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How can floor plan financing work for used car dealers

To the Editor:

I appreciate all the ways you explained what floor plan financing actually is. It can be a confusing subject and one that many used car lots are investigating to determine its potential. You made it simple to understand the benefits of floor plan financing and also pointed out some reasons it might not work. 

However, there was one other perk worth mentioning that I didn’t see in the article. With the right floor plan in place, the dealer won’t need to fill out so much paperwork at the auction every time a purchase is made. The process is streamlined, ensuring that the dealership spends less time waiting and more time preparing the vehicle for sale.

Additionally, some floor planning finance companies offer additional services to the dealership beyond capital for the vehicles. These providers help alleviate the administrative needs of the dealer. As an example, some companies will bundle the financing with records management, collateral protection, mobile account management tools, and title services. All of these added perks further save time and make the package more appealing.

The key to getting the right floor plan in place is to shop around. Companies are going to bend over backward to get the dealership’s business, giving you the upper hand in the negotiations. Be clear about what terms you need and start negotiating. Even a small percentage point of a difference in terms can mean huge profits when the cars sell. 

Milton Burroughs

Edited for length and clarity

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