What is a "flooring company" and how do they affect the cost of the car?

What is a "flooring company" and how do they affect the cost of the car?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: What does "total" mean on the sticker price?; What is a "test drive"?; What is the difference between unleaded, regular, super and diesel? and more...

It's kind of like the flooring company fronts the manufacturer the cost of the vehicle, and then the dealer pays a fee to the flooring company to have the vehicle here. Like all the vehicles that are here at this store, he's taken them from Honda. Honda's charged him for them, but then he passes the charge to his flooring company. He pays maybe $200-300 per vehicle per month to keep it here until he sells it. So when a dealer's got a vehicle on the lot for six or seven months, he's anxious to sell, because he's paid a lot of flooring cost on that.