Independent dealers are sourcing vehicles from more places than ever before. From customer trade-ins to dealer-to-dealer purchases, off-auction inventory can help you find opportunities to stock the vehicles your customers are looking for.
But using cash for every purchase can quickly limit your flexibility. That’s why more dealers are looking for ways to finance off-auction inventory while keeping dealership inventory cash flow available for other business needs.
Whether you’re exploring trade-in inventory financing or dealer-to-dealer vehicle financing, having the right financing strategy in place can help you move on inventory opportunities with more confidence.
Here are three common ways dealers finance off-auction inventory without paying cash upfront.
1. Flooring Customer Trade-Ins Instead of Paying Out of Pocket
Customer trade-ins can create valuable inventory opportunities, especially when you already know the vehicle history and local market demand. But purchasing and holding trade-ins with cash can quickly reduce the working capital available for other parts of your dealership.
That’s why many independent dealers use trade-in inventory financing to help floor eligible vehicles instead of paying upfront out of pocket.
Financing trade-ins can help you:
- Keep more cash available for operations and reconditioning
- Hold on to desirable inventory instead of wholesaling it
- Add inventory to your lot without limiting buying power
AFC can help dealers finance eligible trade-in inventory so you can continue sourcing vehicles without relying solely on available cash.
2. Financing Dealer-to-Dealer Purchases to Expand Inventory Options
Many dealers also source inventory directly from other dealerships when specific vehicles become available outside the auction lane or online inventory sources.
Dealer-to-dealer purchases can help you:
- Find inventory faster
- Fill gaps in your inventory mix
- Source vehicles that may be difficult to locate at auction or online
But these opportunities often require quick decisions and immediate access to funds.
Having financing available for dealer-to-dealer purchases can help you move on inventory opportunities without pulling cash away from daily dealership expenses. AFC supports eligible dealer-to-dealer purchases, helping you source inventory from additional channels with more flexibility.
3. Financing Eligible Off-Auction Purchases Through Your Floorplan
Some dealers use available cash for every off-auction purchase. Others use floorplan financing to help preserve available cash and maintain healthier dealership inventory cash flow.
Instead of tying up cash in every vehicle purchase, financing eligible off-auction inventory through your floorplan can help you:
- Keep cash available for payroll, transportation and repairs
- Purchase multiple vehicles at one time
- Respond more quickly to inventory opportunities that you don’t want to miss
- Balance inventory acquisition with other business expenses
AFC helps simplify the process by supporting eligible off-auction purchases and providing tools through the AFCDealer® platform, along with assistance for title coordination and lienholder payoffs.
Finance Off-Auction Inventory with More Flexibility
Knowing how to buy cars without using cash as a dealer can help you expand your sourcing opportunities while protecting your dealership’s cash flow.
Whether you’re flooring customer trade-ins, purchasing vehicles from other dealers or financing eligible off-auction purchases through your floorplan, AFC can help you source inventory with more confidence beyond the auction.
Talk to your local AFC representative to learn more about financing your next off-auction purchase.
* Disclaimer: Descriptions of AFC floorplans are for illustrative purposes only. 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.
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