Dealer Floor Plan Financing Explained

So how do car dealers finance their inventory? Mostly with someone else’s money. In the US, franchised dealers held about 2.7 million new vehicles in June 2026, and the average new vehicle sold for $48,990. Very few dealers could carry that stock from their own cash. A floor plan is what lets them.

For the lender, it’s one of the safest kinds of lending, as long as the cars are where the dealer says they are. This guide covers how it works, what it costs, who provides it and how to qualify, with a worked example and the checks lenders use to protect themselves.

Source for US figures: NADA Data 2026 midyear report.

What is floor plan financing?

A dealer floor plan is a credit line secured against the stock itself. Each vehicle is a separate loan, called an advance. When the vehicle sells, the dealer repays its advance, and that room on the line is free for the next vehicle.

Other names for it

• Floor plan or floorplan financing, floor plan loans (US and international)
• Floor stock financing or dealer floor stock (another common US phrase)
• Stocking finance, unit stocking or stocking plan (UK and Ireland)
• Dealer inventory financing, wholesale finance or inventory finance (lenders often use these)
• Consignment funding (for new vehicles the manufacturer supplies before the dealer has paid)

Is an auto floor plan a line of credit or a loan?

Both. The facility is a revolving line of credit with an overall limit. Inside it, every car is its own short loan with its own start date, interest and curtailment schedule. That’s why a lender can tell you the exact balance on one VIN, and why one unpaid car can put the whole line at risk.

Who uses it

Franchised and independent car dealers, motorcycle and RV dealers, marine dealers, and agricultural, construction and materials-handling equipment dealers. Anyone who has to show expensive stock before they can sell it.

How does floor plan financing work?

1. The credit line is agreed. The lender looks at the dealer’s accounts, sales history and owners, and sets a limit (see requirements below).
2. The dealer buys stock. The lender pays the manufacturer, auction or seller directly.
3. The lender protects its position. In the US, the lender usually holds the vehicle’s title. In the UK and Ireland, the lender normally has a security interest and records a finance marker, and under some models the funder owns the vehicle outright until the dealer pays.
4. Interest runs every day the vehicle is on the plan, usually billed monthly.
5. Curtailments fall due if the vehicle hasn’t sold after a set number of days.
6. The lender checks the stock through regular audits.
7. The vehicle sells and the dealer repays the advance within the window in the agreement. On paper that’s usually “on sale”. In practice it’s typically between 48 hours and five working days.
8. The lender releases the title or clears the marker, and the cycle starts again.

The floor plan cycle

1. Line agreedLimit set on accounts and history
2. Stock boughtLender pays the supplier
3. Security heldTitle, marker or ownership
4. Interest runsEvery day the car is on the plan
5. CurtailmentsPart-payments as stock ages
6. Stock checkedAudits confirm the car is there
7. Car sold, advance repaidWithin the agreed window
8. ReleasedTitle or marker cleared

Then the room on the line funds the next vehicle, and the cycle starts again at step 2.

Floor plan financing example

Here’s what two cars cost on a floor plan from the day they’re funded to the day they’re paid off. The numbers are illustrative, not a quote: your advance rate, interest rate and curtailment terms will differ. They sit inside the ranges US bank supervisors describe as typical, which is 100% of invoice for new cars and up to 90–100% of the lower of auction price or guide wholesale value for used cars.

Worked example 1

A new car

Invoice cost

$40,000

Advance rate

100%

Amount funded

$40,000

Interest (8% a year)

$8.77 a day

Curtailments

None before day 90

Sells after

51 days

Interest paid

about $447

On sale the dealer pays off the full $40,000 advance.

Worked example 2

A used car

Auction price

$20,000

Advance rate

90%

Amount funded

$18,000

Dealer’s own cash in

$2,000

Interest (9% a year)

$4.44 a day at first

Curtailment (10%)

$1,800 every 30 days

Sells after

75 days

Curtailments paid

$3,600

Interest paid

about $306

On sale the dealer pays off the remaining $14,400.

How the interest is worked out. Daily interest is the balance × the annual rate ÷ 365. On the new car that’s $40,000 × 8% ÷ 365 = $8.77 a day, or about $447 over 51 days. On the used car the balance drops after each curtailment, so the daily charge falls from $4.44 to $3.99 after day 30 and to $3.55 after day 60.

What the used car really tied up. By the time it sold, the dealer had put in $2,000 at purchase and $3,600 in curtailments, and paid about $306 in interest, before any flooring or audit fees. That’s $5,600 of the dealer’s own cash sitting in one car. Multiply that across a lot of ageing stock and you can see why curtailments squeeze cash flow.

The longer a car sits, the more it costs. That’s why floor plan cost is one of the first numbers a dealer principal watches when stock builds up.

Floor plan financing companies: who provides it

There are four main types of floor plan lender.

• Captive finance companies. Owned by a manufacturer, they fund that brand’s franchised dealers. They often offer the best terms on new stock, and their terms are tied closely to the manufacturer’s sales programmes.
• Banks. They often fund larger dealer groups, sometimes alongside property loans, working capital and retail finance.
• Independent floor plan lenders. Specialist companies, many focused on used-car and independent dealers who buy at auction.
• Distributors and importers. In smaller markets, the distributor may fund its own dealer network directly.

In the UK and Ireland, new stock is usually funded by the manufacturer’s captive finance company. Used stock is usually funded by a bank or a specialist stocking lender. Terms of 30 to 120 days are common, and agreements usually require settlement when the vehicle is sold.

Dealer floor plan requirements: how to qualify

Every lender sets its own criteria, but most ask for the same things. US bank supervisors list much of this in their guidance for examiners, so it’s a fair guide to what a lender will look at.

• Accounts and trading history. Recent annual accounts and management figures. Once you’re funded, expect to send quarterly or monthly statements.
• The owners. Personal financial statements from the principals, and often a personal guarantee, especially for smaller dealers.
• Licences and agreements. The dealer licence your state or country requires and, for new stock, a franchise agreement with the manufacturer.
• Sales history. How many cars you sell a month and how long they take to sell. This sets the size of the line.
• Insurance on the stock, often with the lender named on the policy.
• Agreement to audits and to the lender holding titles or recording a finance marker.
• Other lenders. If you already have a floor plan elsewhere, the lenders may need an inter-creditor agreement so the same car can’t be pledged twice.

How big a line will you get?

Lenders usually size the line on sales rate × days of stock × average cost. Say a dealer sells 30 cars a month, needs about 60 days’ stock and pays $35,000 a car on average: 30 × 2 months × $35,000 gives a line of about $2.1m. A dealer who turns stock faster needs less credit for the same sales.

What floor plan financing costs

Interest

Interest is charged on each vehicle for each day it’s on the plan and is usually billed monthly. It’s normally priced as a margin over a benchmark rate: prime or SOFR in the US, or a bank base rate or Euribor in Europe. Lenders don’t publish their margins. They vary with the dealer’s risk, size and brand, and used stock is usually priced higher than new.

Floor plan cost moves with interest rates. When rates were close to zero in 2020 and 2021, and stock was scarce, many US dealers earned more in manufacturer floor plan assistance than they paid in interest. As rates rose from 2022 and stock came back, floor plan interest became a real expense again.

What it costs a real dealer group: AutoNation

AutoNation, one of the largest dealer groups in the US, publishes its floor plan costs every year. They show how quickly the cost can change.

Year	Floor plan interest (all vehicles)	New-car interest per new car sold	Manufacturer assistance per new car	Net per new car
2021	$25.7m	$85	$463	+$378
2022	$41.4m	$154	$474	+$319
2023	$144.7m	$540	$514	−$26
2024	$218.9m	$827	$537	−$290
2025	$188.8m	$699	$520	−$179

AutoNation: floor plan cost per new car sold

Manufacturer floor plan assistance minus new-car floor plan interest, per retail new car

2021

+$378

2022

+$319

2023

−$26

2024

−$290

2025

−$179

Dealer losesDealer gains

Source: AutoNation annual reports (Form 10-K) for 2023 and 2025. Per-car figures are our own calculation: new-vehicle floor plan interest and floor plan assistance divided by retail new vehicles sold.

In three years, AutoNation’s floor plan interest went up eight and a half times. In 2021, manufacturer assistance more than covered the interest on every new car, leaving about $378 per car in the group’s favour. By 2024 the group was paying about $290 per new car more than it received.

In 2025, with 245 stores, the bill came to about:

• $770,000 a store for the year;
• $64,000 a store each month;
• over $500,000 a day across the group.

The group says a 1 percentage point change in interest rates would change its annual floor plan interest by about $38m. It also says it generally repays new-vehicle floor plan “within several business days” of the sale.

AutoNation is a very large, efficient group with access to some of the best rates in the market (its new-vehicle floor plan averaged 5.4% at the end of 2025). A smaller dealer paying a higher margin will usually pay more for each car.

This is also why a car that has been sold but not yet settled matters to both sides. Every day it stays on the plan, someone is paying interest on a car the dealer no longer has.

Curtailments

A curtailment is a part-repayment due once a vehicle has been on the plan for a set time. A common pattern is 10% of the advance at 60, 90 or 120 days, then repeating until the car sells or reaches its maximum term. Many used-car plans start earlier and take a curtailment every 30 days. Curtailments keep the loan in step with what the car is losing in value, and they push the dealer to sell ageing stock.

Fees

Depending on the lender, you may see:

• a flooring fee for each vehicle added;
• audit fees;
• title or document fees;
• extension fees for keeping a vehicle past its term;
• late payment and out-of-trust charges.

Manufacturer floor plan assistance

Many manufacturers pay their dealers a floor plan assistance credit for each new vehicle, to offset some of the interest. For example, in 2024 Ford moved its US programme to an upfront credit of 1% of the vehicle’s cost, and raised it to 1.25% on combustion-engine models in early 2025. Whether a dealer makes or loses money on floor plan depends on how quickly it sells cars compared with the assistance period.

Used car dealer floorplan financing

Independent and used-car dealers can get floor plan financing, but the terms are tighter. There’s no manufacturer standing behind the stock, values are harder to pin down, and the cars lose value from the day they’re bought. So lenders fund a share of auction or guide value rather than the full invoice, start curtailments earlier and usually charge a higher rate.

	New vehicles	Used vehicles
Usual lender	Manufacturer’s captive	Bank or independent lender
How much is funded	Often 100% of invoice	A share of auction or guide wholesale value
Curtailments	Fewer, often linked to the model year	More common, starting earlier
Interest	Usually the lowest margins	Usually higher
Manufacturer assistance	Often available	Rarely
Main risk for the lender	Sold, not paid	Overvaluation, sold not paid, ageing stock

How lenders check the stock: floor plan audits

The cars are the security, so the lender needs to know they’re still there and still unsold. A floor plan audit checks every funded vehicle against the lender’s records. Most lenders run the line on floor plan software that tracks each advance, curtailment and payoff. The audit is what tells you whether that ledger matches the lot.

• On-site audits: an auditor visits and checks each vehicle, its VIN and its condition.
• Dealer self-audits: the dealer’s staff check each vehicle using an app the lender controls, with live photos, location and time recorded.
• Unannounced audits: so the dealer can’t tidy up the position the day before.
• Remote checks: some lenders now use connected-vehicle data to see daily whether funded vehicles are on or off the lot.

How often? US bank supervisors expect floor plan checks at least quarterly, more often for “pay as sold” lines or weaker dealers, and a mix of announced and unannounced visits. The FDIC’s examination procedures say “generally monthly”. Among the funders on our platform, most now audit their dealers monthly; many were auditing quarterly before they started. One of our first customers was a distributor that funded its own dealers and audited once a year, mainly because the statutory accounts required it. Once its dealers could self-audit under the distributor’s control, it moved to a check every two weeks. That changed how it ran its whole network.

A missing vehicle isn’t always a problem. It may be at the bodyshop, out on a demo or at another site, and a good auditor checks the explanation. When a vehicle has been sold and the lender hasn’t been paid, the dealer is out of trust. Read our plain-English guide to selling out of trust.

An audit is only as good as the evidence behind it. CheckVentory Auditor lets the lender start a check when it chooses, and records a live, geo-tagged, timestamped photo of each funded car, matched to the funded book.

The risks, on both sides

For the dealer:

• Interest builds every day a car doesn’t sell.
• Aged stock brings curtailments, which can cause cash-flow problems when several fall due at once.
• Late payoffs can lead to fees, tighter terms or a reduced line.
• The personal guarantee is at risk if things go badly wrong.

For the lender:

• Vehicles sold out of trust: sold, with the money used elsewhere.
• The same vehicle funded by two lenders (“double flooring”).
• Aged, damaged or overvalued stock that’s worth less than the advance.
• Audit reports that don’t reflect what’s really on the lot.

Most problems are timing and admin, not fraud. But the large losses, when they come, almost always follow a long gap between checks. Cases such as Reagor-Dykes in Texas (a $53.76m jury award for one funder in 2019) and Sky Auto Mall in Iowa (81 vehicles allegedly financed with two lenders in 2026) show how quickly the gap grows.

Choosing a floor plan provider: questions to ask

Plans can look alike, so compare more than the rate.

• How much will you fund? What percentage of invoice, auction or guide value? Does it include VAT on qualifying vehicles?
• What can I fund? Manufacturer stock only, or also auction, part-exchange (trade-in), trade and private purchases?
• How long can a vehicle stay on? 90, 120 or 150 days? Does that match how quickly you sell?
• What are the curtailments? When do they start and how much are they?
• What does it really cost? Margin, benchmark and every fee.
• How long do I have to pay after a sale? Is there a “sold, not delivered” option while you wait for retail finance?
• How are audits done? How often, and can your staff self-audit without stopping sales?
• What reporting do I get? Can you see your position every day, online?

Whatever the plan, keeping your lender’s confidence matters most. Dealers who report sales promptly and pass their audits cleanly get bigger lines and better terms.

Frequently asked questions