Used car inventory remains tight entering 2023.
According to data from vAuto, January ended with 44 days of supply. That was down from 56 days in December. It was also down from January 2022, which ended with 50 days supply.
For independent car dealers battling for inventory in the wholesale marketplace, proper floor plan financing is essential to keep them competitive.
“Sourcing inventory in a tight market requires independent dealers to have a plan in place to make smart buying and pricing decisions.”
Scott Maybee, president of NextGear Capital.
“Sourcing inventory in a tight market requires independent dealers to have a plan in place to make smart buying and pricing decisions,” said Scott Maybee, president of NextGear Capital. “Using a flexible floor planning strategy can make a dealer’s inventory work for them and stay competitive in any environment.”
Dealers need to also be constantly evaluating their floor plan, or lines of credit, to make sure their rates are in line.
“Many dealers will get a floor plan, set it and forget it. They don’t go back and look at it,” said NIADA Vice President of Dealer Development Jeremy Beck.
Aside from the financial implications, having the right floor plan can help dealerships bring in the most sought-after vehicles for customers. According to NextGear Capital, eight of their top 10 vehicles floor planned in 2022 represent the top three used vehicles sold during that year — Ford F-150, Chevrolet Silverado 1500 and Ram 1500.
“Trucks – especially different years of the F150 – dominate the list which tell us that lifestyle is still a driving factor for customers when shopping for used vehicles,” said Shane Pyne, NextGear Capital senior manager, industry intelligence.
The entire top 10 of NextGear floor planned vehicles were: 1. 2013 Ford F150; 2. 2018 Ford F150; 3. 2014 Chevrolet Silverado 1500; 4. 2014 Ford F150; 5. 2014 Ram 1500; 6. 2016 Ford F150; 7. 2015 Chevrolet Silverado 1500; 8. 2015 Nissan Altima; 9. 2015 Chrysler 200; 10. 2015 Ford F150.
