In our last video, we discussed what a Security Interest is. Now let’s talk about what it means for you.
When you give a Security Interest to your Floor Plan provider, it likely extends beyond the cars on your lot. Depending on your arrangement, the Floor Plan provider may have the right to seize other cars and property (like computers, furniture, and equipment).
Watch this short video for more information.
Below is a transcript of the video:
Another reason why it’s really important to read the terms of the contract of a floor plan financing agreement is that it may include a security interest in other things. For example, other vehicles. Meaning if there’s a default in the floor plan arrangement, the floor plan financing company can come in at three in the morning and take all the vehicles on the lot. It may also include an additional security arrangement for a property that’s owned by the dealer.
When I say property, I don’t mean physical property or real property, like concrete. They can’t take the land. It includes personal property security, meaning computers that are owned by the dealers, desks, anything that’s in the file cabinets, things that have even reasonable value become security for the floor plan arrangement. So not only can the floor plan company come after any individual vehicle, the vehicle that’s being floored or being secured, but they likely also will have a security interest in additional property owned by the dealer, including other vehicles on the lot and things like computers and other things that are on the dealer’s property.
That’s just something else to be aware of with a floor plan arrangement that will all be included in the floor plan agreement.
It’s very common, so it’s not something that should surprise anybody.
For more videos on the Georgia Car Law Authority series, please visit www.georgiacarlaw.com.
For more information and to book a strategy session, click here!
P.S. Have you heard about The Driveway, our monthly legal membership program? Check it out here!