Thad Sykes and Mo Zahabi discuss Digital Retailing

Thad Sykes and Mo Zahabi discussing digital retailing

Recently Thad Sykes, Associate Vice President of Sales at NextGear Capital, sat down with Mo Zahabi, Senior Director of Product Consulting at VinSolutions to discuss what Digital Retailing is and how dealers can integrate it into their sales strategy. This video is the first in a new monthly series that will focus on providing dealers with expert feedback on ways they can support their business while finding their way forward in an evolving industry.

Due to the pandemic, car buyers are spending more time online before they reach out to a dealership with interest in a vehicle. For some independent dealers, digital retailing could mean adding a chat feature on their website or providing an online calculator. Thad Sykes and Mo Zahabi discuss what true digital retailing is and how it is defined in the dealer space. They say digital retailing is a valuable tactic for engaging and building trust with consumers. In the video they also touch on the power of the Cox Automotive network and how their tools and resources can benefit dealers. If you found this video helpful, check out our blog titled, “5 Ways Digital Retailing Can Improve the Car Buying Experience” for more tips on making digital retailing part of your business strategy.

Consider using VinSolutions’ automotive software solutions to integrate your systems and tools to deliver a single view of the customer across your dealership, so you can maintain relationships and make more repeat sales. Car dealers rarely engineer CRMs, and that’s the problem VinSolutions fixes. For more information, visit https://www.vinsolutions.com/.

For inventory financing needs, NextGear Capital can help. Contact us or apply for a floor plan today!

 

5 Ways Digital Retailing Can Improve Buying

Dealer Imran Ahmed using digital retailing

Dealer Imran Ahmed using digital retailingWith the convenience and safety that comes from shopping online, it’s no surprise that used car buyers are increasingly gravitating to dealerships who offer digital options. Whether it’s viewing inventory or completing their car purchase virtually, car shoppers are engaging with some form of digital retailing 50 to 60 percent of the time. Independent dealers should take note and look into creating a positive, intuitive online experience for these customers. Here are some tips for using digital retailing to create that better customer experience.

  1. Create an Intuitive Website – If you’re not posting inventory on your website, you’re missing out on a huge opportunity. On average, customers spend 64% of their shopping time online before coming into a dealership. Make sure that you’re providing multiple photos and detailed information on each vehicle and that you’re using your dealership’s social media channels to showcase your inventory.
  2. Embrace Customer Self-Penciling – If you really want to hone in on getting your inventory in front of the right customers, you should include an online calculator on your website. When car buyers are interested in purchasing a vehicle, they want to make sure they’ll be able to afford the monthly payments. Making a tool that helps calculate payment information easily accessible to potential customers will help them understand what they can afford before coming into your dealership.
  3. Make the Approval Process Easy – Customers are always looking for ways to save time, so allowing them to complete as much of the paperwork digitally beforehand can help set you apart from your competition. Providing them with online credit applications and paperwork they’re able to fill out electronically will save you both time and create an added layer of protection against sensitive information potentially ending up in the wrong hands.
  4. Adapt to Your Customer’s Requests – Even if you make your entire sales process digital, not all car buyers are going to want that kind of experience. While they may love the convenience of shopping online, when it comes time to decide if they’re ready to make a purchase, they may still want to come into your dealership and test drive the vehicle. It’s important to remain flexible to everyone’s preferences to cast the widest net possible.
  5. Focus on the Final Touches – Whether it’s delivering a vehicle purchase to their home, providing them with a follow up online survey or offering them a discount on their first maintenance appointment, make sure you’re providing a high level of customer service through the end of the sales process. While they may not require your assistance once the purchase is complete, this may be your last chance to leave an impression, so make sure it’s a positive one.

Even if the majority of your business is still completed at your dealership location, by creating a convenient online sales experience for your customers, you’re going to attract more potential serious car buyers. By focusing on creating a streamlined approach with a high level of both online and in-person customer support, you’re putting your dealership in the best position to capture as much business as possible, regardless of the consumer’s buying preferences.

Understanding Automotive Floor Plans

Chris Tingler is a dealer who uses an automotive floor plan

Chris Tingler is a dealer who uses an automotive floor planLet’s talk floor plans… and no, not the kind of floor plan an interior designer would use. Automotive floor plans are designed with independent auto dealers in mind. In this article you’ll learn the basics of floor plan financing and how it can work for your dealership.

What are automotive floor plans?

The terms “floor plan” and “floor plan financing” get thrown around frequently in dealership and auction circles and are often a preferred form of financing for independent dealers. But what are they? Automotive floor plans act similarly to a credit card. A floor plan financing company extends a line of credit to an auto dealer. Dealers can then use their floor plan line of credit to purchase inventory from auctions and other inventory sources. If a dealer purchases a car on a floor plan, takes it back to their lot and it doesn’t sell within a contractually determined number of days, dealers are charged a small fee. As a dealer sells their inventory, they pay back the original loan.

How are floor plans different than using cash?

If you’re a dealer who has shied away from using floor plan financing because you take pride in being cash-only, you could be missing out on some of the great benefits floor planning has to offer. Using floor plan financing doesn’t always mean you need financial help.

Automotive floor plans are also a great option for the dealer who is just starting out. With a floor plan, you can stock your lot with vehicles without having all your dealership cash tied up in inventory.

With an automotive floor plan, the initial investment needed to buy a particular unit is a fraction of the vehicle’s actual purchase price. As soon as that vehicle sells to a customer, floor planning dealers can see their profits immediately and pay back the initial value of the loan plus interest and fees.

Trying to convert cars back to cash is a hassle and a drain on you with investments in time, travel and paperwork. Floor planning can help you finance nearly any type of remarketed inventory, freeing up cash flow for the things that make the most impact on your business. You could use that cash to open a service center, make lot improvements or advertise.

Dealers that use automotive floor plans to purchase inventory have access to products and resources that can alleviate some time and effort and improve efficiencies with administrative tasks. Floor planning dealers can purchase inventory with the confidence that the auction and seller will be properly compensated. In addition, title management is handled on the dealer’s behalf, saving time and effort for dealers.

How do I get started?

It’s easy to get started with a dealer floor plan provider. In most cases you can apply for funding without leaving your dealership. Most companies that specialize in financing for independent dealers, like NextGear Capital, have online applications. The company will review the application and decide if you qualify for a line of credit based on the information provided.

At NextGear Capital, our purpose is to provide financing for independent dealers. To get the buying power and resources you need, contact us.

7 Tips for Managing Dealership Finances

Dealer Kathy Ward is managing her finaces with the help of NextGear Capital

Dealer Kathy Ward is managing her finaces with the help of NextGear CapitalIf you’re a new or first-time business owner and don’t consider yourself a whiz when it comes to accounting, you may feel overwhelmed when thinking about managing your dealership’s finances. Fortunately, by following some simple best practices, you can feel confident that you’re setting up your independent dealership for success. Here are some tips on how to successfully manage your small business’s finances:

  1. Create a Financial Game Plan – Before doing anything else, you need to identify your projected cash flow, expenses and goals so you can create a realistic picture of what it’s going to take to run your business each month. This will help you make informed decisions down the road while preparing your business for future obstacles you may encounter.
  2. Make Your Budget Accountable – Just like running a household, you should create a budget for your business. It doesn’t have to be complicated, but should be able to help you determine whether or not larger expenditures are paying off. If you don’t know where to start, try preparing a draft budget and make adjustments as needed. By having a budget in place that’s tailored to your dealership, you’ll not only create access to funds for expenses like advertising, but can prepare yourself for unexpected expenses that may come your way as well.
  3. Separate Personal and Business Expenses – Your business account should not be tied to your personal finances, so it’s important to keep track of your expenses to prevent them from getting mixed in together. Make sure that you have a separate bank account and credit card for your dealership. By not keeping the two divvied up and accounting for expenses separately, you run the risk of your personal credit score and assets being impacted!
  4. Know the Basics of Accounting – While you don’t need to get an accounting degree to manage your finances, you should have a rudimentary knowledge of how it works. Make sure that you thoroughly understand how to read a financial statement and have a basic understanding of terms like accounts receivable and payable. It’s easy to educate yourself with free online tutorials on accounting basics from websites like Accountingverse.
  5. Keep Tabs on Your Invoicing – Make sure you’re collecting payments and sending out invoices as soon as possible after a transaction takes place. Set short payment terms and always follow up on any unpaid invoices as soon as possible. Too much cash tied up in unpaid invoices can lead to cash flow problems. However, if you have a floor plan, you can use tools like Account Portal to keep track of when your payments are due to help ensure you always have enough cash on hand.
  6. Develop Good Habits – From the beginning, you should establish what your financial processes and procedures are to ensure you’re safeguarding your assets. Start by blocking off time each month to review and make any needed adjustments to your financial information. Not only will you become more familiar with how everything works, but it can help you detect any issues like fraud before they get out of control.
  7. Ask for Help when Needed – As an independent dealer and business owner, you shouldn’t be afraid to ask for help when needed. There’s a network comprised of thousands of dealers just like you all over the country and numerous associations that are available for support and insights when you needed. If you’re unfamiliar with things like taxation procedures or have questions about your accounting, you should consult an expert in those areas. Sometimes, a lack of knowledge can cost you money, so don’t be afraid to reach out to a third party when needed.

You don’t have to be an accounting expert to keep your dealership financials secure but it’s crucial to keep track of all your income and spending. By taking the time to do some careful planning and educating yourself as much as possible, you’ll be on track to setting your dealership up for success while laying the foundation for prosperity and growth in the future.

Not a NextGear Capital dealer? Contact us or apply today!

 

Online Penciling: A Leg Up on the Competition

Dealer using online penciling

Dealer using online pencilingMost independent dealers know that creating a trustworthy relationship with their customers is a key component to getting them to purchase a vehicle. But what dealers may not realize is that they don’t need to be face-to-face with the customer to start establishing that relationship. Knowing that the average time it takes to purchase a vehicle is 3 hours, it’s important to keep in mind that car buyer satisfaction starts to decline after the first 90 minutes a customer spends on your lot. Dealers can combat this dissatisfaction while jump-starting the buying process through digital retailing solutions like online penciling which can be done before the customer comes into the dealership.

While you’ve probably heard the term online or self-penciling, you might not know exactly what it is. Online penciling is the ability for car buyers to populate and modify information in an online payment calculator, providing them with more clarity into how factors like their down payment or credit score are going to impact their ability to purchase a vehicle. Essentially, online penciling will provide the customer with the right expectations on what type of vehicle they can afford, while also providing transparency into the buying process.

Research shows that when a car shopper sees a price online, they’re more likely to trust that number than one that comes from a piece of paper. Since 90 percent of customers are more interested in what their monthly payment is going to be versus the total cost of a vehicle, it’s important that incentives, offers, taxes and fees are built into the monthly payment they see in the calculation. This can also benefit the dealer because consumers are more likely to be honest with provided information like the condition of their trade in and credit score since they want to have an accurate assessment on whether or not they’ll be able to afford a vehicle.

When surveyed, car buyers said that one of the top pain points for them is negotiating the purchase or lease price of a vehicle. Not surprisingly, hashing out financial information is a contributing factor to the amount of time they spend at a dealership. When customers have access to an online calculator on a dealership’s website, they can look at specific vehicles and make adjustments to things like their down payment and loan term length, without having to work in person with your dealership’s financial office, making for a more efficient process . By providing them with a tool to start the sales process while they’re browsing inventory on your website, you’re creating a convenient experience for them while also setting yourself apart from your competitors.

While you may feel that tactics like online penciling are going to hinder the relationship you build with your customers, it can actually help strengthen it. Most customers are still going to want to come in to test drive the vehicle they want to purchase, so you can still spend plenty of face-to-face time with them. You’ve already laid the groundwork and developed trust with the customer helping to create a more streamlined and positive experience when they’re ready to sign on the dotted line.

Start getting the most out of your business with a floor plan from NextGear Capital. Contact us or apply today!

Find Your Way Forward: September 2020

Changing and Thriving during COVID

Steve Gori has transformed the way he conducts business during COVID-19 and his dealership, CarLink, is thriving as a result. While his independent dealership was closed down for three weeks due to New Jersey’s mandated state shutdown, Gori quickly worked with his staff to change the way they handle leads by implementing a weekly and monthly follow up plan. He also made sure his staff was more diligent when booking appointments and wouldn’t allow customers to leave without a car when they made a preset appointment, even if it meant making a smaller margin or breaking even on a unit. Once the vehicle sales were completed, Gori delivered vehicles to his customers while adhering to his state and CDC guidelines. At times, his staff were delivering cars out of state and as far away as 350 miles from their dealership. This shift in operating procedures has resulted in CarLink experiencing record sale months and the lowest inventory point in years. Despite all the extra effort, Gori says the results have been well worth it.

Not all Heroes Wear Capes

Kevin Wallace was at his dealership, Car Solutions in Del City, OK when he spotted smoke across the street at a daycare. He noticed the smoke was coming from a carport behind the building, but once closer, realized the fire was quickly growing. Wallace dashed in the daycare to the closest room, which happened to be an infant room with 8 babies inside. Despite being in the process of undergoing treatment for leukemia, he immediately jumped into action and with the help of the daycare’s staff, was able to quickly get all of the babies safely outside. He then went room by room making sure the remaining children were safely escorted out of the building. Wallace was the last one out and just a few moments after getting safely outside, smoke had engulfed the entire building and everything in front of them went black. His quick actions helped save 22 children and 3 staff members. In honor of his courageous actions, Wallace recently received a Good Samaritan Award from Del City.

Feeding Those in Need

As part of their ongoing support of Gleaners Food Bank, NextGear Capital’s donation from the James M. Cox Foundation was put to good use over the summer. The $25,000 donation went to support programs like the Mega Fresh Mobile Distribution which was the largest food distribution of its kind in Indiana history and the No One Runs on Empty Campaign. While NextGear Capital has always been a supporter of Gleaners, the past few months saw an increased need due to the current pandemic. Gleaners distributed 13.8 million pounds of food just in the months of March and April which was up from 6.7 million pounds from the same time the previous year. Gail Lowery, Chief Philanthropy Officer of Gleaners Food Bank said that without the support of organizations like NextGear Capital, they wouldn’t have been able to be there for so many people who rely on their services.

 

Is a Dealer Floor Plan Right for You?

Kathy Ward using her Independent auto dealer floor plan

Kathy Ward using her Independent auto dealer floor planAll automotive dealers know there are many different ways to buy and sell cars. The automotive industry is unique in the fact that dealers have many choices in deciding how they want to run their business. Some dealers specialize in high-end inventory, while some cater their business to toward getting their customers in affordable vehicles. 

Even further, dealers have the option to decide how they choose to fund their business. Used car dealers have access to funding options of which they may not be aware, including independent auto dealer floor plans. 

If you have never heard of dealer floor planning, you might want to take some notes. To put it into the simplest terms, a floor plan works like a credit card made specifically for purchasing inventory. Dealers can use their floor plan line of credit to purchase inventory from auctions and other inventory sources. You may have an airline credit card or one for your favorite department store, so why wouldn’t you have a tool for purchasing vehicles? Although a floor plan doesn’t come with a plastic card you can put in your wallet, it does come with many floor plan products that can benefit your business.  

Is a floor plan right for you? 

An independent auto dealer floor plan fits in with most buying strategies. If you are currently a cash-only dealer, supplementing with a floor plan can help keep some cash in your pocket. Reducing the amount of cash you have tied-up in inventory will free up money for other dealership expenses or improvements. In uncertain times like these, having more cash in your pocket and access to funding can make or break your business. 

For a dealer who is just getting started out, you will need to have a couple things in order before you can start stocking up on inventory.  

First and foremost, to qualify for a floor plan, you need to have 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 pricing structure. 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. 

It is also important that you are not over-extended. If your credit cards are all maxed out, that is a potential red flag even if you have not paid late. Handling your available credit responsibly is essential, so be sure to maintain a substantial amount of available credit.  

Floor plan products 

If you choose NextGear Capital for your independent auto dealer floor plan provider, you get access to many floor plan products and services. Our dealers are able to access vital floor plan information and informative dashboards from any mobile device, anytime of the day through our Account Portal. Within Account Portal, you can enroll in AutoPay, floor non-auction purchases, view titles, and manage audits. In addition, you have access to vehicle valuations powered by Kelley Blue Book, MMR and Blackbook to help make smarter sourcing decisions. 

Ready to see what an independent auto dealer floor plan would look like for your business? Apply here or contact us. 

Supporting Dealers with CarMax Month

CarMax Auction Promo

CarMax Auction PromoAcquiring inventory continues to be a challenge for many independent dealers months after the start of the current pandemic which is why NextGear Capital joined forces with CarMax Auctions to sponsor our second annual CarMax Month. While last year’s collaboration included giveaways and tables filled with promotional items, NextGear Capital knows that its clients’ needs have changed and instead of basing our offering on prizes and giveaways, we’re focused instead on pricing that helps our dealers acquire the inventory they need.

Through the end of August, we’re offering our qualified dealers an aggressive promotional term plan on inventory priced $10K and under that highlights $1 maximum curtailments for 120 days on eligible CarMax Auction inventory. $10K and under inventory is also eligible for 60 for $60 pricing, you can check out the full details of this promotion by visiting nextgearcapital.com/carmax.

CarMax Auctions offer competitive buy fees, an easy to use inventory search with alerts on a wide variety of vehicles and a free AutoCheck® vehicle history report. CarMax Auctions have transitioned to all digital sales over the next few months, so it’s never been easier to check out their wide selection of inventory! If you aren’t already a registered CarMax Auction dealer, you can sign-up by completing a free one-time registration application. Dealers can also purchase inventory online from any of CarMax Auction’s 74 locations by getting setup with Virtual Auctions.

As part of its ongoing commitment to invest in its independent dealers, NextGear Capital hopes this promotion will help them get the inventory they need while retaining their operating capital as they forge ahead in the new digital marketplace. We will continue offering our independent dealers the opportunity to thrive in this ever-changing market and look forward to another successful year of partnership with CarMax Auctions.

 

This Dealer Turned Obstacles into Opportunities

After working in long-term care for over 30 years, Angel Wright got to the point where she wasn’t enjoying what she was doing anymore. After a chance meeting with an old acquaintance, her career path went in a completely different direction, “I ran into someone I worked with in the past, who had previously owned a car dealership. He knew I wasn’t happy at my current job so he approached me with an opportunity to make some money and also learn everything I needed to know so that I would be able to sell cars. I thought I have nothing to lose, so I got my dealer’s license and we found a location to start selling vehicles at.”

Wright can clearly remember her first sale, “After I had spent hours detailing and posting pictures of a car I wanted to sell online, a customer came in and paid me cash for it. After that I was hooked, the joy of taking something and making it look brand new was something I really enjoyed doing.” After that Wright kept selling cars but she started to feel the pinch since she was using her own cash to pay for inventory and reconditioning. That’s when she looked into floor plan financing, “I reached out to a few floor plan companies before I contacted NextGear Capital and they all denied me even though I had a good credit score. So, I finally contacted NextGear Capital and I’ll never forget it because I applied for a loan on a Thursday and by Friday afternoon, I was already approved. I started buying cars the next Monday and I haven’t slowed down since.”

Even though Wright didn’t have a background in the automotive industry she had heard a lot of negativity about floor plans “I’d heard all the typical stereotypes, ‘they’re crooks’, ‘they’re loan sharks’, nothing nice. But now that I’m in it, I tell other dealers that as long as you follow the rules, you will do well. When I sell a car, I pay it off right away. I don’t like having a large balance in my account because at the end of the day, I know that the money isn’t mine and that’s how I’ve been managing my floor plan since the very beginning.”

Having a floor plan also allowed Wright to move to a bigger location in Florida’s Lake Worth area which is where her dealership Wright Car Sales resides today. “I was only able to manage 2 or 3 vehicles before getting a floor plan and after that I was averaging 8 to 10. Since I got approved for my floor plan in 2018, I’ve sold over 50 vehicles and I know I couldn’t have done that with my own cash.”

She says that she’s also learned how to set herself apart from the local competition. “The other dealerships in my area carry very similar inventory, so I like to get inventory at different price points and also models they wouldn’t carry. I love when a customer comes in and says they went to a different dealership and couldn’t find a car because they didn’t have something they could afford, or something they liked. And then they come in and I’m able to find them a car that fits their budget and is just the right amount of car they need. At least 90% of my customers are male but I love working with female customers because I know that when they come in, they’re ready to buy a car. Especially if they’re single moms who don’t have a lot of time to spare, so I do everything I can to get them into a reliable vehicle they can afford.”

Like a lot of other independent dealers, the COVID-19 pandemic has had a major impact on her business. “Before COVID I was averaging 8 to 10 vehicles and I had just gotten a new dealer license that was going to allow me to have up to 50 vehicles in my inventory, but I haven’t been able to do that because of COVID. I only have about 5 vehicles in inventory right now because the wholesale market is hot, and it’s been very difficult for me to replenish my inventory. Cars that I would typically pay $3,500 for are selling at auction now for $6,000.”

However, despite the current challenges she’s found ways to adapt to the new car buying climate created by the pandemic, “I have to think outside the box. When a customer contacts me regarding a specific vehicle, we’ll find a place to meet where they can physically see the vehicle without any obligation to buy it. I want to make sure they feel safe and I’ve also started delivering cars once they’re sold. All of my vehicles are also sanitized before customers get in them, so I’ve just learned to adapt and be more accommodating. My only regret is that I wish I would’ve bought more cars pre-COVID because the demand is there, and I know I would’ve sold them all.”

Wright also says that being a female in a male dominated industry hasn’t been a deterrent. “At all of the auctions that I go to the majority of dealers are the old school males but they’ve always been very helpful, and I don’t feel like they look down on me. If anything, they look at me with a little bit of admiration like ‘there’s a woman who knows what she’s doing!’ Being a black woman hasn’t held me back either, everyone I’ve interacted with has been very welcoming. I don’t know if this is the case for everyone, but for me I’ve never experienced any oppositions or challenges as a minority female and I encourage other women not to let the fact that they’re female hinder them from trying something that they will possibly love doing.”

She always says that her NextGear Capital Portfolio Manager, Claudia Coello has given her a lot of support, “Claudia has been my PM since the beginning, and she’s been extremely encouraging. She always tells me I’m doing it right and making her look good. We’ve built a really good rapport together over the years.”

Even with the uncertainty the past few months have provided for dealers, Wright still plans on looking to the future. “I don’t have a husband or children, so I put all of my energy into growing my business. It’s my baby! Once the market is back to normal pricing, one of my goals is to start buying inventory that’s a little newer so I don’t have to spend as much time and money on reconditioning as I do on older vehicles. I’d also like to average at least 10 to 15 vehicles on my lot and have my phone ringing off the hook.”

Now that Wright has been in business for a while, she laughs when she talks about other floor plan companies approaching her. “It’s funny because some of the floor plan companies who wouldn’t work with me when I first started out still reach out today and tell me that I’m approved for a loan with them. I take things personally and I tell them that when I needed you before you said no but NextGear Capital wanted to help me out. I can’t say anything bad about my experience with NextGear Capital. The few times I’ve needed an extension they’ve been granted to me. Their Account Portal tools like Rapid Pay and Self Reconciliation are extremely helpful too. I’ve had a good relationship with NextGear Capital from the start and I plan on sticking with them.”

Floor Planning Cars: Why Cash Holds You Back

floor plan finance

Owning all the cars on your dealership lot can feel very satisfying. You won’t owe fees or interest, and when that vehicle sells, those funds go directly into your account. However, it’s crucial to consider the full cost of restricted cash flow and everything else that comes with owning a lot full of cars. By floorplanning cars, dealers can lessen the immediate cost of inventory and improve overall cash flow.  

It takes a large chunk of funding to start your dealership, and a steady cash flow to help maintain your dealership. Let’s say you have a smaller lot with approximately 20 cars. If each car costs an average of $6,500, that’s $130,000 in funds tied up in vehicle inventory, not including team member salaries and other overhead. 

What could those funds be doing if they weren’t tied up in inventory? 

By supplementing a cash strategy and floorplanning cars, dealers can purchase inventory without utilizing a large portion of savings. Until the car is sold, dealers only owe minimal payments. Once the car is sold, dealers can immediately pay off the loan amount and gain profits while keeping their funds liquid for overhead and other expenses. 

Converting Cars to Cash 

Dealers will occasionally need a quick cash infusion, especially during these uncertain times. Often, dealers that own their inventory will say that they can always take inventory back to auction or to a wholesaler if there is a need for additional funds. 

 Part of having a comprehensive inventory strategy means wholesaling vehicles at auction, and it can be an important part of your aged inventory exit strategy. However, if you are relying on vehicles to sell at auction in order to get necessary funds, you may want to consider alternate options. 

 There are several hurdles dealers must overcome just to break even on a car’s initial purchase price. If the vehicle has been sitting for a while, depreciation will take its toll. It requires additional time and effort to take inventory back to auction, plus buy and sell fees will take a small percentage out of any sale price.  

By using floor plan financing, dealers can offset the full costs of inventory. Instead of paying full price when the car is purchased, dealers can use their line of credit and leave dealership savings available for unexpected expenses or emergencies. 

 Even though it may seem counterintuitive, the cost of using cash can hold your dealership back from accomplishing its goals. Floor plan vehicles to stock your lot and take advantage of the flexibility and the improved cash flow a line of credit offers. 

 Floor Plan Products 

In addition to keeping cash from being tied up in inventory, floorplanning cars can unlock some helpful tools for your dealership. Floor plan products, like expedited funding, transportation financing and consumer loan payoff programs are all things to look for in a floor plan company. For example, NextGear Capital will manage and store titles for all floor planned vehicles. This means that each vehicle placed on a 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 in then uploaded directly to your Account Portal where they can be viewed in full color, 24/7.  

Instead of spending hours hunting down misplaced titles or wasting time finding room in your budget to hire someone to manage them, you’ll have more time to spend making sure the inventory on your car lot and online looks like it’s just been driven off a showroom and is ready to sell. 

Want to learn more about floorplanning cars? Please apply or contact us for any questions.