Finding the right floorplan for your independent dealership can feel overwhelming when there are so many to choose from. But picking the right floorplan not only puts more money in your wallet, it also provides you with additional tools to improve your bottom line. Here are some things to consider when analyzing the pros can cons of a floorplan provider:

The Right Floorplan Should Support Your Business Model

Whether you own a small family-owned car lot or run dealerships in multiple markets, you need to make sure the floorplan provider you select will align with your current business model. You’re more likely to do so by taking your time and doing some research. Some examples of things you should take into consideration are:

  • Do they have any restrictions on the types of inventories you can floor such as vehicle age, mileage, or the amount you can floor per unit?
  • Are there additional costs based on where the inventory is sourced from? Will there be a delay in funding if you purchase an off-street vehicle versus one from an auction?
  • What is their policy for floorplanning a trade-in? Will the floorplan provider assist in funding the payoff to preserve your cash flow?
  • Is their flooring process easy to understand?
  • What are their audit guidelines and what is their audit experience like?

Make Sure the Floorplan Provider Has Transparent Fees

Hidden fees and other unexpected costs can add up quickly impacting your bottom line, so you need to make sure you have a clear understanding of all the fees you’ll be charged. Some companies may even charge you fees to set up your account but floorplan provider Kinetic Advantage doesn’t charge dealers any administration or upfront fees when applying for a floor plan. To make sure there’s no confusion over fees you should request the following:

  • An example of a billing statement with a breakdown of all of the costs you should expect to pay
  • A complete fee list including initial floor fees, audit fees, curtailment and payoff fees
  • Comprehensive information on the different types of term plans you qualify for

Fewer Fees Does Not Always Mean Better Value 

While you’re evaluating all of the aspects of a floor plan, make sure that you’re taking other things into account to determine its true value. For example, you should consider the amount of time it will take to manage the floorplan, the level of customer support you will receive and any additional resources they provide, such as a painless audit process or consumer loan payoffs. By doing a full assessment of a floorplan, you’ll be able to determine which one provides you with the best value.

Look for Potential Roadblocks That Could Impact Your Dealership

Even if a dealership financing company claims to offer all the bells and whistles you can think of to manage your floorplan, you need to feel confident that there aren’t any potential roadblocks that could hinder your business. Before signing on the dotted line, make sure that you ask your rep to provide you with information on the following:

  • Detailed information on curtailment fees and terms
  • Timeframe allowances for units that haven’t received funding
  • Any restrictions on where inventory can be sourced from
  • The average time it takes to process titles

Choosing the right floorplan provider will help your dealership to flourish by giving you the support and resources you need to grow your business. Kinetic Advantage provides independent dealers with financial solutions that maximize success and minimize worry in a rapidly changing market. To start the application process visit https://www.kineticadvantage.com/apply/.

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