Financing and F&I

What is curtailment?

A curtailment is a scheduled principal payment your floorplan lender requires on a vehicle that has not sold by a set age.

It is the lender reducing exposure on aging inventory. The schedule is in your agreement, commonly starting somewhere around 60 to 90 days and repeating.

Curtailments turn stale inventory into an immediate cash call, which is why aged units hurt cash flow before they ever hurt the P&L.

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Related terms

Floor plan

A floor plan is a revolving credit line used to buy inventory, secured by the vehicles themselves, repaid as each car sells.

Days on lot

Days on lot counts how long a vehicle has been in your inventory, and it is the single best predictor of what it will finally sell for.

General information for US dealers, not legal advice. Rules change and vary by state, so confirm specifics with your state agency or counsel.