AFC, a business unit of global wholesale used vehicle digital marketplace operator KAR Auction Services, Inc. d/b/a KAR Global (NYSE: KAR), announced an improvement June 8 that offers cash buyers a more flexible and simple floorplan solution through its Daily Tab product, according to a press release.
To date, more than 109,000 units have been floored using this offering. The product is a less rigid solution than traditional fixed-duration floorplans and well-suited for dealers who anticipate fast-turning vehicles in today’s high-demand retail market.
Daily Tab enables dealers to pay only for the days of flooring they need — starting as short as just one day and continuing until the unit is paid off. The offering reduces cash flow pressures for cash buyers and facilitates expanded working capital that can be put to work funding more inventory.
“Daily Tab is a simple idea that’s perfect for traditional cash-buying dealers: they pay a flat daily fee until their unit is paid off. So whether that’s in one day, one week or one month — they’re only paying for what they need, freeing up cash while keeping costs low,” said Jim Money, president of AFC. “Daily Tab is ideal for the dealer who typically purchases low value inventory or only needs very short-term financing, something that is cost-prohibitive with traditional floorplan products.”
A daily fee is paid each day the unit remains on floorplan and starts at just $2 per day, depending on the amount floored. The fee structure is easy to calculate, completely transparent and inclusive of all fees, including the floorplan fee, interest, and document processing fee. Daily fees are only incurred as long as a unit remains on floorplan.
“Daily Tab offers dealers the simplicity of buying with cash while also affording the flexibility and convenience that comes with a floorplan,” said Will Mitchell, chief operating officer of AFC. “The benefits really stack up — from more working capital so dealers can opportunistically source fresh inventory to a consolidated single payment source for all auction purchases whether digital, mobile or on-premise, and even back-office support. It’s a win-win option for dealers ready to think outside the box and focus on selling more cars.”
AFC helps independent dealers grow their business faster by providing financing for used vehicle inventory. Across the U.S. and Canada, AFC works with more than 11,000 dealers in the retail and wholesale automotive space as well as RV, power sports and commercial truck dealers, salvage buyers and daily rental operators and is accepted as a form of dealer payment at over 1,100 auction sources in the same footprint.