It’s no secret that reliable dealer floorplan companies can help dealerships optimize their cash flow, streamline inventory management, and ultimately improve their bottom line. However, with so many options available, it can be challenging to know which provider is the best fit for your dealership’s needs.
At AFC, we are passionate about fueling the entrepreneurial dream in our community. To help make the process a little less confusing, we’ve compiled a list of ten questions to ask AFC or any floorplan provider before signing the dotted line.
What customer support services are offered?
Dealing with inventory financing can be complex, so it’s essential to have access to reliable people when you need help. You may ask about the provider’s customer support offerings, such as online self-service help portals or phone support hours, as these can help you navigate certain challenges that may arise.
However, it’s equally important to ask about the local or presence of the auto dealer floor plan lender. AFC has over 80 branch locations in various areas.
These locations help over 1,100 auto auctions, as well as many auto dealerships and automotive businesses. The locations are spread throughout the US and Canada. It may be beneficial to have a local direct line of communication to a dedicated team with in-depth industry knowledge and a commitment to meet your business needs.
What is the car dealership floor plan application process?
The application process for floor plan companies can vary. Smaller lines of credit require less documentation, while larger lines require more. Once approved, a loan contract will be established. After approval, a loan contract will be created.
Additional documents, like proof of insurance and relevant business entity paperwork, may be required. This paperwork could include an LLP agreement, articles of incorporation, or operating agreement.
In the case of AFC, to apply you’ll need to provide:
- Signed AFC credit application from dealership owner(s)
- Dealer’s license
- Driver license(s)
- Last 90 days of business bank statements
What are the interest rates and fees?
Interest rates and fees can have a significant impact on the overall cost of dealership floor plan financing. It’s essential to understand the provider’s fee structure, including any floorplan and curtailment fees, base interest rate plus the spread, fees for additional services, and late payment penalties.
Comparing these costs among different automotive floor plan financing providers can help you choose the most cost-effective option for your car dealership.
What is the maximum credit line available for the floor plan lending?
The maximum credit line available can vary significantly among floorplan providers and is often based on factors such as the dealership’s financial health, inventory turn times, and credit history. Knowing the maximum credit line available can help you determine whether the provider can support your dealership’s inventory needs and growth ambitions.
BONUS RESOURCE: Read “5 things to consider before your first dealer floorplan”
What types of inventory can be financed with a vehicle floor plan?
Understanding which types of inventory can be financed is essential to ensure that the provider’s offerings align with your dealership’s needs. Some independent dealer floorvplan providers may only offer floor plan financing for specific types of inventory, whereas other lenders like AFC may be able to floor whole car, salvage, powersports, RVs, commercial trucks, and rideshare fleets. By clarifying this detail upfront, you can avoid any potential limitations or restrictions that may impact your inventory management strategy.
When are payments due on floored cars?
Repayment terms can vary among floorplan providers, so it’s important to clarify the repayment schedule, including the frequency of payments, what is due at each curtailment, and any grace periods or payment deadlines. Understanding the repayment terms can help you manage your cash flow effectively and avoid any unexpected financial strain.
BONUS RESOURCE: Read “What is a curtailment?” now!
What is the process for adding inventory to the floorplan?
Easily adding vehicles to a floorplan is a key aspect of managing a dealership’s inventory effectively. Dealers should inquire about the process for adding or removing inventory when vetting a floorplan provider to ensure it aligns with their needs and operational efficiency.
When buying from your primary auction locations (whether physical or digital), it’s important to understand if you’ll have the ability to pay with your line of credit. Additionally, you’ll want to make sure your account is linked to that auction.
When flooring non-auction purchases, make sure to ask providers to help you understand the documentation needed, such as vehicle titles, bills of sale, or inventory lists, and how to submit this information to the provider. Additionally, it may help to inquire about the timeline for processing these requests and how quickly the changes will reflect in a floorplan account.
What digital tools are available to manage my dealership floorplan?
In addition to having people you can depend on to help with your floorplan, it’s important to know what digital tools are available. Self-service tools such as flooring non-auction purchases, releasing titles, making curtailments, and paying off floored cars makes it easy to conduct business on your terms.
It’s important to inquire about the reporting tools available, such as inventory aging reports, sales performance analytics, and payment history summaries, to help you make informed business decisions. Comprehensive reporting tools can provide valuable insights into your dealership’s inventory performance and financial health.
For instance, on the AFCDealer® platform and the AFCDealer® mobile app users have immediate access to the tools needed to manage their entire floorplan inventory. From self-service options to detailed reporting, AFCDealer® is your one stop shop.
How are titles managed on floored vehicles?
Managing vehicle titles is essential to a dealership’s operations, as it ensures each vehicle’s legal ownership is properly documented and transferred to the buyer upon sale. Floorplan providers typically hold the vehicle titles for any financed vehicle, but where they are held may vary.
Titles are either held centrally, and will be overnighted to you when requested, or locally, giving you the ability to pick up titles from your servicing branch when needed. With AFC’s 80+ branch locations, you have the ability to hold your titles locally or have titles held at our state of the art title processing facility in Mesa, AZ.
BONUS RESOURCE: Read “What is auto title management?” now!
What is the inventory floorplan financing audit process?
Every dealer with an active auto floor plan periodically gets audited. An inventory audit is the process led by the floorplan company to ensure the dealership is compliant with the terms of their finance agreement. During the audit, the floorplan company verifies that the dealership’s inventory and documentation match what has been submitted to it for everything currently on floorplan.
It’s important to understand:
- Frequency – How often will I be audited?
- Cost – What fees are associated with an audit?
- Expectations – What is required of me as the dealer, and what are the timelines?
- Reconciliations – What is the audit reconciliation process and how does it work?
BONUS RESOURCE: Read our What Is A Floorplan Audit article now!
AFC is Here to Answer Your Questions About Floorplanning
Since 1987, AFC has been fueling the entrepreneurial spirit of dealers in communities all across North America. If your dealership is looking to grow success with inventory financing, we’re here to help. We are committed to providing transparent and reliable solutions to help you manage your inventory effectively. Our team of experts is available to answer any questions you may have about our services and can help you find the right financing solution for your dealership.
Contact AFC today to learn more about our floorplan financing options and how we can help you drive your dealership’s success.
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.
