| Author | Message | ||
| Kds (Kds)
Member Username: Kds Post Number: 375 Registered: 5-2003 |
Mike..... Dealers can floor plan or own their used and or news cars, whatever they think is best. Normally you floor plan your new cafrs and own your used cars......it all depends on your operating philosophy, quality of your sales team and pocket book I guess.....as well as manufacturer's programs. | ||
| Mike Procopio (Pupz308)
Member Username: Pupz308 Post Number: 602 Registered: 10-2002 |
KDS, Just the kind of answer I was looking for. Are you saying then, that the dealers don't "own" the cars they're selling outright--they're on a loan basis from the bank? I would think you'd like to have enough "cash on hand" to cover some/all of the cars... Then again, 8 million in cash on hand for a car dealership *does* seem a little high... I'm just trying to figure out how much my 30k 308 cost the dealer (Ferrari of Central Florida) after sitting on the floor for a year before it flipped... | ||
| Kds (Kds)
Member Username: Kds Post Number: 374 Registered: 5-2003 |
Mike.... To elaborate a bit without editing my other post......the last store I was a manager at had about 8 million of new and used inventory. It's small potatoes compared to some of the mega high end US stores....but a lot of money none the less. That's about $41,000 a month of "juice" to the bank. | ||
| Kds (Kds)
Member Username: Kds Post Number: 372 Registered: 5-2003 |
Well...it all depends on your cost of funds obviously, and your relationship with your banker regarding how much margin, if any, they require for your floorplan. Here in Canada a floating rate of say, Prime + 2 % (6.75 % more or less) could be a good place to start for a healthy company with good capitalization. Therefore, for every $10,000 of indebtedness it costs you $55 per month. On a balance of $200K that's $1,100 per month. Then you also have to count the lost opportunity, or the "churn" as I call it. The quicker you flip the capital over and over, the higher your net effective yield on the borrowed capital. If we actually had the sum of $200K for example tied up in that 355, it would mean $6,600 of wasted interest on one F-car in a dropping "winter" market versus cashing out and buying say, 3-4 cars for $40-50K each and flipping them instead, makes a big difference. Is that a fair answer ? | ||
| Anthony Randazzo (Antroc)
Junior Member Username: Antroc Post Number: 73 Registered: 4-2002 |
I was in Italy the last two weeks and went to the Ferrari Challenge finals in Mugello. There were about 4 F355 spiders that were yellow with blue and 1 360spider the same way. must be more popular in Europe Ciao Anthony | ||
| Mike Procopio (Pupz308)
Member Username: Pupz308 Post Number: 600 Registered: 10-2002 |
KDS, take a typical Ferrari Dealer for example... How much exactly does it cost to keep a car on the floor for a month? In my case, my (brown!) 308 sat on the floor for one year... | ||
| Kds (Kds)
Member Username: Kds Post Number: 371 Registered: 5-2003 |
Robin.... I know how much is went for, but won't disclose the customer's transaction price for obvious reasons...suffice to say....we lost "a lot" of money. It's cold here now....really cold actually and will probably snow in the next 10-14 days. Another 6 months of flooring cost wasn't worth it. | ||
| Robin Overcash (Robin)
Member Username: Robin Post Number: 300 Registered: 1-2003 |
It would be interesting to know how much someone was willing to pay for a yellow on blue 355s....  -R | ||
| Alan Leach (Speedy308)
Member Username: Speedy308 Post Number: 306 Registered: 12-2002 |
Remember, the perfect match for Ms. Frog ...is Mr. Frog! | ||
| Spasso (Djparks)
Member Username: Djparks Post Number: 692 Registered: 2-2003 |
............and? | ||
| Kds (Kds)
Member Username: Kds Post Number: 365 Registered: 5-2003 |
That I posted about a week or so back when ? Well....we just sold it. It wasn't my deal unfortunately..... Funny how that always happens....isn't it. Looks like the right finally guy came along. |