In the world of independent auto dealerships, it is vital that owners and managers make the most of their time. Every moment spent juggling administrative tasks and managing cash flow could otherwise be dedicated to nurturing customer relationships and strengthening the business. This is where an auto dealer floorplan comes into play as a true game-changer. Floorplanning offers the freedom to prioritize what truly matters: relationships with customers and the growth of the enterprise.
Let’s take a look at some ways that auto dealer floorplan financing options can save you time and improve efficiency at your dealership.
Auto dealer floorplans can reduce administrative burden
Whoever said “don’t sweat the small stuff” must not have been an independent auto dealer.
Buying and selling used vehicles involves tedious, detail-oriented work that demands a huge amount of dealers’ attention and time. Each vehicle a dealer acquires comes with a considerable amount of paperwork and administrative tasks, such as:
- Title management
- Vehicle safety inspections
- Emissions testing and reporting
- Vehicle Reconditioning
While these steps are no doubt important, they can still be a drag on efficiency – especially for smaller businesses. If the dealership is just a single lot, the owner may be managing day-to-day operations. Without a management team in-place or a titles department to offload the work, it’s easy to see how quickly these responsibilities start to eat away at a dealer’s precious time.
Fortunately, auto dealer floorplan finance providers – particularly lenders with a wide range of services like AFC – can help to shoulder some of those pesky administrative tasks.
One good example of this time-saving effect is the lien payoff during a non-auction purchase. Paying liens requires a lot of back and forth, and can tie up time and cash for independent dealers. That’s why at AFC, we offer lien pay services that verify payoff, assist in remitting funds, and follow up on titles on the behalf of dealers.
Auto dealer floorplan financing helps you grow your vehicle inventory
So much of a dealership’s success depends on its ability to source, manage, and grow on-lot inventory. However, the used car industry is fiercely competitive. In a 2023 industry study, 94% of dealers said acquiring used inventory and maximizing used-vehicle margins were their top concerns. With that in mind, any inefficiencies in your inventory financing processes could cause your business to fall behind the pack.
One of the biggest bottlenecks for this process is relying solely on cash to purchase inventory. That’s because it requires large cash reserves on-hand, or waiting to receive payment for ongoing sales before being able to acquire any new inventory. Not only does this limit your business’ potential, it also creates a vicious cycle of chasing revenue, particularly for dealerships in a growth phase or a particularly competitive local market.
A revolving line of credit with flexible terms is a great way to avoid these slowdowns and limitations because it can increase purchasing power, both in-lane and online. An auto dealer floorplan also helps businesses to be more agile, specifically in expanding inventory options when purchasing.
Every auto dealer floorplan company varies in what is approved and accepted (as well as its interest rates and lengths of loan), but often vehicles can be floored from a number of sources, including:
- Dealer-to-dealer trades
- Live and online auctions and dealer marketplaces
- Physical auctions
- Hybrid auctions
- Customer trade-ins
This variability means reduced risk of missing out on profitable deals due to financial constraint or on-hand cash. An independent auto dealer floorplan may even allow owners to use their current on-lot inventory as collateral, borrowing against the inventory and then paying them off as they sell.
Floorplanning vehicles means more time to focus on customers
By leveraging auto dealer floorplan financing, dealers gain more than just financial flexibility. They reclaim their most valuable asset—time. This gift of newfound time can be used for two cornerstones of business growth: making improvements to the car dealership, and cultivating a superior customer experience.
The ability to make those business-minded changes comes from the financial flexibility of auto dealer floorplan lending. Without the need to worry about using cash flow for inventory, dealers are free to reinvest cash back into improving dealership operations. These kind of improvements can come in a variety of different forms, such as:
- Hiring new sales associates
- Building or lot maintenance
- Local advertising or marketing initiatives
- Adding a reconditioning department
- Purchasing new lot space to grow dealership footprint
As the dealership grows in functionality, so too does its ability to meet the needs of its customer base. Thanks to floorplanning, dealers can be confident that the well-stocked inventory allows the team to seize sales opportunities and respond promptly to customer interests and requests.
Instead of being bogged down by administrative tasks, dealers can direct their focus toward their time on the lot and in the office. This strengthens a dealers’ understanding of their customers’ needs, allowing them to deliver exceptional service, and nurture long-lasting relationships in their community.
Get your time back with auto dealer floorplanning from AFC
If you’re ready to stop spinning your wheels and start growing your dealership for the long-haul, it’s time to contact AFC. We’ve been pioneers in the floorplan industry since 1987, and we understand a dealership business model and the unique challenges that dealers face.
To get started, click here to begin your auto dealer floorplan financing application today!
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 is not affiliated with any of the companies mentioned in this article.