Limited time offer (ends December 31, 2019)
My Minnesota Dealer is offering this special only $999 for annual membership to get access to Manheim and Adesa Dealer auctions locally and nationally.
This includes 1 Free Paper temp tag with each title fee paid ($150). .
Valid in all states… (including yours!) Wherever there is a Manheim/Adesa/etc…this Dealer can get you local access and will 2 day mail all necessary documents you need like title/bill of sale/etc.
Includes a 21 day paper temp transport tag (out of state). If you are in the state of Minnesota you will receive a 31 day paper temp tag. You must provide proof of your own personal car insurance policy at initial signup with this Dealer. Dealer does not provide insurance at all.
Dealer Floor Plan – should you use one ? -Pros vs Cons
You may be considering a floor plan or floor planning for your Dealership. I just want to give you a good working definition. Think of a floor plan as the credit plan or revolving line of credit for Auto Dealers – specifically for purchasing vehicle inventory. It acts more like a credit card and less like a loan. The amount you can utilize from day-to day goes up or down based on your utilization and real-time payments.
You can think of a Floor Plan quite similar to a regular consumer credit card. In this country, Credit cards are issued by a bank to an individual. An individual can then buy stuff with that credit card (a credit card is essentially the physical representation of a line of credit from a bank) . So if you buy a pair of jeans on your credit card, the money borrowed from the bank collects interest, and you have the choice to either make a minimum payment (credit) or pay off the entire balance (charge or short-term loan) in full when the bill is due.
So how does floor plan financing work?
Much like a credit card, a floor plan financing company extends a line of credit to a car dealer. Dealers can then use their floor plan line of credit to purchase inventory from auctions and other inventory sources. If a dealer purchases a car on a floor plan, takes it back to their lot and it doesn’t sell within a contractually determined number of days, dealers are charged a small fee. As a dealer sells their inventory, they pay back the original loan.
With a floor plan, the initial investment needed to buy a particular unit is a fraction of the vehicle’s actual purchase price. As soon as that vehicle sells to a consumer, floor planning dealers have the ability to immediately realize profits, pay back the initial value of the loan plus interest and fees, and hve the flexibility to keep their funds working for their dealership.
You may not believe it, but most car dealers do not pay cash for the vehicles on their lot. Even smaller dealerships can have an inventory of vehicles that they acquired with funds from their floor plan. representing. Rather than offering loans for each individual vehicle purchase, most floor planning companies supply dealers with a revolving line of credit that they then use to buy vehicles from Dealer auctions.
Should you use a Floor Plan ? – Pros and Cons
While Floor planning (flooring) vehicles is a way to acquire inventory, it can have a strong impact on your license 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 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.
So, of course you know that the longer your inventory sits, you are burning money. A general rule of thumb is that, once a unit moves past the 60 day point, you should start thinking about dumping that car in the Auction or something and pay off that financing. Depending on the size of your Dealership you can hold cars longer or for less time. The depending on the amount of time you had your license (and even your personal and/or business credit) will have an impact on your actual loan rates.
Lets take an individual Case here. Lets assume you brought one car on your Dealership Floor Plan. Take a look at what could be the financial impact:
Say you borrow $15,000 to buy a late model import. You hope to sell it for $18-$20K and net $3.5-4.5K profit. Well just at 5% (floor plan loan rate) you are looking at $750 to be due within 30 or 60 days depending on the terms of your Floor plan. We have not factored in your overhead (fixed expenses) that every vehicle in your inventory has contribute to. So you can easily slice a third of your profit or more from your profit margins if you cannot sell your cars fast enough (within 30 days)
My opinion is use Floor Plan for the most in demand vehicles that have a higher profit margin …not ordinary or average cars. I would strongly urge you to have a paid marketing budget specifically for the Floor Plan cars which have to sell faster. Your target should be to sell a car in 30 days or less . And last but not least, have some kind of exit planned for each vehicle if it does not sell within 45 days. This gives you enough time to generate the funds for the car and pay off the loan.
—— Georgia Dealer License – $1595 Deposit to get started and then you pay your expenses as they come in – which would be about $2000 for your location, liability insurance, surety bond, etc.
6 Steps to buying a car with Auction Access thru one of my network Dealers. Always start with the money (whats the budget?) and end with the money (finalize payment for the vehicle). Don’t skip any steps in between.
How to get your own North Carolina Used Car Dealer License -step-by-step guide
If you want to sell cars in the state of North Carolina, you need a Dealer License. A person needs a license if a person “Engages, wholly or in part, in the business of selling new motorvehicles or new or used motor vehicles, or used motor vehicles
only, whether or not the motor vehicles are owned by that
person, and sells five or more motor vehicles within any 12 consecutive months”…
The good thing is you do not have to have a Car Lot in North Carolina, but your location (enclosed office) must have Proper Zoning Approval to sell Cars from that Location ). Your Established office must meet the following requirements:
1.Location:
a. Contains at least 96 square feet of floor space in a permanent enclosed
building.
b. Is a place where the books, records, and files required by the Division
under this Article are kept.
If you want to go bigger, then you can get an “established salesroom” (a showroom explicitly for Retail selling to the public) containing at least 96 square feet of floor space in a permanent, enclosed building, or separate and apart from any living quarters, residence, or other business and having a separate entrance.
Established salesroom. – A salesroom that meets the following requirements:
a. Contains at least 96 square feet of floor space in a permanent enclosed
building.
b. Displays, or is located immediately adjacent to, a sign having block
letters not less than three inches in height on contrasting background,
clearly and distinctly designating the trade name of the business.
c. Is a place at which a permanent business of bartering, trading, and
selling motor vehicles will be carried on in good faith on an ongoing
basis whereby the dealer can be contacted by the public at reasonable
times.
d. Is a place where the books, records, and files required by the Division
under this Article are kept.
Note: Make sure the established office and/or salesroom are in compliance with all state, county and municipal zoning regulations and ordinances.
2. Attend a Pre-Licensing Course (Used Motor Vehicle Dealers Only) Used motor vehicle dealers must complete a 12-hour licensing course approved by the DMV before applying for their license.
3. Obtain Liability Insurance Comprehensive liability insurance covering your dealer plates is required. Your provider and policy number must be included on your application.
4. Obtain Your Auto Dealer Bond The cost of a North Carolina auto dealer bond is a small percentage of the total bond amount. The bond cost varies depending on your financial strength, e.g. personal credit. You can also take a look at our most frequently asked surety bond questions.
Bond Amount Required:
$50,000 for one established salesroom
$25,000 for any additional salesrooms
4a. Get your state approved background check and attach proof to your application
5. Compile the Required Documents
An assumed business name must be filed with the Register of Deeds in the county where the business is maintained, if the business will be operated under any name different from the owner. If the business will be conducted as a corporation, you need to file articles of incorporation with the North Carolina Secretary of State.
A Trader’s License from the municipality and county must be obtained before filing your application
6. Arrange for a Business Location Inspection All dealerships must be inspected and approved by an agent of the License and Theft Bureau before your application is submitted.
>>>>>>You can have My consulting firm do this all for you 😁
7. Submit Your Dealer License Application Fill out the application form and pay the fees:
$90.00 for each place of business
$36.00 per plate for the first five plates
$14.00 per plate for additional plates
$14.00 per dealer transporter plate
$25.00 for 25 temporary markers
8.
North Carolina Department of Transportation
Division of Motor Vehicles
License and Theft Bureau Dealer Unit
3129 Mail Service Center
Raleigh, NC 27699
North Carolina Dealers License are valid for one year. They must be renewed annually… >>>>>>You can have My consulting firm do this all for you 😁
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