When a New stock item is purchased/delivered from the manufacturer, typically the manufacturer will invoice the financier directly. The dealer has no invoice or purchase until such time as the vehicle is eventually sold, at which point the liability must be paid.
Used vehicles are different - the dealer first purchases (or trades) the stock item, then invoices the financier for the floor plan amount. When the stock item is sold, the liability is paid out.
To readily identify in Dealerlogic software the 2 types of floor plan, we call them 2-way and 4-way, indicating the number of transactions involved in the purchase, sale and floor plan of the stock item.
Sell stock item to customer Pay financier for floor plan liability |
Purchase stock item Invoice financier for floor plan Sell stock item to customer Pay financier for floor plan liability |