How a Millennial Expanded His Dealership Through Technology

Alex BalkAlex Balk, owner of CARite in Fort Pierce, Florida didn’t have a lot of interest in cars growing up. “I wasn’t like a lot of other boys my age. If I saw a car I liked it was because of the color, I wasn’t interested in what kind of engine it had or what the model looked like,” says Balk. But after several years working as an accountant, Balk was ready for a change, eventually deciding that he wanted to open his own dealership. “Before I owned my own dealership, I worked at other car lots who used floor plans through competitors of NextGear Capital, and they all used dated processes or technology that made managing a floor plan difficult. But I still wanted to try using a floor plan when I decided to open my own dealership, so I signed up with NextGear Capital and my relationship managers got us up and running in no time.”

Balk has been a client of NextGear Capital for about a year and a half now and has seen dramatic growth during this time. “Since we started working with NextGear Capital we’ve leveraged our floor plan to revamp our sales, which are up 8 times the amount they were before.” Balk had always been a cash only buyer but quickly recognized the value having a floor plan can bring. “I love to pay cash and I could still pay cash for my inventory, but I’d only have a handful of cars on my lot. It’s like I tell other dealers who’re hesitant about floor planning, wouldn’t you rather sell 200 cars instead of 12? Paying cash can also slow the process down and we would not be able to maintain our turn time of 12 to 14 times a year using cash alone. We’ve been very efficient in achieving a turn time in under 30 days and without the funding we receive from NextGear Capital that wouldn’t be possible.”

As a millennial, working with a floor plan company that uses the latest technology is essential says Balk, “Anyone coming up at my age in the business right now doesn’t have the time or attention span to manage multiple things, so having everything streamlined and in one spot is important. My time is valuable, so I don’t want to work with a floor plan company that takes several days to floor a vehicle when NextGear does the same process in just a few hours.”

Balk is also a self-described Account Portal super user and he’s done several demos on his own for other dealers. “Account Portal is such a powerful and intuitive tool, but you can teach anyone to use it in about 15 minutes. I know a lot of dealers are hesitant to try new technology but when I show them what I can do from my phone they’re amazed. For example, an Account Portal feature I like is Expedited Funding in Rapid Pay. I can scan multiple vehicles and floor them in less than 5 minutes and the money will be in my account by the next day. Another tool that’s extremely handy is Self-Reconciliation, because I can clear a whole row of cars on my lot in just 15 minutes from my phone and then get right back to desking deals. The faster and easier it is for me to do those parts of my job, the more efficient I’m going to be overall.”

He’s also embraced several other products in the Cox Automotive family to help run his dealership. “We use several Cox products because everything talks to each other and it’s cutting edge technology that’s streamlined from top to bottom. Tools like VAuto, give you real-time market figures and knows your competitive set. Our model here is to be a price leader with high volumes and lower margins and without tools that manage that for you, we would have no way of knowing what other dealerships are listing their vehicles for. We also use Central Dispatch to transport our vehicles and since it allows us to track payments so as soon as the gate release is available on Account Portal, we can send it to a transporter and they‘re able to drop the cars off sooner.”

Being able to adapt in a changing world has been one of the keys to his success says Balk. “Most people are kind of set in their ways and part of the success we’ve achieved has been due to our willingness to evolve. I know a lot of dealers still like to visit the auctions in person so they can kick the tires, but that takes time away from your dealership. It would be incredibly time consuming and difficult to purchase the amount of vehicles we want without being directly integrated with online purchasing options like Manheim’s OVE.”

Though Balk relies heavily on technology to run his business, it’s important for him to have easy access to customer service when he needs it. “One thing I’ve found exceptionally useful on Account Portal is the chat function. You’re talking to a well-informed representative who can usually answer any questions you have within a few minutes instead of a robot or someone across the world who doesn’t have the knowledge or information to help you. A lot of other vendors are checked out for the day once its 5 o’clock and that’s not the case when you work with NextGear Capital.”

Despite his newfound love of moving metal, at the end of the day it’s all about family for Balk. “What gets me up every morning is my family. My wife and I have two small children and are about to have a third, so managing a thriving business that’s able to provide for them is what starts my engine each day.” Balk’s also grateful that he found a floor plan company that was willing to work with someone relatively unexperienced in running a dealership. “NextGear Capital took a chance on a new dealership and they were able to provide us with enough financing to be successful.  When I think about the future, the most exciting part for me is we’ve already identified the recipe for success. I plan on expanding my business to new locations throughout the state, using NextGear Capital to duplicate that recipe while I continue to grow my business.”

How Dealer Finance Solutions Can Supplement Cash

Dealer taking advantage of dealer finance solutions

Dealer taking advantage of dealer finance solutionsSome dealers take pride in being cash-only, and we understand that. But what if we told you that supplementing your cash-buying strategy with dealer finance solutions could save you time and benefit your business? By flooring just a few units, you can unlock some of the great benefits that come with a partnership with NextGear Capital. Even a small a line of credit can get you access to many products and services.  

Financial Flexibility 

If you supplement a floor plan to your cash-buying strategy you will find an increase in cash flow. This increase in cash flow can go towards purchasing inventory. Since dealer finance solutions relieve dealers from using their own cash to buy vehicles to stock their lots, dealers can purchase more and sometimes better inventory using their line of credit. With additional inventory, there will be more options for consumers, making sales more likely. In some cases, dealer finance companies offer fewer purchasing limitations on inventory, making it easier to get the make and model of vehicle the you desire.  

Dealer finance solutions go beyond just helping you pay for inventory. Some dealer financing providers offer the ability to guide dealers into making good buys. NextGear Capital dealers have access to Cox Automotive’s Manheim Market Report and Kelley Blue Book valuations from the convenience of our Account Portal app. Dealers can use these resources to reassure they are making good purchases. 

The increase in cash flow will gives dealers the flexibility to use cash for other dealership improvements. An example would be opening a service center or expanding your lot. Enhancements like this can serve as another profit center for dealers that want to find ways to generate more revenue. 

In addition, having a line of credit can get you through a slow month of sales, help you stock-up during a busy time or other situations where you may be tight on cash.  

Saves Time 

Though many dealers initially use their dealer finance solutions for additional cash flow flexibility, a secondary benefit is that many dealers find is the ability to save time on a number of administrative tasks. For example, cash-buying dealers often have to take additional steps and keep track paperwork at auction to ensure their new inventory is properly purchased. With a floor plan, dealers simply bid and put the unit on their line of credit. 

When you purchase a unit and put in on a floor plan, the administrative duties for that unit are taken care of. NextGear Capital offers title and documentation management on every floor planned vehicle. This means that each vehicle placed on your floor plan has its title shipped to our corporate office to be stored in a state-of-the-art facility, The Vault. Upon receipt, titles are scanned then uploaded directly to Account Portal where they can be viewed in full color, 24/7. Dealers have the ability to quickly view and manage titles from any device, even if they’ve been paid off. Taking advantage of title management services can save you a trip to the DMV.

Ready to start supplementing your cash-buying strategy with dealer finance solutions? Apply now, or contact us for more information. 

3 Factors That Determine Floor Plan Costs

Alex Balk

Alex Balk One of the biggest objections dealers have with floor plans is the belief that there are hidden fees associated with floor planning. While this may be true for some dealer floor plan financing companies, NextGear Capital’s fees are transparent. This article will walk you through a general outline of NextGear Capital’s dealer floor plan costs. Please contact our sales team to get a quote specific for your business.  

Floor Planning 

In general, our term plans are broken up into three terms. The first term is usually 60 days. This gives our dealers 60 days to sell a floor planned unit in the first term. If your dealership’s average turn time is more than 60 days, we have term plans to suit you.   

In the first term, you will be responsible for three costs. The first cost is a floor planning fee. This is a flat rate that will be added to your principal balance. Dealer floor plan fees vary slightly depending on credit worthiness and other factors. For example, this fee is around $85 per unit for the first 60 days for some of our dealers. If you do not sell the floor planned unit in the first term, there will be an additional floor planning fee for each additional term.  

Interest 

The next item in determining the cost of a dealer floor plan is interest. NextGear Capital’s interest depends on how much the unit costs and how many days it’s floored. Interest is accrued daily for the number of days the unit is on the floor plan. Interest rate is based on creditworthiness and can vary dealer to dealer. Due to those factors, your exact rate could be more or less than this example. An example of a common floor plan might pay 27 cents per $1000 per day. For this example, a $10,000 unit would cost $2.70 per day on a dealer floor plan.  

Title Processing 

The third cost is a $18 title processing fee. At NextGear Capital, we take the stress out of title management. We offer title and documentation management on every floor planned vehicle. This means that each vehicle placed on your NextGear Capital floor plan has its title shipped to the corporate office to be stored in our state-of-the-art facility, The Vault. Upon receipt, titles are scanned then uploaded to Account Portal. Dealers have the ability to easily view and manage titles from a mobile device or desktop, even if they’ve been paid off.  

Through Account Portal, you are able to release titles so you can get ahold of them prior to a vehicle being paid off. For example, if you have a customer coming in to purchase a vehicle and they need a title to complete paperwork because they just sold a vehicle, you can request a release by simply logging into your account and completing the required steps. 

An easy way to avoid additional fees and ensure all payments are accurate and on-time enroll in AutoPay.  Available via Account Portal, AutoPay allows dealers to focus on daily operations without the worries of a potential missed payment. Enrolling in AutoPay is a quick and easy process, and free for all NextGear Capital dealers.  

If you’re considering NextGear Capital as a dealer floor plan partner please apply, or contact us or your dedicated representative with any additional questions. 

Scott Maybee Named President of NextGear Capital

Scott Maybee

Scott Maybee
-Maybee joined Cox Automotive in 2017 as general manager of Manheim Northstar Minnesota.
-Maybee, a Nissan North America veteran, brings 10 years of automotive finance experience to his new role at NextGear Capital.
-NextGear Capital is the industry’s leading finance provider serving more than 22,000 independent dealer clients.

ATLANTA, Nov. 4, 2019 – Scott Maybee has been named president of NextGear Capital, effective today. Maybee comes to NextGear from Manheim Northstar Minnesota, where he was general manager and responsible for all facets of the Minneapolis-based operation. Prior to joining Manheim, Maybee spent 10 years with Nissan North America and Nissan Motor Acceptance Corporation, rising to vice president of sales operations for Nissan Canada Finance. This move supports the Cox Automotive goal of promoting high-performing talent across its brands.

In his new role, Maybee will report to Mark Bowser, executive vice president and CFO, Cox Automotive. Bowser noted, “At Manheim, Scott successfully established a culture of transparency and rigorous process management while positively impacting employee morale and driving aggressive organic business growth. He and his team ultimately raised sales revenue, customer retention and operating margins.”

Dave Horan, who has served as acting president of NextGear Capital since July, will continue in his role as vice president of finance for the Carmel, Indiana-based company.

Maybee joins NextGear Capital at a time when the company is focused on providing new opportunities for independent auto dealers to profitably operate and grow their businesses. In addition to maintaining a healthy, opportunity-filled workplace for the 800-plus NextGear Capital employees, Maybee and the leadership team will continue to pursue ways to streamline and improve the client experience. As the entire industry evolves, optimizing the digital experience to drive efficiencies in every aspect of the client relationship continues to be a priority for NextGear Capital.

“Scott has the extraordinary ability to provide strategic leadership and drive value for clients,” Bowser added. “When our clients’ businesses are healthy, our business is healthy.”

A law-school graduate of Chicago-Kent College of Law, Maybee holds an MBA in Finance from DePaul University and a Bachelor of Science in Management from Rensselaer Polytechnic Institute, where he graduated summa cum laude. When not at work, Maybee focuses his time on his wife and two daughters, plays recreational hockey, and is a rabid Boston Red Sox fan.

Guide for Dealers New to Auto Floor Planning

Although using your floor plan financing is relatively simple, it can be an unfamiliar process if you’re new to auto floor planning. If you do not have a floor plan, you may want to start by learning about the application process.   

How to Use Your Floor Plan 

Once you complete the full application process, and complete all necessary paperwork, you can begin using your floor plan. You will be able to purchase inventory from most physical or online auctions. Not only do NAAA-affiliated auctions accept most auto floor planning companies, but the lender handles much of the back-door operations, leaving you to just worry about one thing: purchasing inventory. You can search for auctions using our Auction Finder tool.   

On auction day, after checking in at the auction, you will want to check your credit availability with your floor plan lender. Once you are done bidding for the day, take your blocked tickets to the auction check-out, where you will notify the auction which purchased units you wish to floor. From there, your floor plan company will take care of the rest. 

If you’re a NextGear Capital dealer, you are able to use your line of credit for non-auction purchases. We understand the unit you’re after may be in an auction lane or on a neighboring lot, which is why we offer additional inventory acquisition opportunities. Maximize your floor plan with convenient sourcing options such as consumer loan payoffs, trade-ins, off-street purchases, rollovers from other lenders and dealer-to-dealer purchases. Rapid Pay is a tool in Account Portal that simplifies and expedites the non-auction purchase process. 

 Best Practices 

Once you receive a line of credit, it can be tempting to take full advantage of it. At NextGear Capital, we urge our dealers to resist using their full line of credit. We recommend a dealer’s budget for stocking inventory to be a mix between cash and floor plan. A good rule of thumb is flooring 70 percent of your inventory and the other 30 percent should be cash.   

We also offer multiple formulas to help dealers. Not sure how many vehicles to stock or how many sales you should be making based on stock? Check out these auto floor planning formulas.   

Get Familiar with the Technology 

Most auto floor planning companies have a technology component. For NextGear Capital dealers, this is Account Portal.  

Account Portal was built with our busiest dealers in mind. From an optimized mobile experience to the ability to clear audits with just a few clicks, Account Portal is your one stop shop to managing your floor plan.  

We now offer a series of Account Portal tutorials so you can get the most out of our tools and technology!  

Stay In Touch 

A floor plan company will want to know about the health and wellbeing of a dealer’s business. Not communicating potential issues to your dealer floor planning provider can make it harder to remedy potentially preventable issues. Not able to make a payment on time? If so, you should get in touch with your floor plan financing company. If you are proactive and honest, your provider will be more likely to work with you to resolve any issues or problems that you encounter. Dealer floor plan providers also appreciate hearing what’s going right as well as any trouble you may be having with their auto floor plan.   

 It is also beneficial to follow your floor plan provider on social media to stay up to date on what’s going on. Most floor plan providers offer special promotions from time to time. NextGear Capital tends to run promotions seasonally and share information about the promotions on social media. Promotions can offer great terms, making it even more affordable to floor plan. In addition, helpful information and industry news are shared on social media. Follow NextGear Capital on Twitter and Facebook. 

 If you’re considering NextGear Capital as a dealer floor planning partner please  apply, or  contact us with any additional questions.  

Dealer Spotlight: How a Floor Plan Grew a Family Dealership

Chris Tingler and his family

Chris Tingler and his familyIf you’ve ever needed to purchase a vehicle near Covington, Virginia, you’ve probably heard of Chris Tingler and Car Shop Inc. Tingler’s family has owned and operated the independent dealership since 1995. “My father always owned a car lot and I started helping him at a very young age,” says Tingler. “I started out by washing cars and by the time I was about 12 or 13, I was going to the auctions with him. I’ve always loved going to the auctions and being around people so I can hear their stories. I’ve even helped out as a driver before.”

After observing the way his father ran their family’s business, Tingler learned the importance of honesty and its integral role in building a good reputation throughout a community. “We treat our customers fair because without them we wouldn’t be here. They’ve got faith that if they buy a car from us, there will be no hidden costs. They know they’ll be taken care of because if you don’t take care of your customers, they won’t take care of you.”

After years of working under his father, it’s no surprise that Chris was more than prepared to take over the family business after his father’s passing.  Tingler was focused on continuing the legacy his father had created, but also wanted to make some changes. It seems fortuitous that at this time Tingler received a visit from Bruce Paxton who explained how financing with NextGear Capital could help him take his business to the next level. “My dad was old school and always used his own money, I was looking to try something different and that’s when I started floor planning with NextGear Capital.”

Tingler was still a little skeptical at first but that quickly changed when he saw how big of a difference having the extra cash made. “Other than the financing, I didn’t do anything different than what I’ve done for the past 25 years. You always hear negative things about fees and the requirements needed for floor planning and none of it was true. I’ve never had to pay a curtailment because our turn times are so good, and cash sales are up 20% on the month because we have more inventory options for our customers. We can buy whatever we need, when we need it, and we’ve been able to buy nicer vehicles that are newer and have less miles on them.”

Having a good support system behind him also helped him succeed when he started out, “I have all the trust in the world in my NextGear reps Mike Nemeth and Bruce Paxton. They help me anytime I need it, 365 days a year.”

His reps also encouraged him to use tools like vAuto to help run his business, even though technology was something he’d shied away from using in the past. “Tools like vAuto lets us see what the market is doing in our area and what type of inventory is selling and not selling. Having access to this type of information has been a game changer.”Chris Tingler

Chris has become a big fan of Account Portal since it provides him with easy access to view account information, manage his inventory and quickly track down titles for pending sales. “Getting a title from NextGear Capital is so easy and convenient, even if the title is for a vehicle that’s already been taken to an auction. We used to keep titles at our lot but it’s nice knowing that they’re secure in the NextGear vault.”

Car Shop Inc.’s showroom features a small automotive themed museum with collectables, making it a popular spot with Covington locals. So, having a good-looking dealership is also important. “Since NextGear has allowed us to free up more money without negatively affecting our cash flow or impacting the amount of inventory we’re able to carry, we’ve been able to polish our business. Several improvements have been made like resurfacing the lot, purchasing new equipment, making renovations to the dealership and updating our technology. I probably could’ve done these things down the road, but it would’ve taken another 5 to 10 years.”

Despite all these changes, some things never change, including Tingler’s love for buying his vehicles at the auctions, “I very seldom buy my inventory online because I feel more comfortable seeing the vehicles in person. I usually go to the auction every other week, but honestly I would go every week if it didn’t take me away from my home and the office too much.”

Tingler’s experience at the auction has changed though since he started using NextGear. “The checkout process is so much simpler now. When I take the paperwork up to the desk, I tell them to just put it on NextGear. I don’t have to sign anything, and I just hand them the paperwork and leave. I’m also getting more attention at the auctions because even though we’re still a small fish in a big sea, both the auctioneers and sellers know I’m there to buy several vehicles and that’s helped me to build and grow my relationships.”

Now that Tingler’s success is so well known throughout the dealer community, he’s started having other cash only buyers reach out to him for advice. “About a month ago, I had a friend ask me how I liked working with NextGear and having a floor plan. They’re just like us and have been in business for years. I told them to start small and see how much they can handle. The horror stories are all people who don’t know how to manage their money. What works for one dealer, might not work for another and that’s where NextGear Capital can help you figure out what will work best for your business.”

Even when pressed, Tingler can’t think of one negative thing he’s experienced since he started floor planning, “Since I’ve been using NextGear the only regret I have is that we didn’t start using them sooner. We’ve seen a lot of other independent dealerships pop up in our area and within 6 months to a year, they’re gone. We’ve also seen a lot of franchise dealers come and go. We’re still a mom and pop dealership, we don’t have high pressure tactics and we’re still here, outselling everyone else in the area.”

Despite all his success the most important thing for Tingler is to keep his dealership in the family. “I wish years down the road my kids will be able to take over, or at least have the opportunity to do so and it won’t be as hard on them, as it was on my dad and me.” Tingler adds, “The table is set, we’ve done the hard part and the opportunity will be here if they want it.”

How to Partner With Us: Application Process

Dealer starting an application

Dealer starting an applicationWhether you are just starting out, or looking to grow your business, NextGear Capital is here to help. With a dealership floor plan, it is likely you will be able to find the capital needed to stock your dealership and keep cash on hand. In this article, we will guide you through the first steps in beginning a partnership with NextGear Capital.   

Before you fill out a NextGear Capital application, it’s imperative that you have some credit. Specifically, you should have a history of utilizing and repaying debt. Bad credit and hiccups on credit history aren’t always deal-breakers, but they will likely reduce the amount for which you qualify. Additionally, there is a good chance that credit issues will have a negative impact on the pricing structure for your first dealership floor plan. The good news is that over time, with good performance and the adherence to the terms and conditions, it is possible to eventually overcome these setbacks. 

So, you’ve decided to start a dealership floor plan with NextGear Capital. The next step? You’ll get started by filling out an online application. To view the credit application for NextGear Capital, click here.  

Once you click the link, you’ll be redirected to the application. The first screen prompts you to choose your Country and preferred language. Once you’ve made those selections, the application will appear in your preferred language. The first set of fields require your contact information. This includes first/last name, Email, phone number and preferred method of communication. Please enter your cell phone or direct line, not your business number. You will be asked for your business number later in the application. It’s important to note that we strive to accommodate your preferred method of communication as best we can, but some phone calls and emails may be necessary. 

The next section that needs to be completed is your business information. In this section, the first question is asking if you have a Dealer License. If you have a Dealer License, great! If you do not, you will not be able to move forward in the application process. To obtain a Dealer License, you will need to contact your local BMV. In the meantime, you can contact our sales team with any questions or a time frame on when you might be getting your Dealer License.   

Now it’s time to enter the name of your business and phone number. After you’ve filled in that information, take a look at your Auction Access card and enter your Auction Access number in the appropriate box. If you don’t have the number available at this time, you may continue with the application as it is not a required field. After that, all that’s left is filling in your business address! 

Once you hit continue, you’re a step closer to having a dealership floor plan! A NextGear Capital representative will contact you within two business days regarding your application and will guide you for the next steps. During this call you should be prepared to answer more questions to fully complete the application.