Floor plan financing interest expense remained fully deductible under tax reform.
What is floor plan financing interest.
But it came at a cost.
Simply it is a way for an auto dealer to use a lender s funds to finance the cars and until each of them is sold the lender holds title to the cars.
What you don t realize is that like most new car dealers a floor plan was used to finance the cars.
So how does floor plan financing work.
Specialty lenders traditional banks and finance arms of manufacturers provide the.
Floor plan financing interest expense.
Floor plan financing interest expense is interest on debt used to finance the acquisition of motor vehicles held for sale or lease where the debt is secured by the acquired inventory.
Much like a credit card a floor plan financing company extends a line of credit to a car dealer.
Floor planning is a form of retailer financing for large ticket items displayed on showroom floors or lots.
The money borrowed from the bank collects interest and one has the choice to either make a minimum payment or pay off the balance in full when the bill is due.