how a floor plan can help your dealership

If you are thinking about getting an auto dealer floor plan, it’s important to understand what it is and how it can benefit your dealership. Floor plan financing is essentially a “credit card.” This means the floor plan company (like Kinetic Advantage) lends money to a car dealer so that they can purchase inventory for their dealership, and the loan is paid off as cars are sold.

But what are the benefits of a floor plan?

Floor Plan Benefits

More inventory: Floor plans allow a dealer to purchase more inventory, or in some cases, more expensive inventory. Having more inventory means that your customers will have more options to choose from, and this can help your dealership make more sales. If your dealership has an increase in cash flow, then you can begin to use some of that money for other improvements to your dealership.

Unexpected expenses: Floor plans are known for helping dealerships pay for more inventory, but they can help cover unexpected expenses as well. A good example of this could be if a dealership needs to pay for new software that was invented or if they need to make upgrades to their existing technology to stay competitive. Money from the floor plan can also be allocated for other investments like advertising.

how a floor plan can help your dealership

Time saver: At Kinetic Advantage we how much time and effort it takes to run a dealership, but thankfully floor plans are designed to save you time. If a dealership was getting inventory through auctions, they would be using their cash and having to keep track of all their paperwork from the auctions. If a dealership used a floor plan, they would only have to put their bid for the auction on the line of credit they received from the floor plan. Dealerships are also in charge of managing titles from all the cars being bought and sold, and some floor plans can come with management tools. This allows dealers to spend less time managing titles at the DMV and focusing on customers and inventory.

Increase your profits: Floor plans can help your dealership see profit almost as soon as a vehicle is sold. If a $10,000 vehicle is sold to a customer for $12,000, then the dealership has a lot of flexibility with the profit. They can pay off their original loan and any extra fees that came with it, and they can also use this money for other expenses they may see fit for their dealership.

To learn more about dealership floorplans, get in contact with us at Kinetic Advantage to hear about all of our financing options.

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