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Old 10-10-2008, 10:44 AM   #1
XDCX
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Default Capital One drops Floorplan Dealers in NY and NJ

Capital One has just advised its dealers in New York and New Jersey that it will drop their flooring accounts at the end of the month. How's that for support.

The news report indicates that the change will only affect about 20 dealers and that Capital One will continue to offer flooring accounts for dealers in other states.

Here's a link to the news report: http://www.bloomberg.com/apps/news?p...X14&refer=home

You can bet there are 20 dealers that are sweating that now is not a good time to be looking for a new floorplan provider.
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Old 10-10-2008, 11:57 AM   #2
XDCX
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Default Why would they drop just the States of NY and NJ?

It seems strange that Capital One would go through all of the effort and bad press just to pull 20 flooring accounts.

There must be a reason why they are dropping NY and NJ and yet keeping their other flooring accounts open.

I'm wondering if NY and NJ have any laws on the books that make floorplan lenders more vulnerable when a dealership goes out of business. I know that NY had a "vicarious liability" provision to their leases that resulted in most lenders pulling out of that market.

Regardless, I hope the 20 dealers that are affected by this action have good relations with other lenders and can make an easy transition.
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Old 10-10-2008, 12:05 PM   #3
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Default The Dealers have known about this since August

I just read a story from Reuters that indicated that the 20 dealers affected by this action have know about Capital One's decision since August.

That makes more sense. A bank couldn't expect a dealer to find a new flooring source in 20 days.

I still wonder why this only affects NY and NJ. It will be interesting to see if any other lenders follow Capital One and pull out of NY and NJ?
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