Aged inventory and floor plan cost: a dealer's field guide

How do you decide what to do with an aged new unit? Measure what holding costs from today forward: daily floor plan interest (amount financed x annual rate / 365) plus any curtailment cash due. Compare that with the cost to trade it or send it to auction, then pick the cheapest path and set a review date.

Aged inventory is a problem every store has and few measure the same way twice. One manager looks at days in stock, another at the floor plan statement, a third goes by feel. This guide gives you a consistent way to measure an aged new unit and a repeatable process for deciding. Examples use made-up numbers to show the method. It doesn't quote market statistics and isn't financial or legal advice. Your floor plan agreement is the authority on how your lender calculates interest and curtailment.

What does "aged" actually mean?

There's no universal definition. What matters is that your store has a number and uses it consistently. A practical definition has three parts:

A target turn. The days you plan for a new unit to be in stock before it sells. Set it by brand, model or segment if they behave differently.

An aged threshold. The day a unit moves from "normal" to "needs a decision."

Checkpoints. Days that change the math: a curtailment date, the next model year, the end of a manufacturer program.

A unit isn't a problem because it crossed a line. It's a problem when keeping it costs more than moving it and no one has decided.

Which costs can I measure?

How much is daily floor plan interest?

Interest accrues on the amount drawn for each unit, at an annual rate, usually daily.

Daily interest = amount financed × annual rate ÷ 365

Some lenders use a 360-day year, bill monthly on average balance, or tie rates to a changing benchmark. For decisions, 365 is close enough. For accounting, use your statement.

Should interest I've already paid affect the decision?

No. The $1,052 above is spent whether you hold or move the unit. The decision is only about what happens from today. Interest to date is still useful for setting target turns and ordering, but it shouldn't change today's call.

What is curtailment?

Many floor plan agreements require a paydown on units financed for a set number of days: a percentage at one checkpoint, or several smaller paydowns.

Curtailment is a principal payment, not an expense, so the money isn't lost. But it is cash leaving the store into an unsold unit. If cash is tight, a curtailment date can matter more than the interest.

What does it cost to move a unit?

Selling on Locates.io is free. The buyer pays the $199-per-unit platform fee and any freight charge. Your cost to move is what you give up on price: zero at invoice, or the discount if you price under invoice. See pricing.

What is the auction or wholesale gap?

The main cost is the gap between what you owe and what you receive, plus seller fees and transport. Only you can estimate it for your brand and market, so use your own recent results rather than a general rule.

Which costs are real but hard to measure?

Model-year rollover. When the next model year arrives, the current unit looks old to shoppers and your negotiating room narrows.

Program changes. A manufacturer program that applies this month may not next month.

Lot space. An aged unit occupies a space a fresher unit could use, and still needs washing, moving and, for EVs, charging.

Attention. Every aged unit takes a little of a manager's time each week.

Information. If local competitors can see your aged units, they learn about your position. On Locates.io, listings are blind, and a radius block can keep nearby stores from seeing them at all.

You don't need a number for each. They all push the same way: the longer a unit sits, the more it costs.

How do I run a weekly aged-inventory review?

A short, regular review beats a long, occasional one. This takes about twenty minutes.

1. Pull the list. Every new unit past your aged threshold, with days in stock, amount financed and the next checkpoint.
2. Sort by next checkpoint. A curtailment in eight days needs a decision before a unit with no checkpoint for two months.
3. Make a call on each unit. Hold, price to trade, take offers, or auction or wholesale (see below).
4. Set the next review date. No unit leaves without one.
5. Look back. Once a month, check what you decided last month. Which holds retailed? Which trades closed?

The calls:

• Hold: there's a realistic retail path and holding costs less than moving. Write down the reason and a review date.
• Price to trade: list it with a price, or adjust the price.
• Open to offers: you'll trade it, but you want the market to tell you the number.
• Auction or wholesale: it won't trade at a number you'd accept, and holding costs too much.

How do I compare hold, trade and auction?

For each uncertain unit, compare three paths over the same window.

The Hold vs Move calculator runs this comparison for a group of units with your own numbers, including an optional curtailment.

What does a full decision look like for two units?

Seeing the method on two different units shows why the same rule doesn't fit both. Both examples use made-up numbers.

Unit A needs a decision this week. Even if holding looks cheap on interest, the curtailment makes the next 20 days expensive in cash terms. Moving it now, or committing to a specific price by a specific date, is the sensible call.

Unit B can wait for the next review, as long as you write down why you are holding it and when you will look again. Waiting is a decision only if it has a reason and a date.

The lesson is to sort by what happens next, not by days in stock alone.

What should I check before moving any aged unit?

Run through this short checklist before you list, price or send a unit anywhere.

1. Confirm the amount financed from your statement, not from memory.
2. Confirm the next checkpoint: curtailment date, model-year arrival or program end.
3. Write down your floor: the lowest net result you would accept.
4. Decide your price against invoice if you trade, and what the buyer will see as a delivered price.
5. Pick the exit: hold, trade at a set price, or auction or wholesale.
6. Set a review date and put it on a calendar someone else can see.

If you can't fill in the first three lines, you aren't ready to decide yet, and that is worth knowing.

How can Locates.io help with aged units?

Locates.io is a blind dealer-to-dealer marketplace; see how it works. A few features suit this situation.

Open to offers. List an aged unit without committing to a price. Buyers send blind offers against invoice.

Month-end mode. Mark a unit motivated with a price that runs through month-end. It reverts to your regular price automatically.

Radius block. Hide aged units from nearby dealers so local competitors don't learn what you're carrying.

Blind until signed. Buyers never see your store's name, city or VINs until both sides have signed.

Private units. Keep a unit out of the marketplace while you decide, and still use it in your Hold vs Move numbers.

Smart Mixes. Locates.io can blend aged, under-invoice or EV units into a load that reaches a buyer's target, so an aged unit moves with units that buyer wants.

For a planning routine, read the month-end playbook.

How do I prevent the next aged unit?

• Track why units aged. Wrong trim, color, price or timing? Patterns tell you what to order differently.
• Act at the threshold, not after. The first decision point is the cheapest.
• Trade for gaps, not only out of surplus. If you're short a trim customers want, buying it from another store can prevent a lost sale.
• Review the review. Once a quarter, check whether your thresholds still match how your units sell.

FAQ

How do I calculate daily floor plan interest?

Multiply the amount financed by the annual rate and divide by 365. Your lender may use 360 days or bill differently, so use your statement for accounting and this formula for decisions.

Should interest I've already paid affect whether I hold or move a unit?

No. Interest already paid is spent either way. The decision is about costs from today forward: more interest, curtailment cash, and the cost of moving the unit.

Is curtailment a cost?

It's a principal paydown, not an expense, so the money isn't lost. But it's cash leaving the store and tied up in an unsold unit, which matters when cash is tight.

What counts as an aged unit?

Whatever threshold your store sets and uses consistently, often tied to a target turn by brand or segment, with checkpoints for curtailment and model-year arrivals.

How often should we review aged inventory?

Weekly works for most stores. A short review that makes a call on every unit beats a long one once a month.

What does it cost to move an aged unit on Locates.io?

Nothing in fees. Selling is free. The buyer pays the $199 per unit platform fee and any freight charge. There's no monthly fee.

Can I list an aged unit without setting a price?

Yes. Mark it open to offers, and buyers send blind offers against invoice.

Will local competitors see my aged units?

Not by name: listings are blind until both sides sign. With a radius block, dealers within 25 to 100 miles of your store won't see the units at all.

Is the Hold vs Move calculator a quote?

No. It uses your own inputs and example defaults to compare costs. Freight in the calculator is an estimate; the freight charge on a real deal is fixed at terms. More answers are in the FAQ.