What happens at a floor plan audit
(and when a car is missing)

What a floor plan audit is, and who performs it

A floor plan is a revolving line of credit a dealership uses to buy the vehicles on its lot. The lender advances the purchase price of each unit, holds a security interest in it (and usually the title or MSO), and is paid off when the vehicle sells. Because the collateral is hundreds of cars that drive away one at a time, the lender needs regular proof that the cars it has financed still exist and have not already been sold.

That proof is the floor plan audit: a physical inventory check in which an auditor compares the lender's schedule of financed VINs against what is actually on the dealership's premises, then verifies that anything sold has been paid off. Depending on who you ask it is also called a floor check, a lot audit, a flooring audit, a lender audit or a collateral audit. They are all the same event.

Who performs it

Either the lender's own field representative or a third-party inventory audit firm the lender retains. The auditor typically arrives unannounced during business hours, checks in with the controller or office manager, and expects to walk the lot the same day. For most dealerships this happens about once a month; new accounts, stores with recent exceptions and large or fast-turning lines are often audited more frequently. Lenders also reserve the right to audit at any time.

The auditor's job is narrow. They are not evaluating the business. They are confirming collateral: is this VIN here, and if it is not, where is it and has the lender been paid?

What the auditor checks

The audit itself is mechanical. The auditor carries a list of every VIN on the floor plan as of that morning and works through it, usually with a handheld scanner or a phone app, physically locating each unit and recording the time and place it was seen.

VINs on the lot vs. the lender's schedule

Each unit on the schedule has to be physically verified: front line, back lot, showroom, service drive, detail bay, body shop, loaner fleet, demos, offsite storage. Auditors generally verify the VIN plate itself rather than a stock-number tag or a window sticker, because tags move and stickers can be reprinted. Units at offsite locations the auditor cannot reach that day are usually recorded as pending and have to be verified later, by a second visit, a photo with proof of date, or a third-party confirmation.

Sold-not-paid

Any scheduled unit that is not on the lot is checked against the DMS. If it has been sold, the auditor wants to know the sale date, the funding date and whether the lender has been paid. Every floor plan agreement sets a window, commonly a small number of business days from delivery or funding, inside which the dealer must pay the unit off. A unit sold inside that window is normal business. A unit sold outside it is the single most serious exception an audit can surface, because it looks like the dealership has taken the lender's collateral and the proceeds at the same time.

Titles and MSOs

Many lenders hold titles and manufacturer's statements of origin directly. Where the dealer holds them, the auditor may sample units and ask to see the document, or confirm which titles are at the lender, which are in the dealership's safe and which are still in transit from an auction. A unit whose title cannot be located is treated as an exception even when the car is sitting on the front line.

Curtailments and aging

The auditor also notes units approaching or past a curtailment date, that is, a scheduled partial paydown required once a vehicle has been on the floor plan for a set period. Aged units are not an exception in themselves, but a pattern of missed curtailments is a credit signal the lender watches closely.

The exception report

At the end of the walk the auditor reviews exceptions with the controller: units not found, units sold and not paid, documents not produced. Whatever cannot be cleared on the spot goes to the lender the same day. From that point, the clock belongs to the lender.

What happens when a vehicle can't be found

Most "missing" units are not missing. They are in the body shop, out on a demo, parked behind the service building or sitting at a sister store nobody told the office about. The problem is that the auditor cannot clear a unit on a story; they need to see it or see proof. Anything unresolved when the auditor leaves becomes an exception on the lender's desk.

The payoff window

When a scheduled unit cannot be located and there is no satisfactory explanation, lenders commonly treat it as sold out of trust and demand payment. In our experience and in the agreements we have operated under, the store is typically given a window of roughly two business days to produce the vehicle or pay it off in full. The exact term varies by lender and agreement, but it is measured in days, not billing cycles.

Out-of-trust consequences

A unit that is paid off inside the window is usually closed as an exception with a note on the account. A unit that is not escalates quickly, and the remedies in a standard floor plan agreement are severe:

• Immediate payoff demands on the missing unit, and often on any other sold-not-paid units found in the same audit.
• Tighter terms: accelerated curtailments, a reduced advance rate, a higher reserve or a cash-collateral requirement, and more frequent (sometimes weekly) audits.
• Suspension or freeze of the line, which stops the store from flooring new inventory and can halt the business within days.
• Default and acceleration of the entire balance, personal guarantees being called, and the lender taking possession of inventory under its security interest.
• Litigation and, in egregious cases, criminal referral. Selling collateral and withholding proceeds can be prosecuted as conversion or fraud depending on the state and the facts.

A public example

In a 2026 lawsuit, Toyota Motor Credit reportedly claimed more than $5.1 million from a Connecticut dealer group over vehicles financed on the floor plan that it alleged were sold out of trust. The figure is the lender's reported claim rather than a verdict, and the facts of that case are the parties' to argue. It is worth citing because it shows the scale: out-of-trust exposure is counted in millions and in the survival of the dealership, not in paperwork.

How dealers prepare: the checklist

Dealerships that pass audits without drama do not prepare for the audit. They run the lot so that the audit confirms what they already know. The checklist below is what that looks like in practice.

1. 1
   Reconcile the lender's schedule against the lot every day, not every month.

   Pull the current floor plan schedule and confirm every financed VIN is physically accounted for: on the lot, in service, in the body shop, on demo or at an offsite location you can name. The monthly audit should confirm what you already know.
2. 2
   Keep a current list of every unit that is not on the main lot.

   Service, detail, body shop, loaner fleet, demos, offsite storage, in transit, at auction. Auditors accept a unit they can verify; they flag a unit nobody can place.
3. 3
   Pay off sold units inside the window, every time.

   Know your agreement's payoff deadline (commonly measured in business days from the sale or funding date) and give the office a daily sold-not-paid report. Sold-not-paid is the exception most likely to be read as out of trust.
4. 4
   Match titles and MSOs to the schedule.

   The auditor may ask to see the title or MSO for a sample of units, or confirm the lender holds it. Know which titles are in your safe, which are at the lender and which are in transit from an auction.
5. 5
   Track curtailment dates and aged units.

   Aged inventory triggers curtailments. Have a view of every unit's days on floor plan and the next curtailment date so a scheduled paydown never arrives as a surprise.
6. 6
   Have deal jackets ready for recently sold units.

   For anything sold in the last 30 days, be able to produce the buyer's order, funding confirmation and payoff confirmation quickly. The faster an exception is cleared, the less it escalates.
7. 7
   Name one person who owns the audit walk.

   A controller or inventory manager who walks with the auditor, has the offsite list and can clear exceptions on the spot. Audits go badly when the auditor is handed to whoever is free.
8. 8
   Keep your own evidence.

   A dated, time-stamped record of each unit's last physical sighting, with photos, resolves disputes about where a car was on a given day. It also means the audit is a formality, not an investigation.

None of this is complicated. The failure mode is that each step depends on someone remembering to do it on a busy day, and a floor plan audit is unforgiving of the one day someone forgot.

Lender-specific notes

The mechanics above are common to every floor plan. The details, including audit cadence, payoff windows, curtailment schedules and how exceptions are communicated, are set by each lender's agreement, and the agreement you signed always controls. The notes below are general and factual; confirm specifics with your lender representative.

Independent and used-vehicle floor plan providers

Providers that focus on independent dealers and auction-sourced inventory (NextGear Capital and AFC are the two largest) typically run frequent, unannounced lot audits through their own field staff or contracted audit firms, with cadence tied to the dealer's account history and line size. Their agreements set short payoff windows after a retail sale and define curtailment schedules by days on the line, and they generally offer dealer portals where the current schedule, curtailment dates and payoff amounts can be checked daily. Use them: the schedule in the portal is the list the auditor will walk with.

Captive lenders

Manufacturer-affiliated captives (the finance arms of the brands a franchised store sells) floor new inventory and often used as well. Captive audits tend to be scheduled on a regular cycle and may be combined with other dealer reviews. Because the captive also controls new-vehicle allocation and incentives, an out-of-trust finding at a captive can affect the franchise relationship beyond the credit line itself.

Banks and commercial lenders

Regional banks and commercial finance companies that floor franchised dealers usually audit monthly or quarterly through third-party audit firms, and may additionally require periodic self-reported inventory certifications from the controller. These lenders tend to place more weight on the dealership's financial statements, which is why a clean audit history matters at renewal time.

Frequently asked questions