The $4 Billion Blind Spot: Why Franchise Dealers Are Hemorrhaging Capital on Aged Inventory

Nearly 1 in 3 franchise vehicles has been sitting for 90+ days

There is a number that should keep every franchise dealer principal awake at night, and it is not gross profit per unit, and it is not CSI scores. It is this: 30.4% of all franchise new and pre-owned inventory in the United States has been sitting on dealer lots for more than 90 days.

That is not an estimate. We analyzed 302,152 active vehicle listings across 1,674 franchise dealerships, capturing invoice amounts, days listed, OEM make, and the floorplan lender terms associated with each unit. The result is a national dataset that tells a story the industry's existing tools are structurally unable to tell.

These are not auction castoffs or orphaned trades. These are franchise-floored units—new Fords, Chevrolets, Hyundais, GMCs, Mercedes-Benzes—sitting on concrete, drawing interest every single day, and showing up in no tool, no DMS report, and no OEM dashboard as what they actually are: a capital hemorrhage.

The total invoice value of those 91,897 aged units is $4.32 billion. That capital is frozen. It is not funding parts inventory. It is not covering payroll. It is not paying down real estate debt. It is sitting in the form of sheet metal on a lot, generating daily interest charges that compound into one of the largest invisible line items in the franchise dealer business model.

The math nobody shows you

Every dealer knows their floorplan interest line. It shows up on the financial statement. What no tool on the market shows them is the per-vehicle, per-day carrying cost broken down by their actual lender terms—and what that cost means in the context of their total capital position.

The formula is straightforward. Take the invoice amount of a vehicle, multiply it by the floorplan APR, divide by 365. That is the daily interest charge on that single unit. It does not appear on any screen in the dealership. It is real, it is accruing right now, and it compounds every day the vehicle sits.

Ten dollars and thirty-two cents per day does not sound like much. But multiply it across a hundred aged units and you are burning more than $1,000 per day in interest alone—before depreciation, before reconditioning reserves, before the opportunity cost of that frozen capital.

Here is what the carrying cost trajectory looks like for a single $50,000 vehicle at the industry blended rate of 8.1% APR, assuming an invoice-to-MSRP ratio of 93%:

The rightmost column is the one that should alarm you. It represents the interest charges as a percentage of a typical $2,500 front-end gross profit on that vehicle—a realistic blended figure per the 2024 NADA Annual Financial Profile and Haig Report data ($1,700–$3,300 depending on segment). At 120 days, floorplan interest alone has consumed half your expected gross. At 365 days, the interest has exceeded your front-end gross by 50%. The vehicle has not moved, but your margin is gone—and then some.

And this table only captures interest. It does not capture depreciation—which on a new vehicle averages 1.5 to 2.5% per month for the first six months—or the cost of the capital itself being unavailable for higher-return uses.

The lender variable: curtailment gates create hidden cliffs

Carrying cost is not uniform across the industry. It varies dramatically based on one factor most dealers do not think about until they receive the bill: their floorplan lender's curtailment schedule.

A curtailment gate is the point at which a lender begins requiring the dealer to pay down a percentage of the floored amount on an unsold vehicle. Some lenders start curtailing at 60 days. Others wait until 180. The gate date, the curtailment percentage, and the floorplan APR combine to create a cost structure that is unique to every dealer—and that no DMS or inventory management tool factors into its aging reports.

Lender	APR	Curtailment Gate	Daily Cost / $50K Vehicle	90-Day Interest
Hyundai Capital	6.8%	60 days	$8.67	$780.00
Ford Credit	6.3%	365 days	$8.03	$722.47
Toyota Finance	5.8%	120 days	$7.39	$665.34
GM Financial	7.1%	180 days	$9.05	$814.52
Ally Financial	8.1%	180 days	$10.32	$928.65

The difference between being floored with Toyota Finance at 5.8% and Ally at 8.1% is $2.93 per vehicle per day. That gap seems trivial on a single unit. Across 200 aged units over 180 days, that is $105,480 in additional interest.

More critically, look at the curtailment gates. A Hyundai dealer hits their curtailment cliff at 60 days. A GM dealer does not hit theirs until 180 days. This means a Hyundai dealer carrying the same unit for the same number of days faces a fundamentally different capital pressure than a GM dealer—yet both are reported identically in every existing inventory management tool. "Days on lot: 90" means radically different things depending on who is lending the money.

When curtailment begins, the dealer must pay down a portion of the floored amount—typically 10 to 25% of the original invoice. This is not a fee. It is a forced principal payment that reduces the dealer's available credit line while the vehicle remains unsold. It is a double hit: you continue to pay the interest and you lose access to the capital.

The national picture: $4.3 billion frozen, $350 million per year in interest

Scaling the per-vehicle math to the national dataset produces numbers that are difficult to look away from.

Notice that the average price of aged vehicles ($50,665) is essentially identical to the overall average ($50,528). This demolishes a common assumption in the industry: that aged inventory is "the cheap stuff nobody wants." It is not. The data shows that aging is not concentrated in low-demand, low-price segments. It is evenly distributed across the price spectrum. Expensive trucks, luxury sedans, and mainstream SUVs age at roughly the same rate.

The implications are significant. When a $61,000 GMC Sierra sits for 174 days, it is not just tying up more capital than a $32,000 Nissan Sentra sitting for the same duration—it is also generating proportionally higher daily interest charges. The carrying cost problem is not a volume problem. It is a capital-weighted problem, and the biggest units create the biggest drag.

Age distribution: where the inventory actually sits

Two features of this distribution demand attention. First, the 121–180 day bucket (36,409 units) is larger than the 91–120 day bucket (30,124 units). This means that once a vehicle passes the 90-day mark, it is more likely to age further into the 121–180 day range than to sell in the following 30 days. The data suggests that 90 days is not a warning threshold—it is a tipping point. Vehicles that have not sold by day 90 tend to stay longer, not shorter.

Second, the 181–365 day bucket still contains 22,043 vehicles with a combined invoice value exceeding $1 billion. These are units that have been on dealer lots for six months to a full year, quietly accumulating interest charges that in many cases have already exceeded the remaining front-end margin entirely.

Where the damage concentrates

Aged inventory is not distributed evenly across makes. Certain OEMs are dramatically overrepresented in the 90+ day bucket, driven by production volume, allocation practices, market demand shifts, and the specific characteristics of their captive lender terms.

Make	Units 90+	Avg Days	Avg Price	Captive Lender	Gate	$/Day per Unit*
Cadillac	2,852	216	$74,835	GM Financial	180d	$13.39
Mercedes-Benz	3,566	169	$81,055	MBFS	120d	$11.98
GMC	4,377	174	$61,514	GM Financial	180d	$11.01
Chevrolet	11,918	186	$54,122	GM Financial	180d	$9.69
Ford	12,608	167	$52,704	Ford Credit	365d	$8.46
Jeep	3,801	144	$45,725	Chrysler Cap	180d	$7.92
Hyundai	11,056	163	$38,198	Hyundai Cap	60d	$6.62
Kia	7,341	161	$37,259	Kia Finance	60d	$6.45
Nissan	5,805	196	$32,369	NMAC	365d	$5.39

*Daily floorplan interest per vehicle, using each make's OEM captive lender APR and invoice ratio. Sorted by cost per unit, highest first.

Sorted per unit, the picture inverts. Cadillac is the most expensive vehicle to carry at $13.39/day—but its 180-day gate gives dealers six months before curtailment. Hyundai and Kia cost the least per unit at $6.45–$6.62/day, yet their 60-day gates mean those vehicles hit curtailment while most other makes are still in their grace period. A Hyundai dealer with 163-day average age has been past their gate for over three months. A Cadillac dealer at 216 days is only 36 days past theirs.

This is where aggregate totals mislead. Ford and Chevrolet dominate the unit count—24,526 aged units combined, more than a quarter of all 90+ day inventory nationally. But the per-unit economics at Hyundai and Kia are structurally worse because the gate arrives so early. A $38,198 Hyundai at day 163 has accumulated $1,079 in interest plus 103 days of post-gate curtailment fees. A $54,122 Chevrolet at day 186 has accumulated $1,802 in interest but only 6 days past its 180-day gate.

Nissan tells yet another story: the lowest per-unit cost at $5.39/day but the highest average age at 196 days. These are sub-$33K vehicles that have been sitting for over six months. The interest is modest but the depreciation is devastating. At that age and price point, the vehicle may have lost more in value than it costs to floor it.

Why existing tools miss it

The franchise dealer tech stack is not short on tools. vAuto, Dealertrack DMS, CDK Global, Reynolds and Reynolds—these platforms collectively serve the vast majority of franchise dealerships in the United States. Every single one of them will show a dealer their "days on lot" metric.

Here is what none of them show:

• The dollar amount of daily interest being generated by each vehicle, calculated against the dealer's actual floorplan lender terms—not an industry average, but the specific APR and curtailment schedule of the dealer's captive or independent floorplan provider.
• The curtailment gate proximity—how many days remain before curtailment payments begin on each unit, and what those payments will cost in terms of reduced credit line availability.
• The aggregate carrying cost across the entire aged inventory pool, expressed as a daily, monthly, and annual bleed rate that can be compared against other financial line items like payroll, rent, or advertising spend.
• The opportunity cost of frozen capital, quantifying what that same money could produce if redeployed into parts inventory (25–40% annual ROI), fixed operations working capital, or acquisition financing.

The reason these tools do not show this information is structural, not technical. DMS platforms are transaction-processing systems. They are built to record deals, manage accounting, and file regulatory paperwork. Inventory management tools like vAuto are merchandising and pricing platforms—they are optimized to help dealers price vehicles competitively and identify acquisition opportunities. Neither category was designed to function as a capital intelligence layer.

"Days on lot: 90" in vAuto tells a dealer that a vehicle has been sitting for three months. It does not tell them that this specific vehicle, floored by Hyundai Capital at 6.8% APR, has already passed its 60-day curtailment gate, has generated $780 in interest, has triggered a forced principal payment reducing their available credit line, and is now costing them both the daily interest carry and reduced borrowing capacity. Those are two fundamentally different kinds of information, and only the second one drives the right decision.

The gap is not that dealers lack data. They are drowning in data. The gap is that no tool translates the data they have—vehicle age, invoice amount, lender terms—into the single number that matters: what is this unit costing me today, and what would I gain by freeing that capital?

The compounding problem: three dimensions of damage

The carrying cost of aged inventory is corrosive in a way that does not appear in any single monthly financial statement. It compounds across three dimensions simultaneously, and no existing report captures all three.

Dimension one: interest

This is the visible one, though even it is underappreciated. Across the 91,897 vehicles in our dataset that have aged past 90 days, the daily interest charge totals $959,012. That is $350 million per year in pure interest expense being paid by franchise dealers on inventory that is not moving. This is capital transferred from dealer balance sheets to floorplan lenders for the privilege of holding vehicles that are, by definition, failing to sell at their current price and market position.

Dimension two: depreciation

While interest is accruing, the vehicle is simultaneously losing value. New vehicle depreciation accelerates after the model year turns over. A 2025 model sitting on a franchise lot in February 2026 has already crossed into the "prior model year" penalty zone, where residual values drop materially and consumer willingness to pay full sticker evaporates. For a $50,000 vehicle depreciating at 1.5% per month, that is an additional $750 per month in value erosion on top of the interest charges—bringing the total monthly carrying cost on a single unit closer to $1,060. Over six months, that is $6,360 in combined carrying damage on a vehicle with perhaps $2,500 in front-end gross remaining—meaning the deal is underwater before the customer ever sits down.

Dimension three: opportunity cost

This is the dimension no tool captures and no financial statement itemizes. Every dollar locked in an aged vehicle is a dollar that cannot be deployed elsewhere in the business. Franchise dealers operate complex enterprises with multiple competing capital needs:

• Parts inventory typically generates 25–40% annual return on investment, making it one of the highest-ROI capital deployments available to a dealer. Every $100,000 frozen in aged vehicles is $100,000 not available for parts stocking.
• Fixed operations working capital funds technician capacity, equipment purchases, and service bay throughput. Service absorption ratios—the percentage of fixed overhead covered by service and parts gross—depend directly on available working capital.
• Acquisition capital—the ability to buy trades aggressively, acquire pre-owned inventory at auction, or make opportunistic purchases when a competitor closes—requires liquid capital that aged inventory has consumed.

A dealer sitting on $4 million in aged inventory (roughly 80 units at the national average price) is not just paying approximately $1,100 per day in interest. They are simultaneously forgoing the returns that $4 million would generate if redeployed into parts ($1–1.6 million in annual return), service operations, or strategic acquisitions. The true cost of aged inventory is not the interest. It is the interest plus the return on the capital you can no longer deploy.

This is the negative carry spread: the gap between what frozen capital costs you (floorplan interest at 6–8%) and what it could earn you (parts ROI at 25–40%, service operations at 15–20%). That spread runs 17 to 34 percentage points. On $4.32 billion in frozen aged capital nationally, even the conservative end of that spread represents an enormous sum in unrealized annual returns across the franchise dealer industry.

What dealers can actually do

The data makes the problem clear. The question is what to do about it. Based on our analysis of the dealers in this dataset with the lowest aged inventory ratios, several patterns emerge consistently.

1. Know your real carrying cost—not your DMS interest line

The first step is visibility. Dealers need to see every vehicle's daily carrying cost calculated against their actual lender terms—not an industry average, not a blended guess, but the specific APR and curtailment schedule for each floored unit. This turns "days on lot" from a vague metric into a dollar-per-day cost that can be compared against the vehicle's remaining margin. A unit with $800 in accumulated interest and $2,000 in remaining gross is a fundamentally different decision than a unit with $800 in accumulated interest and $400 in remaining gross. The math changes the action.

2. Treat 60 days as the action threshold, not 90

The distribution data tells us that vehicles crossing the 90-day mark are more likely to age further than to sell quickly. The 121–180 day bucket being larger than the 91–120 day bucket is the proof. Dealers with the healthiest turn rates in our dataset are making pricing, merchandising, and disposition decisions at 60 days—well before the carrying cost curve steepens and well before most captive lender curtailment gates activate. By the time a vehicle hits 90 days, the cost of inaction has already compounded materially. The time to act is before the cliff, not after it.

3. Evaluate swap opportunities by carrying cost, not just days on lot

Dealer-to-dealer swaps are underused in franchise retail, largely because the existing process is manual, opaque, and evaluated on the wrong metric. Two dealers each holding a vehicle the other's market wants is a situation where both parties benefit—but only if the swap decision is informed by the carrying cost each dealer is currently incurring. A dealer paying $10.32 per day on an aged Silverado and a dealer paying $8.67 per day on an aged Tucson are both losing money every day those vehicles sit. The swap eliminates the carrying cost for both parties simultaneously. The economic case is clear when you can see it. The problem is that today, nobody can.

4. Benchmark against peers, not just against yourself

Most dealers measure their aged inventory performance against their own historical baseline. This is useful but insufficient. A dealer whose aged ratio improved from 35% to 30% may feel good about the trend while remaining well above the top-quartile benchmark of the market. Peer benchmarking—anonymous, aggregated, and segmented by metro area, OEM mix, and dealer size—provides the external reference frame that internal data alone cannot. You cannot manage to a standard you cannot see.

5. Quantify the redeployment case for every hold decision

Every capital allocation decision at the dealership level should be informed by the carrying cost of the alternative. Before a general manager approves holding a 120-day unit for another 30 days, they should see the explicit comparison: the expected return of holding (potential price recovery, seasonal demand uptick) weighed against the carrying cost of holding (interest, depreciation, opportunity cost) and the return on redeploying that capital into parts inventory, fixed ops capacity, or a fresh acquisition. This comparison does not exist in any tool on the market today. It should.

The bottom line

The franchise dealer industry is carrying $4.32 billion in aged inventory that generates nearly $1 million per day in interest charges. That capital is frozen, its full cost is invisible in every existing tool, and the compounding damage—interest plus depreciation plus opportunity cost—runs into the billions annually when measured against what that capital could produce if freed and redeployed.

This is not a market cycle problem. It is not a demand problem. It is a visibility problem. Dealers are making inventory disposition decisions with tools that show them one number—days on lot—when the decision actually requires three: the carrying cost of the unit, the remaining margin on the unit, and the return available if that capital were deployed elsewhere. Until those three numbers are visible on every unit, on every lot, every morning, the industry will continue hemorrhaging capital it cannot see and cannot measure.

The data is clear. The math is straightforward. The blind spot is $4 billion wide, and it is costing the industry every single day it goes unaddressed.