Index
What is stock finance and how does it differ from a conventional loan
How the operation works step by step
How much it costs: interest rates, fees and real costs
When it makes sense to finance stock and when it does not
Difference between stock finance and a credit line
How to negotiate with an inventory finance provider
Dealcar and managing financed stock
Frequently asked questions
What is stock finance and how does it differ from a conventional loan
Stock finance, also known as inventory finance or floor planning, is a specific credit line for dealerships that allows them to purchase vehicles for stock, paying for each one only whilst it remains unsold. When the car is sold, the financed amount for that vehicle is settled and the credit becomes available to buy the next one.
Unlike a personal loan or a business mortgage, stock finance does not involve locking up a fixed amount for a set term. The outstanding debt at any given moment depends exactly on how many cars you have in inventory and how long they have been there. If you sell quickly, you pay little in interest. If you have cars sitting idle, the cost grows proportionally.
Here you have the complete calculation of the real cost of a car sitting in stock, which goes beyond financing interest.
A loan of 100,000 euros over 3 years has a fixed cost regardless of how your business rotates. A stock finance line of 100,000 euros can cost you 1,500 euros a month if you have 20 cars in stock with a 45-day rotation, or 4,000 euros if the rotation stretches to 120 days. The cost is variable and directly linked to your operational efficiency.
How the operation works step by step
The usual process has four stages:
Approval of the line. The finance provider evaluates the dealership: turnover, payment default history, business age and, in some cases, the quality of the usual stock. A maximum limit is approved, which can range from 50,000 euros for a small dealership to several million for larger groups.
Activation per vehicle. When the dealership buys a car, it communicates the operation to the finance provider, which advances the money directly to the seller (private seller, auction, leasing company). The car remains in the dealership's inventory but with an associated financial liability.
Interest accrual. From the day of activation, the vehicle starts to generate daily interest. Most stock finance lines have a grace period of between 30 and 90 days during which interest rates are lower or even zero, to match the preparation and advertising period of the vehicle.
Settlement on sale. The moment the car is sold to the final customer, the dealership settles the financed amount with the provider and pockets the difference. The credit becomes available for the next vehicle.
If the vehicle is not sold within the agreed period (usually between 90 and 180 days), the finance company can claim the vehicle back or demand payment of the capital plus accumulated interest.
How much it costs: interest rates, fees and real costs
The real cost of stock finance has several components that should be calculated separately to avoid surprises.
Nominal interest rate. In 2025 and 2026, with Euribor stabilising after years of increases, stock finance lines for independent dealerships are being negotiated at between 6% and 9% per annum. For larger groups or those with higher volume, it can go down to 4.5% or 5%.
Arrangement fee. Most providers charge between 0.5% and 1.5% of the line limit when opening it. On a line of 150,000 euros, that means between 750 and 2,250 euros in initial cost.
Monitoring and audit costs. Some finance providers carry out periodic checks of the financed stock and charge a fee for this, between 200 and 500 euros per quarter.
Specific example: a dealership with a line of 120,000 euros, 15 cars in stock with an average value of 8,000 euros each and an average rotation of 60 days would pay approximately: (120,000 x 0.07) / 365 x 60 = 1,380 euros in interest for that period. If rotation drops to 45 days, the cost drops to 1,035 euros. If it rises to 90 days, it goes up to 2,060 euros.
Before calculating the cost of financing, it is useful to be clear on how to calculate the gross and net margin per vehicle
When it makes sense to finance stock and when it does not
Stock finance makes sense when the margin per vehicle is clearly higher than the cost of financing and when stock rotation is under control. If you sell cars with an average net margin of 1,800 euros and the financing cost per car is 120 euros, the equation is favourable.
It does not make sense when you consistently have cars sitting idle for more than 120 days. In this case, the financing cost eats up the margin and the real problem is not the financing but stock selection or the selling price. Financing cars that do not rotate multiplies the problem.
Stock rotation is the factor that determines whether stock finance is profitable: here is how to reduce days in stock with dynamic pricing
It also does not make sense if you can buy the same volume of stock with own capital without compromising the business's operational liquidity. If you have enough cash to maintain inventory without financial strain, debt only adds cost. Stock finance is a growth tool, not a replacement for own capital.
The ideal profile for stock finance is the dealership that has real demand, sells consistently and wants to scale the volume of vehicles without waiting to accumulate enough capital to do so.
Difference between stock finance and a credit line
A credit line is a flexible financing facility that the business can use for any purpose: paying suppliers, covering cash flow, buying stock. The interest rate is usually slightly lower than that of stock finance, but it is not linked to any specific asset.
Understanding the dealership cash flow is the starting point to decide which financing tool fits best
Stock finance is specifically designed for purchasing vehicles. The finance provider knows the vehicle, its value and its condition, and this allows them to assume the risk differently. Furthermore, in many cases, the vehicle itself acts as implicit collateral for the operation.
A credit line offers more flexibility but less available volume for stock. Stock finance offers more inventory capacity but is tied to the vehicle purchase and sale cycle. Many growing dealerships use both tools in a complementary way: the credit line for day-to-day operations and stock finance for inventory.
How to negotiate with an inventory finance provider
The main entities operating in Spain in inventory finance for dealerships are Santander Consumer, BBVA Consumer Finance, Dealer Capital and BCA Finance. Each has different conditions and varying negotiation margins.
To negotiate well, it is advisable to present yourself with structured documentation: the last two financial years' accounts, list of vehicles in stock with purchase value, sales history for the last 12 months and estimation of the target volume. The clearer it is that the business rotates well, the better conditions you will get.
Having your dealership's KPIs organised before meeting with a finance provider significantly improves the conditions they offer you
The most common negotiable points are the grace period (trying to extend it to 90 days), the interest rate (comparing at least two offers before signing) and the line limits (asking for flexibility to temporarily expand during high demand periods like summer or the end of the year).
Avoid signing with the first entity that makes you an offer. The inventory finance market is more competitive than it was five years ago and there is real room to improve conditions if you negotiate with two or three entities in parallel.
Discover DealFlex and secure financing for your stock without tying up your capital. More information at dealcar.io/deal-flex.
Dealcar and managing financed stock
When you have part of your stock financed, controlling which cars have been in inventory for how many days is not a matter of tidiness: it is a matter of direct cost. A car that has been in stock for 85 days and is financed at 7% per annum generates a daily cost of approximately 1.50 euros for every 1,000 euros of purchase value. If it is worth 12,000 euros, that is 18 euros a day in pure financing cost.
With Dealcar you can see the days in stock of each vehicle in real time, allowing you to identify which cars need urgent action: price adjustment, greater visibility on portals or a call to the buyer who already showed interest. Reducing the average rotation of your stock by 20 days can save you several hundred euros in interest per month.
If you want to see how Dealcar's stock control works, request a demo at dealcar.io.
Frequently asked questions
Which dealerships can access stock finance?
Finance providers usually require a minimum of 2 years of business activity, a minimum annual turnover of between 300,000 and 500,000 euros and a clean credit history. Some specialised providers have specific lines for smaller dealerships, with more accessible entry requirements.
Is the vehicle mine while it is financed?
In most stock finance agreements, the vehicle is registered in your name and you can sell it as normal, but the finance provider holds a charge over it. Upon sale, you are obliged to settle the financed amount for that vehicle before releasing the funds. If you attempt to sell the car without settling the associated debt, you breach the contract.
What happens if a financed car is damaged or stolen?
Conditions vary depending on the contract, but generally, the dealership is obliged to insure the financed stock. If the vehicle is damaged or stolen, the insurance covers the value and the finance provider recovers their share. Therefore, it is important to check that the stock insurance policy explicitly covers financed vehicles.
Can I cancel the stock finance contract early?
Yes, generally you can settle any vehicle early or even the entire line. Some entities charge an early termination penalty for the line, usually between 0.25% and 1% of the outstanding amount. Review this point before signing.
How long does it take to approve a stock finance line?
It depends on the provider and the applicant's profile. With all documentation complete, the process can be closed within 2 to 6 weeks. It is advisable to start discussions well in advance, not when you need the money urgently.
