If you choose to utilize a floorplan, it quickly becomes a key tool in your inventory management and acquisition strategies. It is vitally important to consistently evaluate your floorplan options to ensure you are maximizing their value to drive your dealership forward. To fully grasp your dealership’s floorplan costs, you must begin by analyzing both indirect and direct costs, including the level of service, cashflow flexibility, inventory acquisition options, the interest and fee structure along with re-occurring ancillary fees.
You may be thinking that this is starting to sound like work, but, next to your employee costs, floorplan expense is typically the second highest expense item for an independent dealership.
A thorough and careful review of the indirect and direct costs will yield significant understanding of the relationship your floorplan provider has on your dealership’s bottom-line.
But it is important to understand that evaluating a floorplan provider on a straight cost basis alone is unwise. The ability to source the inventory that best fits your dealership’s needs at the lowest cost and with the least difficulty is not just a straightforward effective interest rate question, it is also a question of service.