Floor plan financing can be invaluable to independent auto dealerships—but it comes with a need for snappy sales. AFS explains why.
IRVINE, California, October 11, 2017 (Newswire.com) - Most independent auto dealerships do not own all the cars on their lots; in fact, they acquire most of them through credit lines. This is known as floor plan financing, and is an essential way for dealerships to grow, offering them flexible financing to keep their inventory full. With this opportunity there comes a responsibility for quick sales time. In a new statement to the press, floor plan financing company AFS explains why this is the case.
“The important thing to remember about floor planning is that you’re borrowing money to purchase cars from a wholesaler or from an auction—and as such, you’re paying interest on those cars,” says AFS. “This is really the best way to grow your dealership, but it does mean you have to move inventory quickly.”
Indeed, the average dealership may pay $10 or $15 per day per car—and while that’s ultimately a very small price to pay for inventory, it can become problematic if months go by and the cars just don’t sell.
“Our advice to dealerships, first and foremost, is not to bite off more than you can chew,” says AFS. “Be disciplined and responsible in your approach to floor plan financing, and don’t buy more inventory than you can realistically expect to sell.”
The company also recommends having a plan in place to deal with stalled sales and old inventory. “Have a procedure for moving older cars quickly, even if it’s as simple as marking them down,” says AFS. “It’s vital to be proactive in minimizing any ongoing losses.”
The bottom line for independent auto dealers? Floor plan financing presents an invaluable opportunity for smart, savvy growth—but it comes with a need for efficient sales processes.
“Be ready to move quickly, and to sell your inventory before it starts gathering dust,” comments AFS. “With a strategic approach, floor plan financing can help you build out your dealership and reach new levels of success.”
AFS provides financing services to dealerships throughout California, allowing independent dealers to build up their inventory without tying up all their finances. The company sees itself as a strategic partner and invests in the ongoing success of each dealership it works with. More information about the company and its services can be found on the Web at www.useafs.com.
ABOUT:
AFS is a financial services company that works with independent auto dealerships throughout California, providing a full range of offerings that include credit lines, floor planning, and beyond. AFS can also provide dealerships with access to top-of-the-line marketing and legal services. More information about the company can be found online at www.useafs.com.
Source: Auto Finance Solutions (AFS)
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