Annual report pursuant to Section 13 and 15(d)

Inventories and Related Notes Payable - Floor Plan

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Inventories and Related Notes Payable - Floor Plan
 12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Inventories and Related Notes Payable - Floor Plan Inventories and Related Notes Payable - Floor Plan
Inventories consist of the following:
  December 31, 2019 December 31, 2018
  (In thousands)
New vehicles $ 983,123    $ 1,027,727   
Used vehicles 319,791    293,179   
Service loaners 152,278    141,542   
Parts, accessories and other 62,683    66,013   
Net inventories $ 1,517,875    $ 1,528,461   
We finance all of our new and certain of our used vehicle inventory through standardized floor plan facilities with either a syndicate of financial institutions and manufacturer-affiliated finance companies or directly with individual manufacturer-affiliated finance companies and other lending institutions. The new and used vehicle floor plan facilities bear interest at variable rates based on either LIBOR or prime rates, depending on the lender arrangement. The weighted average interest rate for our new vehicle floor plan facilities was 3.03%, 3.10% and 2.37% for 2019, 2018 and 2017, respectively. Our floor plan interest expense related to the new vehicle floor plan arrangements is partially offset by amounts received from manufacturers in the form of floor plan assistance capitalized in inventory and charged against cost of sales when the associated inventory is sold. For 2019, 2018 and 2017, we recognized a reduction in cost of sales of approximately $41.5 million, $42.2 million and $45.3 million, respectively, related to manufacturer floor plan assistance.
The weighted average interest rate for our used vehicle floor plan facilities was 3.10%, 2.98% and 2.61% for 2019, 2018 and 2017, respectively.
The new and used vehicle floor plan facilities are collateralized by vehicle inventory and other assets, excluding goodwill and other intangible assets, of the relevant dealership subsidiary. The new and used vehicle floor plan facilities contain a number of covenants, including, among others, covenants restricting us with respect to the creation of liens and changes in ownership, officers and key management personnel. We were in compliance with all of these restrictive covenants as of December 31, 2019.