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every 30/60/90/120 days. If curtailments are not made or the dealer enters into default on their obligations, floor plan companies will take action to minimize their exposure. Those actions include attaching to the bond (not all states require dealers to have bonds), repossessing the collateral, and other collection efforts.
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Most car dealerships use a floorplan facility to finance their inventory and factor the cost of the facility into the price presented to the consumer. The practice of using floorplan loans to finance inventory creates an incentive for the dealers to sell vehicles as quickly as possible in order to
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Floor planning (flooring) vehicles is a way to acquire inventory, but it can have negative consequences if payments (curtailments or payoffs) are not made on time. Curtailment schedules vary by floor plan providers, but they generally range from 5–20% of the original loan proceeds on each vehicle
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reduce the amount of interest that will accrue on the floored vehicle. Floor planning costs can run into hundreds of thousands of dollars a month for a big multi-location dealer with large inventories.
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Rather than offering loans for each individual vehicle purchase, most floor planning companies supply dealers with a revolving line of credit that they can use to acquire inventory, such as through
50:. Contrary to common perceptions, most car dealers do not pay cash for the vehicles on their lot. Even smaller dealerships can have an inventory of vehicles representing millions of dollars of
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65:(formerly GMAC). With used car dealers, specialty finance companies cater to their industry.
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In the case of new vehicles, they are generally floor planned by the manufacturer, such as
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Floor planning is commonly used in new and used car
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35:to purchase high-cost inventory such as
109:"Floorplan 101 - What You Need To Know"
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255:This finance-related article is a
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316:Retail processes and techniques
199:www.autodealertodaymagazine.com
195:"Taming The Floor Plan Monster"
193:Dreisbach, Scott (2007-05-15).
140:"What is floor plan financing?"
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259:. You can help Knowledge by
168:Ransom, Kevin (2016-11-21).
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27:) is a type of short term
170:"How Car Dealers Are Run"
81:recreational vehicles
19:(also referred to as
17:Retail floor planning
219:"Dealer Floor Plans"
306:Automotive industry
70:automobile auctions
25:inventory financing
225:. 13 November 2017
52:capital investment
321:Corporate finance
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79:Dealers of
48:dealerships
37:automobiles
300:Categories
229:2019-06-20
204:2019-03-04
179:2019-03-04
154:2013-06-12
125:2013-06-12
95:References
41:collateral
33:retailers
223:nada.org
31:used by
144:SBA.gov
311:Credit
119:(PDF)
112:(PDF)
85:boats
257:stub
29:loan
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