A dealership's floor plan is always valued in the millions: It consists of all the product that they have in the inventory, including new and used cars. Simply put, the dealer has a hundred cars in its inventory and the average cost per unit is $30,000. Therefore, the dealer's floor plan would be valued at $3.0 million dollars. There isn't a dealership on the planet that has $3.0 million dollars of liquid capital that they would give to the manufacturer to buy their cars for cash with the hopes of selling them quickly and turning a profit. The dealers usually have a program established with a bank and with the manufacturer. This program allows them to borrow a large sum of money with several stipulations and fees so they don't have to write a check out of their bank account for every car they buy. This "loan" is a dealership's floor plan. Each dealer's floor plan has similarities but oftentimes differ greatly.

Some dealers have a floor plan where they borrow a large sum of money to pay the manufacturers and for the first 30-60 days of that loan they pay a small amount of interest to the bank on that money. This explains the dealers tendency to move units that have been in their inventory for over sixty days. As long as the dealership sells through their floor plan the car they bought from the manufacturer within a 60 day period, they avoid paying a large amount of interest on that one car. Most dealers have set up their inventory where it is essential for them to get rid of cars that are close to turning 60 days old. Knowing this information can help in your negotiations. A dealer would be willing to take a much smaller profit on a car that has been in their inventory for 65 days, than one that has been there for 7 days.

A 60-day floor plan is by no means the rule but is most common among dealers. When you are at the dealership, request to see an inventory report. This will list all of the cars that the dealership currently has on the floor at the dealership. It will also list the age of each individual car. If you are looking for a 2005 black Honda Accord and the dealership has two, one that has been inventory in 8 days, the other in 61 days, tell the dealership you want to negotiate on the younger car. Once the negotiations are finished on this car, tell the dealer that you will take the older unit if they lower the price a couple hundred dollars more. If the dealership's floor plan is set up on 60 days, they will most likely take that deal, just so they save a lot of interest on that older unit.