Floor planning costs can run into hundreds of thousands of dollars a month for a big multi-location dealer with large inventories.
Rather than offering loans for each individual vehicle purchase, most floor planning companies supply dealers with a revolving line of credit[5] that they can use to acquire inventory, such as through automobile auctions.
Curtailment schedules vary by floor plan providers, but they generally range from 5–20% of the original loan proceeds on each vehicle every 30/60/90/120 days.
If curtailments are not made or the dealer enters into default on their obligations, floor plan companies will take action to minimize their exposure.
Dealers of recreational vehicles, boats, major appliances, and manufactured/mobile homes may also use floor planning for all or part of their inventories.