers have specific types of inventory they like to stock. In most cases, banks have certain restrictions on types of vehicles you can purchase. Those restrictions are based on a vehicle’s mileage, make, model, or year. Unfortunately, those vehicle limitations can significantly reduce a dealer’s potential pool of available units and subsequently, their cash flow.  

If a dealer chooses a floor plan provider, there are often fewer restrictions on the types of inventory that can be financed. Dealers can purchase a wider variety of in-demand units to retail to consumers. 

The Best Option?

For some, the most important factor when looking at financing for independent dealers is finding a lender that is going to stick around. It’s important to have the assurance that a funding provider is going to act as a partner. 

 Floor planning services offered by banks and local lenders aren’t always consistently offered. Over the years, several financial institutions have been in and out of the floor planning business, and support and attention for those efforts waver depending on the profitability of the bank or local lender’s floor planning program. 

Financing inventory for dealers is the sole focus of a floor plan company. Beyond just a consistent record of providing funds to car dealers over the years, floor plan providers offer a partnership steeped in years of experience in the industry. 

No matter what lender you choose for your dealership, whether a bank floor plan or a floor plan lender, it’s essential to select the best funding partner for your needs. 

At NextGear Capital, we are dedicated to providing financing for independent dealers. To get the buying power and resources you need, contact us. 

NextGear Capital’s Self Reconciliation Auditing Tool Passes 60 Percent Adoption

Monique Belgrave using Self ReconciliationDealers taking advantage of NextGear Capital’s Self Reconciliation tool are clearing their audits faster than ever while benefitting from a better client experience. This new method significantly shortened the auditing process for dealers from three to five hours, to less than 10 minutes. After only six months, more than 60 percent of clients have utilized Self Reconciliation to manage their floor planned inventory’s auditing.

“Prior to Self Reconciliation, the auditing process was one of the biggest points of frustration for NextGear Capital’s dealer clients, said Angie Provo, Senior Director of Marketing at NextGear Capital. “The quick adoption rate of this tool demonstrates NextGear Capital’s commitment to delivering new technology and services that ultimately facilitate a better client experience.”

Available inside of NextGear Capital’s Account Portal, Self Reconciliation clears units in real time, provides access to a historical database of previously reconciled units and allows dealers to pay off inventory, all through their mobile device. Additionally, dealership principal owners can now delegate the auditing process without having to share their Account Portal login credentials.

“The frustrating process of clearing audits using a Word of the Day method is now a thing of the past,” said Monique Belgrave, owner, Consumer First Auto Group. “Self Reconciliation means no guess work for my business. Audits are now instantly cleared and managed at a time convenient for me.”

NextGear Capital was determined to create a solution that empowered dealers to save time on their audits while allowing them to focus more on the tasks that drive profitability for their business. Self Reconciliation is that tool.

How Many Cars Should Be on Your Auto Floor Plan?

Dealer figuring out how many vehicles to put on his auto floor planThe key to operating a profitable dealership is finding out how to balance cash flow with current inventory. Figuring out the ideal number of vehicles to put on your lot can be complicated and take quite a bit of time. Luckily, there are several auto floor plan formulas that can help dealers determine how much inventory they should stock and how many sales they should be making monthly. 

How many vehicles should you stock? 
In order to determine the number of vehicles a dealer should stock, they need to have a realistic monthly desired sale goal. This monthly sale goal needs to be realistic because it is one of the key factors in the inventory formula. For example, let’s say a dealer wanted to sell 60 units per month. Assuming the average turn time for vehicles on a dealer’s lot is 40 days, a dealer would turn their lot 9 times over the course of 12 months. The formula is as follows: monthly desired sales divided by how many times a lot is turned per year, multiplied by the number of months in a year. 


In this example, a dealer would need to stock 80 units based on 60 desired sales per month and a 40-day average turn time. Adjust the formula with your average turn time to get the most accurate numbers. 

How many sales should you make based on stock? 
Determining how many sales a dealer should strive for based on the current stock can help a dealer refine their sales per month goal. Knowing the target sales number, you should be working toward based on inventory can also help a dealer avoid over-stocking. Let’s say a dealer has 108 units in stock. Again, let’s assume a turn time of approximately 40 days (nine times per year). To figure out the number of desired sales, multiply the number of units in stock by nine, then divide that sum by 12. Here’s the formula break down:

Based on this example, the dealer should aim to make 81 vehicle sales per month. 

Purchase inventory with an auto floor plan 
After determining how about how much inventory your lot needs, it’s time to purchase! Dealers have a few options on what type of capital they use to purchase inventory. Some use the cash they have on hand, while some take advantage of an auto floor plan. 

There are many great benefits in choosing an auto floor plan instead of cash. One major benefit is that with a floor plan, dealers do not have to convert inventory to cash. If a dealer only uses cash to purchase inventory, a dealer can only get that cash back if they sell the vehicle, either through a consumer or through other channels such as an auction. Selling a vehicle to a consumer for extra cash takes time, and sometimes dealership expenses can’t wait. 

With an auto floor plan, if a vehicle hasn’t sold after a contractually determined number of days a dealer only has to pay for a small portion of the car’s value. Once the car sells, the dealer pays back the amount they initially bought the vehicle for. 

At NextGear Capital we recommend a dealer’s budget for stocking inventory to be at least a 70/30 mix of their auto floor plan to cash, respectively. Using a floor plan correctly to stock inventory ensures a dealer can buy enough vehicles to meet the needs of their market, and the cash on hand ensures a dealer can pay for their expenses. 

If you’re concerned your dealership doesn’t have the right balance of inventory and cash flow, contact us.