KeyBank Dealer Finance is promoting a floorplan management tool to help dealers maximize efficiency and reduce costs amid thinning margins and slowing sales.
“From a dealer standpoint, inventory management is much more critical in today’s environment,” said Dave Gibson, the bank’s senior vice president of dealer finance.“For the past eight years, floorplan has been a profit center as the manufacturers’ floorplan assistance has typically exceeded a dealer’s floorplan expense.”
But that scenario is changing, he said.
To that end, KeyBank is promoting its automated floorplan offset credit sweep product to help dealers save money in interest payments and time. The solution automatically moves excess cash in and out of a dealer’s operating account to offset inventory floorplan expense, to reduce non-earning idle cash, to lower interest expense, and to reduce time spent managing savings accounts.
“The product works by reducing the amount of floorplan that the dealer is paying interest on,” Gibson said. Excess cash is “swept” daily to reduce a dealer’s floorplan balance and, ultimately, its floorplan interest expense.
For instance, if a dealer has a 4% floorplan interest rate and sweeps an average of $1 million, he could effectively reduce the dealership’s annual floorplan expense by $40,000. KeyBank works with 1,800 dealers, but Gibson declined to disclose the percentage of that floorplan with the bank.