Most dealers meet curtailment the same way: a payment lands that nobody planned for, on a unit nobody realized had gotten that old. The money is real, it comes out of pocket whether the truck has sold or not, and by the time it hits, the window to avoid it has already closed.
Curtailment is not a penalty or a surprise fee. It is a scheduled part of every floor plan, written into the agreement on day one. Understanding it turns it from an ambush into a number you can see coming.
What a curtailment actually is
When you floor a truck, the lender advances the full amount and holds the unit as collateral. For a while you pay interest only. But a truck that sits is a depreciating asset the lender is holding a security interest in, and lenders do not want to carry that risk indefinitely.
So the agreement requires a curtailment: a scheduled payment that reduces the principal on a unit that has not sold within a set timeframe. It is the lender forcing you to eat some of the depreciation on an aging truck, in cash, on a date fixed when you floored the unit.
Schedules vary, and they vary more than most dealers expect: different percentages of the original loan, different intervals, different starting points, and commercial units often carried on different terms than retail units on the same lot. The exact numbers are in your agreement, and they are worth reading before you need them rather than after. What does not vary is the shape. Curtailments are per unit, they are dated from the day you floored that unit, and they arrive whether the truck moved or not.
Why it costs you twice
An aging truck is not just taking up lot space. It is costing you on two lines at once.
The interest has been accruing the entire time the unit sat. Then, once it crosses its curtailment date, you owe a principal payment on top of that interest, out of pocket, on a truck that is still not sold. The longer it sits, the more both lines add up, and the curtailment is the one that stings, because it is a lump sum on a specific day rather than a slow bleed.
This is why turnover is one of the most important numbers in a floor-planned store. A truck that sells before its curtailment date costs you only interest. A truck that crosses the line costs you interest plus principal, and keeps costing you at every interval after.
The trap: units that curtail on the same day
Here is the mistake that turns a manageable schedule into a cash crunch. Curtailments are dated from when you floored the unit, at the same intervals every time. So if you floor fifteen trucks on the same day, those fifteen curtailments come due on the same day too.
A commercial lot makes this worse than a car lot does. Factory orders and fleet purchases arrive in batches, so a whole group of units can share a floor date and therefore share a curtailment date. If nobody is watching, the first sign is a stack of principal payments landing together on a day the cash was not set aside for.
How to see it coming
Curtailment is only an ambush if you cannot see the dates. The fix is not financial engineering. It is visibility.
You need to know, for every unit on the lot, how many days it has been financed and how close it is to its next curtailment, counted from the date the lender actually started billing, which is the factory invoice date, not the day it landed on your lot. A truck can be financed for weeks before it is physically on the ground, and that time is on the meter.
With that in view, curtailment stops being a surprise. You can move the units closest to their date first, discount them deliberately rather than in a panic, or at least set the cash aside so the payment is planned instead of scrambled for. The dealers who get ambushed are the ones running the lot on a spreadsheet nobody updates. The dealers who do not are the ones who can see, at a glance, which trucks are about to cost them.
The pattern
A curtailment is not a surprise. It is a dated, per-unit payment written into your floor plan on day one. It only feels like an ambush when you cannot see the dates coming. See them, and it becomes a decision: sell the truck, discount it, or reserve for the payment, on your schedule instead of the lender's.
ProInventory360 shows flooring days left on every floored unit, counted from that truck's own factory invoice date and termed by its order type, so no unit ages toward its curtailment out of sight. See what it tracks.