Funded Stock Visibility for Vehicle Finance Lenders
Timi
A 20-car dealer forecourt can represent £300,000 to £600,000 of funded stock. The vehicles themselves are the security. But between physical audits, a funder is partly blind.
That gap is where the problems happen.
How stocking finance works
Stocking finance, sometimes called floorplan or unit stocking finance, is a revolving credit facility that funds a dealer’s forecourt. The lender pays the stock cost. The dealer holds the vehicle and repays when it sells, usually within 30 to 90 days. The vehicles are the security.
Advance rates are often around 80 percent of cost. Curtailments, where partial repayments on aged stock are required, commonly kick in at 60, 90 or 120 days depending on the facility terms.
The model works well when audits and reporting align with what is actually on the forecourt. The risk is in the gap between inspections.
What can go wrong between audits
Four risks dominate:
Sold out of trust. A dealer sells a vehicle and does not immediately settle with the funder. The vehicle is gone. The lender still holds it as security.
Site movement. Stock moves off approved sites without notification. The lender’s visibility of where the security is located disappears with it.
Double-funding. A vehicle is funded by more than one lender using the same unit as security. Physical audits catch this, but only on the day of the visit.
Aged stock. Units quietly pass curtailment trigger points without anyone flagging them. The dealer avoids the conversation, and the lender misses the early warning.
Specialist audit firms, such as Auxiga, which has been providing hybrid physical and digital audits since 1991, exist precisely because these risks are real and material. Physical inspections on their own are periodic by nature.
How digital tracking fills the gap
Vehicle-level digital tracking gives funders visibility of funded units between physical inspections.
At its most basic, it confirms that a unit is still where it should be. That alone is a meaningful change from the alternative, which is no information at all between audit dates.
More specifically, it can:
- Confirm presence on approved sites without a field visit
- Alert when a unit moves off an approved location
- Surface vehicles that have been stationary for an unusually long period, a potential signal of aged stock
- Provide a timestamped record of location history that supports audit reporting
This is a complement to physical audits, not a replacement for them. An auditor confirms vehicle condition, plate matching and documentation. Digital tracking covers the continuous monitoring that sits between those visits.
No hardware installation is required to activate tracking. That matters for a dealer’s stock, which turns over regularly and where fitting and removing hardware on every incoming unit would create cost and friction.
What this means for audit cost and risk
Continuous visibility between inspections changes the audit equation in two ways.
First, it reduces the audit cost for routine confirmation of stock presence. Visits that are purely checking whether a vehicle is still on site become less necessary when that data is available continuously.
Second, it catches problems earlier. A unit that moves off an approved site, or that crosses a curtailment age threshold without settlement, surfaces immediately rather than at the next scheduled inspection.
For wholesale risk directors and heads of dealer audit, that shift, from periodic to continuous, is the proposition worth examining.
What to ask any tracking provider
Before committing, confirm:
- Is visibility at VIN level, not just site level?
- What is the audit trail, and how is it exported for compliance reporting?
- Is GDPR compliance confirmed and documented?
- How does the provider handle a vehicle that has been sold and is no longer funded?
Traknova’s lender product is built specifically for funded stock visibility between physical audits. No hardware install, VIN-level tracking, and an audit trail that supports existing reporting workflows.