Floored vehicle
Interest cost
- Interest per day
- $4.38
- Total interest
- $394.52
- Total carrying cost
- $394.52
- Payoff (amount + cost)
- $20,394.52
Estimate using a 365-day year and simple daily interest on the financed amount. Real floor-plan lines may use a 360-day basis, curtailments, or tiered rates — confirm with your lender.
What floor plan financing is
A floor plan (or “flooring”) is a revolving line of credit you use to buy inventory, with the vehicles themselves as collateral.
One lender describes it as “basically a credit card for inventory.” It runs on a sell-to-pay model: the moment a unit sells, you immediately pay off that vehicle’s outstanding principal plus the accrued interest and fees. In exchange for not tying up your own cash in stock, you pay to carry each car for every day it sits.
Because the floored cars are the lender’s collateral, selling one and failing to pay it off right away — “sold out of trust” — is the cardinal sin of flooring, and it’s exactly what a floor check is designed to catch.
Daily interest on every floored dollar
Interest accrues each day on the amount advanced per unit — so cost is a direct function of how long the car sits.
A common structure is about 27¢ per $1,000 per day. On a $20,000 unit that’s roughly $5.40/day — about $162 over 30 days, $324 over 60, and $486 over 90, before any flooring or curtailment fees. (Illustrative, using a typical per-diem; your rate will differ.)
Plug your own numbers into the calculator above to see the interest and total carrying cost on a specific car.
Check your day-count basis (360 vs 365)
What a floor plan actually costs
Interest is only one line. The all-in cost of carrying a unit has four moving parts.
Flooring fee
A one-time flat fee added to principal when a unit goes on the line (plus small charges like a ~$18 title-processing fee at some lenders).
Daily interest
Accrues every day the unit is floored, on the amount advanced — a common structure is roughly 27¢ per $1,000 per day.
Curtailment / extension
A required principal paydown (a percentage, often 5–20%, or a flat $500–$750) to extend an aging unit past its term.
Audit & ancillary
Floor-check/audit costs and program fees. Exact pricing varies by lender, program, and your credit.
Pricing is typically SOFR + 200–400 basis points depending on your credit, and lenders advance new vehicles at 95–100% of cost and used vehicles at roughly 75–90% (independents usually at the lower end). Exact APRs are lender- and credit-specific — confirm before you rely on a number.
Holding cost is where gross quietly disappears
Every day a car sits, floor-plan interest plus depreciation eat the spread you’re counting on.
All-in holding cost — floor-plan interest, insurance, recon, opportunity cost, and above all depreciation — is commonly estimated at $30–$40 per vehicle per day. Floor-plan interest is the smaller slice; cost erosion is the bigger one. Front-end gross tends to collapse after 30–45 days in stock, and once a unit passes that line, price cuts accelerate and recovery becomes unlikely.
That’s why two cars with the same spread aren’t equally good deals: the one that sells in 20 days nets far more than the one that sits 70. Our dealer profit calculator folds this holding cost into a unit’s true net.
Turn faster
Aim to sell most units in under 45 days. The gold-standard inventory turn is ~12× a year (about every 30 days) — the historical industry average ran closer to 63 days. Every day cut is interest and depreciation saved.
Price to the market from day one
Front-end gross tends to collapse after 30–45 days. Right-pricing on day one beats chasing the market down with repeated cuts later.
Shrink time-to-frontline
A car earns nothing while it waits for recon and photos. Speeding reconditioning cuts the days a unit sits before it can even sell.
Wholesale the dogs
Stacking curtailment-skip and extension fees on an aged unit rarely recovers gross. Cutting it loose frees the line for a faster mover.
Major floor plan providers
The largest lenders serving independent used-car dealers. Terms differ on advance rates, curtailments, and daily-fee vs term plans — compare and confirm current terms directly.
Floor plan financing FAQ
How inventory-financing interest, curtailments, and holding cost work.
How is floor plan interest calculated?
Interest accrues daily on the amount advanced for each vehicle, for every day it sits on your lot. A common structure is roughly 27 cents per $1,000 financed per day — so a $10,000 unit costs about $2.70/day, or about $162 over 60 days. Note some lenders use a 360-day basis to derive the daily rate, which makes the effective annual cost slightly higher than the quoted rate; check your note for the day-count convention.
What is a curtailment on a floor plan?
A curtailment is a required principal paydown on a vehicle that hasn’t sold by the end of its term. Schedules vary by lender — often a percentage of the original amount (commonly 5–20%) due at intervals like 30/60/90/120 days, or a flat dollar amount such as $500–$750. Paying it (plus accrued interest and fees) typically buys another term. Some lenders let you skip or defer it for a fee to preserve cash flow.
What is a floor check or audit?
It’s when the lender physically verifies that every floored vehicle is present and that you’re in compliance. Per bank-regulator guidance, checks happen at least quarterly and often monthly or more, depending on your terms and risk. Selling a car without paying off its floor-plan balance (“sold out of trust”) is a serious default a floor check is designed to catch — and it can cost you your line.
What does a floor plan cost in 2026?
Most lines are priced around SOFR plus 200–400 basis points depending on your credit, plus a flat flooring fee per unit, curtailment/extension fees, and small charges like title processing. Your exact APR depends on the lender, program, and credit, so confirm the all-in cost with the provider. Carrying costs rose sharply recently — net floor-plan expense per vehicle jumped about 39% (roughly $139/unit) in one recent quarter.
How much does it cost to hold a car on the lot each day?
All-in holding cost — floor-plan interest plus insurance, depreciation, recon, and opportunity cost — is commonly estimated at $30–$40 per vehicle per day. Floor-plan interest alone is the smaller piece; depreciation/cost erosion is the bigger one, and front-end gross tends to collapse after 30–45 days in stock.
How fast should I turn my used inventory?
Aim to sell most units in under 45 days; consistently running past 60 days usually means you overpaid or mispriced. The gold standard is an inventory turn of about 12× a year — turning the lot roughly every 30 days. Faster turn directly cuts floor-plan interest and depreciation, protecting gross.
Sources
- OCC — Floor Plan Lending handbook
- FDIC — Floor Plan Lending procedures
- NextGear Capital — What is floorplanning
- Cox Automotive — Floor plan formulas
Estimate only. Per-diem rates, fees, advance rates, and holding-cost figures are typical industry ranges as of 2026 and vary by lender, program, and your credit — confirm the exact terms in your floor-plan agreement. This calculator uses simple daily interest on a 365-day year.
Track floor-plan cost on every car
AutoDealer.io tracks carrying cost and aging per unit, so a slow-moving car can’t quietly erode your gross. Start your free trial.