Long-term floorplans — those with terms more than 90 days — offer dealers more flexibility with how they purchase and hold on to inventory, making them a more cost-effective option for some dealers. But it’s important to know when a long-term floorplan is the right decision for your business. That’s why we’re here to help break down three signs that a long-term dealer floorplan may be the right choice for your business.
Click here to discover three signs a short-term floorplan may be right for you!
1. You’re a Specialty Dealer
For a majority of specialty dealers, having a short-term floorplan just won’t cut it due to the inherent nature of their business model. Naturally turn times can be longer if you’re selling RVs or boats, so having extra time to make a sale before payment is due can significantly reduce floorplan costs.
Having the opportunity to maximize time before payment is due also provides more flexibility in terms of what you do with your inventory as a specialty dealer. For instance, long-term floorplans can be particularly beneficial for watercraft, RVs and powersport vehicles, which often experience seasonality and longer turnover times.
AFC also offers tailored financing programs for specialty vehicles, offering you the flexibility to manage your inventory according to your unique business needs.
2. Seasonality Impacts Your Inventory
When selecting the appropriate term length for your floorplan, it’s important to consider factors that influence your inventory turnover, such as seasonality. If you’re living in an area where seasonality impacts your inventory movement, a long-term floorplan may work best for your business needs.
Time is money and having a long-term floorplan means more time before payment is due which is ideal if you’re a dealer who purchases inventory in the “off season”. By maximizing this timeframe, you’re able to fill your lot during the off-season and capitalize on selling this inventory when demand increases. Long-term floorplans are also ideal if you’re a dealer who lives in a place where your customer’s purchasing habits are impacted by the weather.
3. You Purchase From Salvage Auctions
Dealers who source their inventory from salvage auctions and other sources of salvage inventory usually require more reconditioning time before they can sell a vehicle. The longer turn times that you can expect with salvage vehicles mean that a traditional floorplan can be less cost effective. With a longer term floorplan you have more time to get the vehicle frontline ready before payment is due. Not all floorplan financing companies offer financial services for specialty vehicles, but AFC offers an array of specialty financing programs for salvage vehicles.
Have Questions? We’re Here to Help!
If you have any questions about the application process or how to get started, feel free to visit our Contact Us page. Simply fill out the short form, and a member of our team will reach out to you shortly.
Prefer to speak with someone directly? Contact us at bdccorporate@autofinance.com or 1-888-335-6675, and we’ll be happy to assist you.
* Disclaimer: Descriptions of AFC floorplans are for illustrative purposes only. All applications are subject to approval by AFC and the terms of AFC floorplan financing are subject to a final written agreement acceptable with AFC. AFC does not guarantee any results for floorplan financing and examples are for illustrative purposes only. Dealers should consult their own advisors to make independent business decisions regarding floorplan financing. “AFC” refers to Automotive Finance Corporation, Automotive Finance Canada Inc., and AFC Cal, LLC in their respective jurisdictions. All California transactions are through AFC Cal, LLC. California loans will be made pursuant to Department of Business Oversight California Finance Lenders License. Canadian transactions are through Automotive Finance Canada Inc.
