Wholesale Financing for Independent Car Dealers

car dealer wholesale financingA wholesale dealer relies on turning vehicles quickly in order to make a profit. Independent wholesale dealers are faced with a completely different set of challenges than retail dealers, but still share many of the same inventory financing needs. This means that they need a wholesale financing partner that not only understands their business but has the right tools and features available to ensure the funding process is quick, efficient, and simple. 

Account Tools and Features 

Dealers utilizing wholesale financing need to have access to their accounts and information about the vehicles on their floor plan at a moment’s notice. With Account Portal, NextGear Capital dealers have exactly that. They can see detailed information on each vehicle as well as critical industry data to help them make smart business decisions. 

Tiered Pricing is another tool that wholesale dealers can take advantage of. With NextGear Capital, they have truly flexible term plans that complement their purchasing style.  Flooring costs reflect the price of the inventory. 

Managing Titles 

When getting wholesale financing through NextGear Capital, dealers don’t have to worry about managing titles and all the administrative tasks costing time and money associated with that. This is especially beneficial to wholesale dealers, since they rarely will have the time to deal with management of the physical titles. Dealers can view titles on their account at any time and can get them sent to their dealership by the next business day. 

NextGear Capital’s Vast Network 

As one of the largest floor planning company’s in the industry, many independent dealers have NextGear Capital lines of credit. Wholesale financing through NextGear Capital means that you can easily move a unit from an independent dealer’s floor plan to the wholesaling dealer’s line of credit and deposit any difference into a wholesaling dealer’s financing account. 

Want to learn more about wholesale floor plan financing with NextGear Capital? Reach out to your NextGear Capital local representative or contact us. 

What You Need to Know about Floor Plan Lending

floor plan lendingDealer success is dependent on stocking up their lots with the right inventory. While many dealers would prefer to pay for the vehicles up front with cash on hand, this isn’t always feasible or the best option for maintaining cash flow and growing their business. Floor plan lending is often what the most successful dealers use to get the most out of their business. 

Floor Plan Lending: How to Start 

The first thing dealers need to do in the floor plan lending process is to apply. Besides their dealer license, in order to qualify, a dealer needs to have a history of using credit and paying down debt. Bad credit and some marks on a credit history won’t always prevent an individual from obtaining a floor plan, but it will likely limit the amount of capital a lender is willing to give to the dealer.  Line of credit amounts are not set in stone. Dealers who consistently demonstrate that they can manage their floor plan will have the opportunity to increase their line of credit. 

Using your line of credit 

Many auction locations accept several floor plan lending providers as a payment option. This means that at an auto auction, a dealer only needs to worry about buying inventory that is the best for their dealership. Instead of worrying about handling back-end operations and other details, a dealer can simply notify the auction to put the vehicle on their floor plan and experience a simple, seamless transaction. For non-auction purchases, NextGear Capital dealers also have the option of using Rapid Pay, which offers expedited funding on the notice of a title. 

Grow Your Business with Floor Planning 

Floor plan lending helps dealers secure the capital they need to purchase inventory as well as the cash flow to grow their business or to pay for other expenses. Floor plans can eliminate holding costs and depreciation, in addition to help cost savings by giving dealers back more time in their day by freeing them from waiting for checks to clear at an auction as well as other various administrative tasks. 

Floor plan financing allows dealers to focus on running their business, allowing them to spend less time in the weeds and more time finding ways to invest in their dealerships.

You Need More Than a Just Floor Plan Company

Dealer using First Gear

More than a floor plan companyTraditionally, when thinking about a floor plan company, dealers think about inventory financing for the vehicles they purchase. Though this is the main function of a floor plan lender, dealers should also consider what other value their lender can provide. A Floor Plan Company should be a valuable partner and provide more resources than just capital.

Industry Expertise

True floor plan financing partners will have in-depth knowledge on the automotive industry and will be able to provide valuable insights on current trends of which dealers should be aware. This usually isn’t the case with banks or other local lenders. NextGear Capital has the resources to stay connected to automotive dealers and understand their needs and pain points.

NextGear Capital’s partnership with Cox Automotive means that our dealers are backed with insights from the entire Cox Automotive network. This expertise sourced from every corner of the automotive industry ensures that dealers get the guidance they need when it comes to using their floor plan.

Local Market Knowledge

Many floor plan companies have local representatives or account executives that can provide additional insights, answer questions and can work to help dealerships manage their floor plan. NextGear Capital’s performance management system allows for more efficient and meaningful interactions with dealers to add even more value to their business. Dealers can reach out to their performance manager with any questions or concerns with confidence that their floor plan company is working for them,

Dealer Resources

Auto dealers looking to stay up-to-date on the automotive industry and the current landscape of the used car market, should seek a floor plan partner that offers a selection of dealer resources, including case studies, informative videos, tips and trends. These resources should cover a variety of subjects; including purchasing and selling inventory, sourcing inventory and business practices amongst a gamut of other topics.

Utilizing a floor plan company as a resource for industry information ensures dealers are informed of essential information to help run and grow their businesses.

For more information on how we can help your dealership grow, contact us.

Getting the Most out of Floor Plan Financing

Floor plan financing gives car dealers the flexibility to grow their business by relieving cash flow issues and acquiring additional inventory. Though this growth opportunity can be exciting, it’s important for dealers to know how to effectively manage their floor plan in order to get the most of it. 

Use Tools and Resources Available. 

A good floor plan financing partner will offer tools to dealers that help them manage their line of credit. NextGear Capital dealers have access to Account Portal, which provides detailed, real-time account overviews for dealer and auction partners, including a comprehensive dashboard that features analytics and payment history instantly on any device. Account Portal also offers features such as Rapid Pay, Self-Reconciliation and Auto Pay. These tools allow dealers to receive expedited funding, streamline the auditing process, and avoid late payments.  

Have an Exit Strategy 

Though using floor plan financing can help prevent cash from depreciating, having an exit strategy is important to optimize profitability and avoid incurring additional term plan fees. Knowing the break-even point on a unit by unit basis is crucial to any good exit strategy. It allows dealers to the exact point where profits could turn to loss. Another great component of a solid exit strategy as a part of floor plan financing is knowing specific outlets to sell aged inventory, whether that’s at physical auctions like Manheim or digital platforms like OVE or Manheim Express. 

Use a Floor Plan Financing Partner That Understands Your Business 

Dealership success relies on more than a line of credit. Dealers that take advantage of the partnership a floor plan financing company provides can often optimize overall dealership operations and profitability. Local representatives can provide additional insights, answer questions and can work to help dealerships manage their floor plan. Potential issues can be avoided when dealers have easy access to their floor plan financing partners.

Dealers who take these tips into consideration can ensure their floor plan is properly managed, and consequently, will likely have a seamless floor planning experience. If you have additional questions about your auto dealer floor plan line of credit, let us know and we’ll connect with you.

Paying attention to these key aspects of floor plan financing can help car dealers in a big way. They will have a seamless experience and have a better chance at seeing impactful results to their business.  If you have additional questions about your auto dealer floor plan line of credit, contact us and we will connect with you. 

Improve Turn Times with Used Car Reconditioning

Used Car after ReconditioningGetting a vehicle ready for the front lines of your dealership lot isn’t a simple task. There are repairs, interior and exterior detailing, and other small touches typically required before putting a car on your lot. It takes time to make all this happen, and often will hinge on an individual vehicle’s overall condition. On average, it usually takes a dealer seven to ten days to complete necessary repairs and detailing before putting a car on the front lines. However, by floor planning vehicles and streamlining used car reconditioning, dealers can get vehicles front-line ready faster, making potential vehicles available sooner to consumers and improving turn times.

Why Reduce Reconditioning Time?

Holding costs accumulate the longer a dealer holds on to a vehicle. To determine holding costs, read our floor plan finance formulas. By reducing the number of days it takes for vehicles to be reconditioned, dealers are able to incur fewer costs and potentially sell vehicles faster to consumers, improving overall turn time.

Establish Your Baseline

In order to streamline a process, it’s crucial to understand where things are currently. After floor planning an auction vehicle, how long does it take to get it to your dealership? How long does it currently take to get vehicles front line ready? Complete a brief audit and note a few different potential solutions to streamline the used car reconditioning process.

Ask for Input

Operating a dealership can be a team effort. If changes are going to be implemented, it’s crucial to get input from the individuals carrying out the various reconditioning tasks. Consider any hesitations or concerns they may have, and make sure everyone is on the same page before implementing changes.

Recondition Cars at Auction

Dealers that may not have a used car reconditioning operation are often able to utilize on-site auction reconditioning services. Taking advantage of this option may help your dealership repair and detail vehicles faster.

Every vehicle acquired has different reconditioning needs. However, by improving the amount of time it takes to get a car front-line ready, dealers can recoup time and holding costs that hold up dealership operations, turn time and profitability.

Managing the Cost of a Dealer Floor Plan

Dealer managing their floor planAs a business owner, automotive dealers must keep track of a variety of vendors, invoices, audits, payments and bills. Though implementing third party tools to stay on track can be incredibly useful, it’s often more helpful when business partners include mechanisms that make it easy to manage accounts. A dealer’s time is more valuable than ever, and any additional conveniences offered should be considered when selecting a business partner. A dealer floor plan with NextGear Capital grants more control over both their floor plan fees and audits with the tools offered within Account Portal. 

AutoPay 

Avoid accumulating any late NextGear Capital floor plan fees by enrolling in AutoPay. Instead of worrying and stressing over making your dealer floor plan payments, any fees will be periodically deducted from your account. Enroll today, and forget about missing floor plan payments.  

Self Reconciliation and the My Audits Tab 

Vehicle audits are a necessary part of a dealer floor plan that shouldn’t take up more time or funds than necessary. On occasion, a car dealer may not have a floor planned vehicle immediately available for a floor plan auditor.  By using the My Audits tab and Self Reconciliation feature within Account Portal, NextGear Capital dealers have access to a flexible auditing process that gives dealers control to do business. 

With the My Audits dashboard within the NextGear Capital Account Portal, auto dealers can have visibility and transparency over the vehicles that need to be reconciled. Timelines and associated fee transparency ensure dealers have a historical view of audited vehicles. 

Plus, dealers can pay off units without leaving the My Audits tab, giving dealers further control over their NextGear Capital floor plan fees. 

Along with the My Audits tab, Self Reconciliation allows dealers to reconcile vehicles from the convenience of a mobile device. After logging in to Account Portal, dealers just need to take and upload a series of four vehicle images from inside the platform. Additional follow-up isn’t needed, since the vehicle images are cleared in real time! 

AutoPay, the My Audits tab and Self Reconciliation give NextGear Capital dealers more visibility and control over their audits and NextGear Capital dealer floor plan fees. By taking advantage of these tools, dealers can do business their way, when and where it is most convenient. 

Aged Used Inventory Management Tips for Dealers

Dealer Managing Aged Used InventoryUsed car dealers have the unique challenge of continuously balancing cash flow and inventory. Though maintaining cash flow can be difficult, managing aged used inventory for profitability is often a bit more demanding on a dealer’s time and efforts. An added downside is that vehicles that sit on your lot too long depreciate and consume resources. Though using floor plan finance to purchase vehicles can help keep cash depreciation at bay, an exit strategy paired with a few strategic inventory outlets can help dealers recoup the costs of aged used inventory. Consider a few of the following key places to send aged used inventory.

Wholesale at Auction

One of the most common ways dealers recoup costs on aged used inventory is to simply take the unit back to a physical auction location. The ability to touch, feel, hear and smell a car is a crucial aspect for some dealers to make a purchasing decision. Be sure to get any inventory to auction sooner rather than later to make sure it is properly processed.

Digital Auction Platforms

As consumers continue to embrace digital retailing, car dealers do the same. For dealers that want to skip visiting a physical auction, it’s simple to order inventory from the comfort of the dealership office via digital auction platforms.

These platforms make it easy to both buy and post aged used inventory. For example, digital auctions platforms like Manheim Express allow dealers to quickly and easily post inventory from the convenience of a mobile device. Often, there are also other features that allow dealers to show additional images and details, and the potential to add condition reports to validate the state of a vehicle.

Plus, dealers don’t necessarily have to wait to until a unit becomes “aged” to post on the platform.

Exchange Inventory with your Local Network

Vehicles that don’t sell well on your lot may have a better chance to sell at a neighboring dealership. Building a local network takes time and effort. However, the ability to exchange aged used inventory with dealers can be a valuable resource to both source and sell vehicles.

NextGear Capital dealers have the added bonus of quickly and simply using their floor plan to purchase these non-auction units via Rapid Pay.

Inventory management is a key part of running a successful dealership. By floor planning vehicles and having an exit strategy for every vehicle that comes to your dealership, dealers can recoup aged used inventory costs and reduce cash depreciation.

NextGear Capital Names Top 10 Floor Planned Vehicles of 2018

dealer inventoryCarmel, Ind., March 21, 2019 — While every dealer approaches inventory selection differently, key trends emerged last year that help illustrate which vehicles dealers found most appropriate to add to their lots through floor planning. Trucks and sedans, which are typically practical and affordable options for customers, dominated the list of NextGear Capital’s Top 10 Floor Planned Vehicles of 2018.

While Crossover Utility Vehicles (CUVs) and Sport Utility Vehicles (SUVs) gained a larger share of the new car market in 2018, trucks and sedans continued to show their value in the used car market. The For

d F150 and Chevrolet Silverado, the two best-selling new vehicle models last year in the U.S., also were popular on the used car side and topped the list of floor planned vehicles. Midsize sedans, including the Toyota Camry, Nissan Altima, Honda Accord and Ford Fusion, ranked highly too.

“Millennials are some of the biggest used-vehicle consumers, and price often factors heavily into their purchasing decisions,” said Shane Pyne, NextGear Capital industry intelligence manager. “At the moment, used sedans are generally more affordable, making them an attractive choice for budget-minded car shoppers. Trucks remain a popular and practical choice for customers, putting them high on the list for dealers to stock as well.”

The Top 10 Floor Planned Vehicles of 2018 in order were:

  1. Ford F150
  2. Chevrolet Silverado
  3. Nissan Altima
  4. Toyota Camry
  5. Honda Accord
  6. Ford Fusion
  7. Honda Civic
  8. Toyota Corolla
  9. Jeep Wrangler
  10. GMC Sierra

NextGear Capital, a Cox Automotive brand and the largest independent inventory finance company in North America, compiled the list based on an analysis of data from more than 20,000 independent dealers. Dealers can use NextGear Capital floor plans to finance both auction and non-auction purchases, helping them acquire the inventory they need to attract customers and grow their business.

The NextGear Capital Top 10 Floor Planned Vehicles led a used vehicle market that hit a post-recession record in 2018 with 39.6 million units sold, based on Cox Automotive estimates. The Manheim Used Vehicle Value Index also estimated used vehicle values rose for the year. A closer look at vehicle segments backs up the trend in top floor planned vehicles. While losing share in the new car market, midsize sedans and compact cars outperformed the wholesale vehicle market in their value gains, a trend that has held through the first part of 2019, Manheim data shows.

How Independent Car Dealers Can Improve Turn Time

Most car shoppers prefer to do their vehicle research online and do as much paperwork as possible before they ever step into a dealership to complete a transaction. On the flip side, dealers want warm leads and qualified buyers. With a more concentrated focus on digital retailing, buyers can complete purchasing activities faster and independent car dealers can engage with buyers and complete transactions sooner, which can potentially result in faster turn times for different dealership vehicles.

Complete Negotiation Online

Bargaining inside of a dealership doesn’t necessarily make for a great customer experience. If there are too many team member handoffs and mishandled communications, dealers are bound to end up with customers severely unsatisfied with the purchasing process.

By moving negotiation to digital retailing tools, customers can find a deal and financing they want before stepping on a dealership lot.

Minimize Transaction Time

Customers in a car dealership don’t want to be pressured to fill out paperwork, nor do they want to be in the dealership for hours filling out forms. Independent car dealers who incorporate digital retailing into their dealership’s purchasing process, will allow customers more time to do research, select options and complete necessary paperwork all before stepping into the dealership.

Providing customers access to payment information, incentives, trade-in values and protection information before visiting a dealership can increase customer satisfaction, and likely help improve overall dealer turn time.

Work with Your Team to Implement and Improve Processes

Independent car dealers who incorporate digital retailing into their dealership will only see faster turn times when every team member helps with its implementation. Walk through some potential digital retailing processes. See if your team has any concerns or any ideas on how to improve processes.

The way that consumers shop and purchase items has changed. Though adding digital retailing to your dealership may be a challenge, any trade-off that leads to improved turn times and customer satisfaction is worth a temporary inconvenience.

Want to lean more about digital retailing? Click Here

Buy More & Buy Right With A Flooring Financing Plan

The more vehicles a dealer can stock on their lot, the more opportunities there are to make a sale, and ensure profitability. However, that task can be difficult if dealers are relying on their own funds and gut to keep their lot stocked with good inventory. With a floor plan, car dealers have the ability to buy more inventory, and have the data to back up if those vehicles were a good buy.

Buy More Inventory
The key benefit of a floor plan line of credit is that dealers can stock their lots with needed inventory without using their savings on hand. With more inventory in stock, dealers have more opportunities to make sales.

Additionally, by using a floor plan, dealers have improved cash flow. Improved cash flow allows dealers the ability to make decisions tailored towards long-term success rather than just making sure the next bill is paid.

Confirm You Buy Right
Dealers make margins with a good buy, not necessarily once the car sells to a consumer. Most dealers have an idea of an optimal acquisition price for the vehicles they’d like to stock on their lots. One key way to get confirmation that you’re making a good buy is to look at similar vehicle data. For NextGear Capital dealers, it’s simple, free and easy to confirm if you’ve made a good buy right from Account Portal.

Within Account Portal, dealers can check estimated values across a few different valuation methodologies. Dealers can type in a vehicle VIN number, adjust a few other select values, and receive individual estimated Manheim Market Report and Kelley Blue Book values. As an added bonus, Account Portal also offers a NextGear Capital estimated valuation.

More data gives dealers the confidence to buy right, and the extra cash flow flexibility gives dealers the ability to purchase vehicles without using dealership savings. Have questions about how a floor plan can work for your dealership? Apply, contact us or reach out to your local representative.