Tony Souza has been serving AFC floorplan customers for nearly two decades, spending the last five years as Regional Director of our West Coast team. Tony sat down with our team and shared his top takeaways for independent dealers including his perspective on strategies independent dealers can use to protect cash, manage inventory and make financing work harder for their business.
He believes every unit on a lot represents more than metal—it represents cash, carrying costs and a future opportunity. Dealers best positioned to succeed are those who protect liquidity, make disciplined inventory decisions and use financing strategically.
More Ways to Source The Right Inventory
When it comes to sourcing inventory, Tony challenges one common misconception: floorplan financing applies only to vehicles purchased through physical auctions or digital marketplaces. AFC can help eligible dealers floorplan customer trade-ins, private-party purchases, dealer-to-dealer transactions and units with lienholder payoffs—expanding the opportunity for strategic financing.
Tony believes this flexibility can matter as local retail demand changes. In his view, a dealer who can acquire a desirable vehicle directly from a consumer or private party without immediately pulling from operating cash has more ways to stock what customers are looking for. The objective is not simply to carry more inventory; it is to carry the right inventory while keeping capital available for the rest of the business.
A Strategic Tool For Dealers at Every Stage
Tony encourages dealers to understand that a floorplan strategy is not reserved for large operations. Dealers do not need to reach a specific lot size or monthly sales volume before exploring if floorplan financing is a good opportunity for their dealership.
Whether a dealership is floorplanning its first couple of units or managing inventory across multiple locations, Tony’s foundational principle is the same: keep cash accessible for expenses and opportunities that cannot wait. Transportation, reconditioning, payroll and unexpected repairs are examples of needs that require liquidity.
A floorplan can help a dealer build business credit and grow at a pace that supports a healthy operation. He described it not as a reward for becoming a larger dealership, but as a strategic tool that can be part of the plan from day one.
Manage Aging Inventory by the Calendar
Tony sees aging inventory as one of the costliest challenges dealers can face. Holding an aged unit in the hope of a full-margin retail sale can be tempting, but the eventual discount is rarely the whole cost.
Once a vehicle has been sitting for 60, 90 or more days, scheduled principal reductions—often called curtailments—along with interest and holding costs can steadily reduce front-end margin. By the time a unit is discounted or wholesaled, profit may have disappeared weeks earlier.
Rather than waiting for a “retail hero,” Tony encourages dealers to manage every unit by turn time and clear calendar milestones:
- At 30 days, review pricing, merchandising and online engagement.
- In 45 days, change the marketing approach or sales strategy.
- By 60 days, make a deliberate decision to retail it promptly or move it through wholesale.
Dealers should know their approximate daily cost to hold a vehicle and act before an aging unit becomes a cash-flow problem. Re-pricing, refreshing the marketing or wholesaling a slow-moving unit can free capital to reinvest in inventory with a stronger likelihood of turning quickly. As Tony put it, “when the full cost of holding a unit is considered, fast nickels can beat slow dimes.”
A dealership’s financial warning light may come on when average inventory age rises above 60 days while operating cash reserves shrink. When curtailments draw money from the bank faster than retail sales replenish it, cash flow can quickly become strained. Managing inventory by the calendar helps protect margin, preserve liquidity and keep capital from becoming trapped in units that are no longer earning their place on the lot.
Find the opportunity already inside the dealership
Tony highlights that dealers do not always need to find more buyers to improve their profitability. Often, part of the opportunity is already within the dealership.
As one example, he pointed to special float sales from a floorplan vendor, where eligible purchases may have a particular set of terms. He also encourages dealers to speak with their AFC representative about AFC’s Principal Pass program, which may allow eligible dealers to skip their first principal reduction and keep more operating capital in the bank.
He also notes that consistently evaluating back-end products can also contribute to a healthier operation. Offerings such as service contracts and GAP insurance coverage may help dealers strengthen back-end profitability while providing customers with additional options.
More than a line of credit
When it comes to working with AFC, Tony emphasizes that financing is only one part of an AFC relationship. He highlighted the value of local account teams who can work with dealers on portfolio health, title-management support and regional market conditions. In his view, that on-the-ground guidance can help remove title bottlenecks, streamline operations and improve turn times.
Tony’s blueprint for dealership success is clear: protect liquid cash, manage inventory by the calendar and treat your floorplan as a strategic growth engine.
* Disclaimer: Dealers should consult their own advisors to make independent business decisions regarding floorplan financing. The opinions expressed in this article are those of the individual interviewee and do not necessarily reflect the opinions, policies or positions of AFC. AFC does not verify the accuracy of the information provided by the interviewee in this article and is not responsible for any errors or omissions. “AFC” refers to Automotive Finance Corporation, Automotive Finance Canada Inc., and AFC Cal, LLC in their respective jurisdictions.
Principal Pass is subject to eligibility requirements, account terms and program availability. Additional restrictions may apply.
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