Golf Cart Floor Plan Financing: How It Works and What Aged Units Cost You

Golf cart floor plan financing is a line of credit that pays for the carts on your lot. You pay it back unit by unit as carts sell, and you pay to carry every cart for every day it sits. A full lot is the upside. The cart that will not move is the bill. How to get that cart moving is in aged golf cart inventory.

What is golf cart floor plan financing?

It is a way to stock the lot with a lender’s money and keep your own in the bank.

A lender gives your dealership a line. When carts come off the truck, the lender pays for them, and each cart goes on the line as its own unit. Its own serial number. Its own balance. Its own start date.

When that cart sells, you pay off that one cart and it comes off the line. The room it took up is open for the next one.

So a floor plan for golf cart dealers is not one big loan. It is a stack of small ones, one per cart, and every one has a clock on it.

This is not about financing the buyer. That is a different subject, covered in golf cart dealer financing and warranty. This article is about financing your own inventory, the carts on your lot before anybody buys them.

How does a floor plan work, cart by cart?

Four steps. The same four for every cart.

1. The line. The lender sets how much you can carry at one time. How much, and what counts against it, is in your agreement.
2. The cart lands. A truck backs in with six carts. Each one goes on the line as a unit, known by its serial number.
3. The cart sits. While it is on the line, you pay interest to carry it. What you pay, and how it is figured, is in your agreement.
4. The cart sells. You pay off that unit, the way your agreement says. The cart leaves on a trailer.

Picture a Tuesday, 7:15 in the morning. You are walking the back row with a coffee before the gate opens. There is a forest green six-seater in the corner by the fence. It was in that corner when the pollen came. It was in that corner when the kids went back to school. Same seats. Same tires. Same sticker on the windshield.

That cart has been on the line the whole time. Steps one, two and three happened. Step four did not.

What is a floor plan for golf cart dealers good for, and what does it punish?

It is good for a full lot. It punishes a slow one.

What it is good for. A buyer who drives forty minutes wants to see carts. Four-seaters and six-seaters. Lifted and not lifted. A thin lot sends her to the dealer down the road. A floor plan lets you stock that selection without writing a check for every cart on the truck, so your cash stays free for payroll, the shop and parts.

What it punishes. Carts that sit. The line does not care which cart it is or why you ordered it. It charges you for time. A cart that sells fast carries for a short time. A cart that sits through two seasons carries the whole way.

So the same floor plan pays the dealer who turns carts and bills the dealer who collects them. The difference is not the agreement. It is how fast the oldest carts leave. Keeping a lot turning is the subject of golf cart dealer inventory management.

Why is the cart that has sat longest the most expensive cart on the lot?

Because its sticker stayed the same and its cost did not.

Go back to the green six-seater. The sticker on the windshield is the one you printed the week it landed. On the line, it has been running up a bill ever since.

Here is a made-up example. Every number in it is invented, and none of it is a real cost. Say a cart costs you a made-up twelve dollars a week to carry. It sits twenty weeks. That is two hundred forty dollars gone, and you still own the cart. Your real number is in your agreement. Find it.

That is only the part on the statement. The rest of your aged inventory cost is quieter.

• The room on the line. The four-seater buyers keep asking for is not on your lot, because the six-seater is.
• The cart itself. Batteries sit. Tires flat-spot. Seats fade in the sun. A cart that sat needs shop time before it can go out on a trailer.
• The model year. A newer one lands next to it. Now yours is last year’s cart with this year’s sticker.
• Your salespeople. They stopped walking buyers to it a long time ago. Nobody decided that. It just happened.

Add those up and the oldest cart on the lot is the most expensive one. The sticker never moved, so nothing told you. And every week it sat came out of the profit on that cart before a buyer walked in. A higher-ticket unit runs that bill up faster, which is one of the four checks in should a golf cart dealership sell LSVs.

How do you count days in stock for every cart?

One list. Every cart. Oldest on top.

For each cart, write down four things: the stock number, what it is (seats, lift, color, battery, new or used), the date it landed and the asking price today. Then count the days from the date it landed to today. That is days in stock. Sort the list so the biggest number is on top.

A spreadsheet does this. So does a yellow pad. What matters is that it is one page, every cart is on it, and somebody updates it the same day every week.

Count from the day the truck backed in. Not the day somebody got around to the photos.

Count used carts and trades too. Whether they can go on your line is in your agreement. Either way it is your money sitting on four tires. Putting a number on a trade the day it comes in is covered in golf cart trade-in appraisal.

Decide what “aged” means at your store. Pick a number of days and write it on top of the page. This article will not give you one, because it depends on your season, your mix of carts and your agreement. If your agreement has a date when something changes on a cart that has sat, ask your lender what it is and set your own line well ahead of it.

Now look at the top of the list. Those few carts are where the floor plan is costing you. The list belongs with the other numbers you check every week, in golf cart dealer KPIs.

Who runs the weekly aged-unit review, and what gets decided?

One person, one day, ten minutes.

The person is whoever can change a price and move a cart without asking permission. The owner or the sales manager. Not a committee.

The day is the same day every week. Monday morning works, because Saturday’s traffic is fresh and there is a full week ahead.

Do it standing on the lot, list in hand. Only the carts past your line, from the top. For each one, ask four questions.

• Did anybody look at it online this week?
• Did anybody ask about it?
• Did a salesperson show it?
• What did we change on it last week?

Then decide one thing for that cart. Out loud. With a name next to it.

1. New photos. The old ones were shot in bad light in front of the dumpster.
2. New price. It changes today, on the windshield and on the website, in the same hour.
3. Front row. It moves to where the cars drive past.
4. Featured on the site. Top of the inventory page and on the home page this week.
5. Wholesale it. It goes to another dealer at a number that ends the carrying.

Write the decision on the list. Next Monday, the first question for that cart is: did we do it?

That is the whole meeting. No cart sits another week unless somebody decided, on purpose, to let it.

What do you do with an aged cart before you cut the price?

Work it in order. The price cut is near the end.

A price cut comes straight out of the deal. And price may not be the problem. Maybe nobody saw the cart.

1. Look at its page. Open the cart on your phone the way a buyer would. Is it there? Is the price showing? Are the photos real? A cart with no page of its own was never for sale online, which is why golf cart dealer websites should be built around the unit and not the brand.
2. Shoot it again. Wash it, pull it out front, use good light. The shot list is in how to photograph golf carts for sale.
3. Rewrite it. Seats, lift, battery, color, hours if it is used. See how to write a golf cart listing.
4. Show the price. If the page says “call for price,” she calls somebody else. More in should golf cart dealers show prices online.
5. Move it. Front row on the lot. Top of the inventory page.
6. Shoot a walk-around. One salesperson, one cart, one short video, sent to every buyer who asked about a cart like it. See golf cart video marketing.
7. Tell the floor. Every salesperson knows this is the cart to show this week.
8. Then the price. One clear move. Not a nickel every Friday.
9. Then wholesale. Let it go and put the room on the line back to work.

Used carts and trades get the same order. Reaching the buyers for those is in used golf cart dealer marketing. Setting their numbers is in how to price used golf carts.

A dealership selling about 24 carts a month sold 72 aged carts in 45 days, in winter, worth $587,284. What was done: the online showroom was fixed first, then demand was turned on, buyers got a video before they came in, and the sales team got one sales process. The full write-up is the 72-cart case study.

Notice what came first: the online showroom. Fix the cart’s page, then send buyers to it.

What should you ask a lender before you sign or renew?

Bring a list and get the answers in writing. This article will not tell you what the answers should be. Yours is the only agreement that counts.

• How big is the line, and what counts against it?
• Can used carts and trades go on it?
• When does a cart start costing me, and how is that figured?
• Can you show me what one cart from my last order costs to carry for one month, in dollars?
• What other charges are there?
• When a cart sells, how soon do you need to be paid?
• What changes on a cart that sits a long time, and when?
• Do I ever have to pay down a cart before it sells?
• How do you check the carts on my lot against your list, and how often?
• What would make you change the line or end it?

Read the agreement yourself. All of it. Have your accountant read it too. Then sign.

What should you ask yourself before you order more carts on the line?

Room on the line is not a reason to order.

The rep calls about a truckload, the line has room, and saying yes costs nothing today. It costs something every day after the truck backs in. So pull the one-page list first and ask five things.

1. What is on top of the list right now? If your oldest carts are six-seaters in dark colors, do not order more six-seaters in dark colors.
2. What left on a trailer lately? Not what you like. What sold.
3. What are buyers asking for that we do not have? Ask the salespeople. They hear it every Saturday.
4. When does the truck land? Carts that land as the season ends sit until the next one starts. Planning for that stretch is in golf cart dealer slow season.
5. Is the page ready the day they land? Photos, price and details, up the same day. A cart waiting in the back for photos is a cart you are carrying that no buyer can see.

If you cannot answer the first three from the list, you are guessing with the lender’s money and paying for the guess.

That discipline is a big part of how to grow a golf cart dealership that is already doing well.

The golf cart dealer floor plan on one page

Copy this. Tape it by the desk where orders get placed.

The list

• Every cart: stock number, what it is, date landed, days in stock, price.
• Oldest on top. Updated the same day every week.
• Our number of days for “aged” is written on top, ahead of any date in our agreement.

The ten-minute review

• Same day, same person, on the lot. Aged carts only.
• Four questions: looked at online, asked about, shown, what changed.
• One decision per cart, with a name: new photos, new price, front row, featured on the site, or wholesale.

Before a price cut

• Page, photos, words, price showing, front row, walk-around video, tell the floor.
• Then one clear price move. Then wholesale.

Before any order

• What is aged? What sold? What are buyers asking for? When does the truck land?

With the lender

• We know what one cart costs to carry for one month, in dollars.
• We pay off every sold cart the way the agreement says, every time.

What are the common floor plan mistakes at a golf cart dealership?

Six of them. Every one can be fixed from the lot.

1. Treating the line like free carts. Nothing left your checking account when the truck backed in. The bill started anyway.
2. Not knowing the dates. If you cannot say how long your oldest cart has been there, the lender knows your lot better than you do.
3. Letting aged carts hide. Back row, behind the shop, under a cover. A cart nobody sees is a cart nobody buys.
4. Cutting the price first. It skips the photos, the page and the front row, and gives away the deal before anybody looked.
5. Holding out for the sticker. The cart will not be worth more after another winter on the line.
6. Paying off a sold cart late. When a cart sells, pay it off the way your agreement says. Every cart. Every time.

Where does Cart Launch fit?

We do not lend money. We do not set up a floor plan and we do not talk to your lender. We do not buy your carts or price them. Your team does that.

What we build is the online showroom those carts sell from. Every cart has its own page with real photos, a real price and the details in text. That includes the one that has sat longest. Your team keeps it current from a phone, so when the Monday review says new photos and a new price, the change gets made from the lot. And you see which carts got looked at and who reached out. The domain and the content stay yours.

Why every cart needs a page a buyer can shop is laid out in golf cart inventory website.

If the oldest carts on your lot are the hardest ones to find online, book a call. What a call covers is laid out on the call.

Keep reading

• Golf cart dealer inventory management: aged units and turn
• Used golf cart dealer marketing: the units buyers search for
• How a golf cart dealership sold 72 aged golf carts in 45 days