What Is Flooring A Car

Auto dealership slang to finance vehicles for sale lit.

What is flooring a car.

Front money to put vehicles on the floor of a dealership. Contrary to common perceptions most car dealers do not pay cash for the. Floor plan finance companies are uniquely attuned to the needs of auto dealers. In the case of monocoque designs the floorpan is the most important metal part establishing the chassis body and thus the car s size it serves as the foundation of most of the structural and.

Floor planning is commonly used in new and used car dealerships. But because inventories are so immense the car business is very sensitive to both floor plan interest rates and the tax treatment of interest expenses. Retail floor planning also referred to as floorplanning or inventory financing is a type of short term loan used by retailers to purchase high cost inventory such as automobiles these loans are often secured by the inventory purchased as collateral. For example automobile dealerships utilize floor plan financing to run their businesses.

Floor planning is a form of financing for large ticket items displayed on showroom floors. Using cash or a bank line of credit to purchase inventory can work for some car dealers but many floor plan financing companies offer a variety of dealer specific benefits. The bank is flooring all these cars said the sales manager to the new hire.