Do Auto Dealer Pay Floor Pan Fees

Let s say you make a profit of 3 000 per car sold.

Do auto dealer pay floor pan fees. You may obtain a dealer floor plan from a bank or there are many dealer floor plan providers listed by clicking here you may also go to google bing or yahoo and type in dealer floor plan providers. 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. Make sure it agrees with what you found on the car pricing sites. Oem s depend on their dealerships so they offer better rates.

These loans are made against a specific piece of collateral i e. A dealer rarely pays cash. Whether you buy your vehicle new or used you ll have to pay a fee to register it in your state. Instead the dealer borrows money and the loan actually an open line of credit is called a floorplan.

Though i m an independen. A dealer floor plan is a loan for your vehicle inventory. Fees can add up to over 1 000 throwing off all your budget calculations. It is a plan to finance the vehicles on your floor.

Knowing the fees is important when you end up comparing similar deals. Some dealership groups such as group 1 automotive also have swaps in place to guard. 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. Ask if the dealer charges advertising fees dealer prep or other fees.

That reduces the contract in transit time so the dealership gets the cash to pay floorplan cost more quickly. So if a car sits on the lot for 30 days the dealer will be charged 150 300 in interest payments. 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. Just about every dealership will help take care of this for you which if you ask us is way better than waiting in line at the dmv.

A dealer pays for a car as soon as it s received. These floor plan finance formulas incorporated with your turn time can help to make or break your dealership s profitability. Say 150 9 compounded daily. Private fiance corps are the most expensive.

There s no getting around this government mandated fee unless you don t plan on driving your new car. An auto rv manufactured home etc. Dealer dealer floor plans. Floor plan financing is a type of short term loan that is paid off in 30 to 90 days the time it normally takes to sell a car.

You ll often hear dealers talk about floorplan interest or. Dealer floor plan financing frequently asked questions for borrowers and lenders what is floor plan financing.