This excerpt taken from the AN 10-K filed Feb 17, 2010.
3. INVENTORY AND VEHICLE FLOORPLAN PAYABLE
The components of inventory at December 31 are as follows:
The components of vehicle floorplan payables at December 31 are as follows:
Vehicle floorplan payable-trade reflects amounts borrowed to finance the purchase of specific new vehicle inventories with the corresponding manufacturers captive finance subsidiaries (trade lenders). Vehicle floorplan payable-non-trade represents amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventories with non-trade lenders. Changes in vehicle floorplan payable-trade are reported as operating cash flows and changes in vehicle floorplan payable-non-trade are reported as financing cash flows in the accompanying Consolidated Statements of Cash Flows.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On April 30, 2009, GMAC Financial Services (GMAC) entered into an agreement with Chrysler LLC to provide automotive financing products and services to Chrysler dealers and their customers. As a result of this agreement, we have treated new Chrysler vehicles financed by GMAC after April 30, 2009, as vehicle floorplan payable-non-trade.
Floorplan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within several business days after the related vehicles are sold. Our manufacturer agreements generally require that the manufacturer have the ability to draft against the new floorplan facilities so the lender directly funds the manufacturer for the purchase of new vehicle inventory. Floorplan facilities are primarily collateralized by vehicle inventories and related receivables.
Our vehicle floorplan facilities, which utilize LIBOR-based interest rates, averaged 2.6% during 2009 and 4.0% during 2008. At December 31, 2009, the aggregate capacity under our floorplan credit agreements with various lenders to finance a portion of our used vehicle inventory was $170.0 million, of which $80.8 million had been borrowed. At December 31, 2009, the aggregate capacity under all of our floorplan credit facilities to finance vehicles was approximately $2.3 billion, of which $1.4 billion had been borrowed.