NADA is a big group for car dealers to meet, share ideas, and talk about selling cars. They have big meetings where people who sell cars and companies that help them get together.
The Great Train Wreck is when buying a car gets messed up because the dealer doesn't have all the info they need, like your credit or income, so the deal can't go through and everyone gets upset.
FNI means the part of the car dealership that helps customers get loans and sell extra protections like warranties. It helps the dealership make money.
When you buy a car at a dealership, there are people who help you get a loan or payment plan so you can pay for the car over time.
LIVE
Look at this guy. Back to the show. Matt Lasher from Streamline Auto. Thanks so much
for joining me. Mr. Cirillo, it's an honor and a pleasure.
You know, I feel like you and I have more in common than the LinkedIn algorithm will
let us discover. Tell me more. Family men. I mean, that could be said
of a lot of people. This idea of not even having packed for NADA yet, but already wanting
to be home. Listen, family first, you know what I mean?
But it's great to see SUBI and all the people. NADA is kind of a second family, right? So
it's the transition that's hard. Can I ask you this? A sincere question.
Going from dealer focused, your dealer operations focused working at the dealer group. What
are you doing now on what we all call the vendor side? How does the lens shift when
you come to an NADA? It's fascinating. So many NADA's attended
with a dealer badge and a lot of respect for dealers and the overwhelming nature that
NADA is. I think the fascinating disconnect is we all get really excited about our solution
and the thing that we do as vendors and the problems that we solve and we care a lot about
those things. But a lot of times it's really disconnected from the dealer. Like the dealer
themselves doesn't even feel it or understand or care, right? And so I think that's the
riddle on the puzzle. But the industry is so great. It's such a relationship business.
People do business with people they know and trust. People buy cars from people they know
and trust. So the industry is no different. If you want to grow and have success as a
vendor or as a dealer partner or whatever, there's no shortcuts. You build relationships
slowly and intentionally over time. And I think that's the great thing about NADA and why we
all have so much fun getting together. It's speed dating. And it's speed dating that smells like
money. Oh my goodness. Okay. I got to talk to you about this because you are sitting on what I
believe is a tremendous amount of data with the work you're doing at Streamline. And I want to get
into the affordability crisis first, but let's talk about this thing that you call the great
train wreck. I need to know what you're seeing. What corner are you looking around right now and
what's your sentiment towards that? Yeah, look, I mean, affordability is a topic. You see it in
the headlines, $1,000 car payments, new cars continue to go up in price, interest rates are
high, affordability is a problem. It's becoming more and more well known. But in 2006, Greg Goble,
give him credit where credit's due, coined the phrase the great train wreck. And it's a problem
that still exists at every dealership, everywhere, every day, today. And it's getting worse. So the
great train wreck is when I spend five hours with Mr. Cerillo, right, Mike, let me show you all these
great cars that you could buy for your family. You need the third row seat, everything's great,
right? Okay, yeah, we test drive a bunch of cars, and you fall in love with the Cadillac Escalade.
Okay, great. Well, let's send this, let's write this deal up. Perfect. Well, we get it back into
finance and I forgot to run your credit. And I don't, I didn't ask you how much money you make
per month. And now all of a sudden, I don't have a deal that's financeable. So we've created
the great train wreck in that the customer's unhappy, the salesperson's unhappy, the sales
manager's unhappy, the finance manager's unhappy, the lender's upset, because nobody has the opportunity
to do any business, right? And so that's the great train wreck. And it happens, not because we want
it to, but because sometimes there's just a lack of information at the point that they need it.
And that then creates a ripple effect into the customer experience, or as I like to call it,
the guest experience, because they should be treated like guests. It is a hospitality business at
some level. Yep. But if you're creating all of, well, I say you're creating, if friction is created
at so many spots that kill the excitement of car shopping, because it can be exciting.
Can be. Then that's another avenue. Like it's almost like watching the train not just hit the
object and train wreck, but also watching the rear end of the train implode on itself as well.
So there's a good car phrase. It's called that car dealers use this phrase a lot. Yeah. It's
called time kills deals. Yeah. If you work at a dealership, you understand time kills deals.
Another sort of simpler way of saying the friction that we all are aware of
time kills deals and all sorts of ways. If I spent five hours with you at the dealership and
now you can't leave with that car, you're coming back to see me. Maybe not. I'm a little bit upset.
Yeah. But even speed and throughput of the transaction, efficiency at the dealership is a
big thing. And we're talking about it, you know, NADA AI, all the ways that we can be better,
faster, smarter, right? Right. Same thing throughput in the FNI office matters a great deal.
I don't want to spend two hours, you know, taking a turn and going through this and that and all
these things. So we got to juggle all of these complex things. Sometimes it's a financing issue.
Sometimes it's related to affordability, but it could just be, you know, the finance manager
wants to add extended service, an extended service contract to the deal, right? And they want to
extend the term from 72 months to 84 months. There's little practical things that we can do
to help the throughput at the dealership speed up and address affordability, address protection,
address the consumer experience. So there's a lot there. But yeah, I mean, it's an interesting
problem to be thinking about. And it has a lot of layers that are related to
the haves and the have nots, whether you have money, whether you don't, the different problems
that different lenders are solving within the ecosystem. But observationally, here's what I'm
learning, Mike, is really interesting. Lenders and dealers are like Mars and Venus. There's a
gigantic grand canyon in between and we use different language. And so I go to all these
lender things now with my dealer sort of lens on and I'm like, wow, they don't, they're like
skipping over the dealer, right? And you know, we're all about people, right? So in the power
of people and the value the dealers add in the process, the dealer playbook is my favorite
podcast in auto and you're the OG, my man. You've been doing this forever. Did you, did you just
your favorite podcast in auto? Yeah. Okay. You got to say it right into that camp. My favorite
podcast in auto. All right. I appreciate that. Okay. I'm sorry. I cut you off. All right. I
don't know what I was saying, but you're the best. It's people focused. It's people over
everything. That's my mantra. You know that I say it all the time. They're skipping over the
dealer. Well, people they don't know, don't appreciate the value that people are adding
an automotive, right? People don't understand the FNI role. Often dealership, general managers and
principals don't pay attention to FNI because it produces a lot of profit, right? But you've got
people like Adam Marburger and other people that are like training FNI, trying to grow these leaders
in the business. How do we do a more effective job? How do we sell warranties? How do we improve the
customer experience? How do we provide service to the clients that are buying cars, right? There's
so much opportunity for improvement. And I think that's the exciting thing about what we're up to.
Okay. So now you're talking about is being in the room where the conversation is happening,
is that part of the opportunity that you're seeing? I mean, there's an element here where you're
like, Hey, what I'm sensing is don't waste a good crisis. That's it. Like if it's a train wreck, let's
make it not a train wreck. Bro, I love that. You know, dealers are so resilient, right? 2008,
you know, you got cash for clunker or Lehman Brothers and then cash for clunkers thing. You
got COVID that came out smelling like roses out of the hat. The affordability crisis that's coming,
the tidal wave of people that are running out of cash, negative equity, high interest rates,
all these affordability constraints that exist. Okay. Dealers are resilient. We're going to
figure out this puzzle also, right? There's just no stopping the dealer. And I think that's the
value that the people in auto retail bring. And it's so easy to just like go direct to consumer
or test, you know, whatever. From your vantage point with Streamline, you know, you mentioned
you're in the room now with a lot of lenders in those conversations. I mean, what is the sentiment
and at what points, what types of things are coming up where you're like, man, I wish a dealer was
in the room. 100%. I mean, so a question like, how can a lender help a dealership? Lenders are
required for the liquidity and they got it. Somebody's got to buy these contracts and these
loans, right? So how can a lender be better? Well, a very simple answer is the lender can provide
dealer facing technology that helps them navigate their program. Now that's a biased answer.
Streamline helps do that. There's other providers that do things like that as well.
But that's an answer. But a really interesting subtle answer Rob Cochran gave an ADA chairman
yesterday or two days ago to AFSA talking about it's about the relationship. So do you care or
are you thinking about how do I grow the relationship with my dealer? Right. In this
increasingly digital world, right? Can we have practical productive conversations
that help dealers do more business? I feel like, okay, this is a working thought process. And I'm
not sure if I've fully figured it out yet, but I feel like you're the right guy to help me figure
this out. Our human nature, it's interesting. On the front side, it's like technology will
figure this out for us. On the backside of it, it's like no humans desire to have other humans
help figure the things out. So how do we reconcile that? Because I feel like, you know, you walk the
halls here, everybody's talking about how, you know, whatever the AI, and I know that sounds
somewhat cynical. I mean, we do, you know, everybody's leveraging the bias that we share
with the people bias that we share. That's a great way of saying it. So how do you reconcile
that to say, uh, technology leveraged human first, listen, so right. And so it's not taking
for granted the skills that you may not understand. So a really talented F and I manager, if you've
never sat in that seat, you may not understand the art of the selling and what they're doing in
that role. Right. So if you've never understood it, it is easy and or tempting to just jump over
that person. No different than dealers maybe are being jumped over as a lender thinks about, okay,
well, how do I capture the contract? Right. I want the loan. Right. Well, it's an indirect
automotive lending model. You're not going to change that model. Right. So you got to embrace
the model and be empathetic and appreciate the skills. Same thing on the lender side.
Do we appreciate as a dealer, the underwriter or the person that's very responsive to us
when I send in a tough application, but they text me right back. Right. And I appreciating that
person. Am I bringing a relationship to it? Do I know the name of that underwriter at bank XYZ?
Right. We can just be human about it. Right. And it's like very simple stuff of like, but now I
think we can leverage technology to grow those relationships in productive ways. So, you know,
I like Mike Cerillo is great. I love the dealer, but that's great. We have a relationship,
but if there's a way to enhance it and allow our businesses to grow together,
well, that's even better. Right. And that's where I think technology can play in some of these
benefits of AI and efficiency and all the things that we're talking about in this conference.
Yeah. That seems to be a theme that I've picked up on today, which is, you know,
four months ago, it was like, Hey, I was killing everybody's jobs. You got the CEO of Sales Force
saying we're looking at it. It's already replacing 53% or whatever the numbers are. Yeah.
Fast forward four months and we're like, no, it's going to speed up human connection if
we do this properly. If we do it right. Yeah. Words like empathy. We've used trust words like
empathy discernment. These are words that are all coming to my mind now when you're thinking about
a people first approach. Can we talk about empathy related to customers that have less money? Yes,
please. The world has a bias to people that have money or don't have money. So sometimes in the car
business, we can think, Oh, the person with challenged credit or affordability issue or
don't make a lot of money is almost less than or perceived to be like a headache.
Right. It's going to be hard for me to sell you this car. It's going to take a lot of work. I
might have to discount the thing, have a bank fee, $5,000 bank fee. I'm not going to make any money.
It's like not worth my time. Right. So there's a bias or a stigma that exists. But I come at it
from a point of view is we're all equals regardless of how much money you have in your bank account.
Right. And one of the underlying premises with Streamline is can we help align the dealer with
information that allows that person that maybe they have a bias and a stigma to serve? Let's
make it easier to serve that person. Let's make that 580 score that comes in today that just had
a discharged bankruptcy, your best opportunity for the day, and you can serve them quickly,
efficiently, transparently, just like you do the 800 customer that can buy whatever that they want.
This is so interesting. I have a friend of mine who was, while he still is the,
oh gosh, I'm going to screw up the title. He's the head orthopedic surgeon in the hospital. This
guy's making well over a million a year. He said to me that one of his colleagues, another well
paid, well salaried doctor, was going through a divorce. And he said a divorce is enough to
break even the wealthiest person's finances. And all of a sudden that guy couldn't afford things
or get approved for things that he would have to put before. And so it's like, to your point, it's
like, you don't even know people's situations. No, we hear the reverse of that. We hear the grubby
kid with dreadlocks that comes in and wants to buy a Lambo and they don't know the rich debt,
you know, we've all heard that story. Or like, or we put people in like credit criminal buckets,
or we use phrases like that's a good term, but the safety net that maybe didn't exist for them,
right? The divorce or the health issue or the job loss or if you own a restaurant during COVID,
or a serrillo, or a serrillo, a serrillo that comes to the country and doesn't realize he's
got to start over with no credit, but still needs a vehicle. Like, but that's what I'm picking up.
That's what I'm saying. Those life things don't mitigate the fact that I still need a vehicle.
That's right. And then I know I personally, I see this is hitting me, you're struggling for it,
because I've now sat in the seat of we can't help you. Yeah. And I'm like,
like, what do you mean? Have money, we'll spend. I have money, we'll spend wood,
buy in cash, but that's not smart business. Right. Right. But I felt that feeling, that empathy
of, whoa, why is this so difficult? Look, dude, this is a big financial purchase for people. And
it's an important decision that people are making and finance managers, sales managers and general
managers and dealership employees, salespeople, we have this opportunity to guide people and
navigate through this very stressful thing. We take it for granted, you know, when you're at
the dealership all day long, whatever, yeah, it doesn't matter if your payment's $1,000 a month.
Sign here. Right. Right. But for some people, they're choking on that. Right.
It, well, you know what it is. I mean, think of how many people you know that have ever who,
oh gosh, and this is not a, guys, you know us, we're not razzling on it. We're talking about,
we're attacking a problem and you're not the problem. Okay. Not the problem. Maybe some
be sensitive. But you, how many dealers have never bought a car before? Oh,
so, so do you know what I mean? Like I've never gone through the process of buying a car.
They don't need to go through their process. They go through a different process.
And that, but it's the same thing, like how we can speak so freely about things,
because we're in it, which sometimes I think removes a level of understanding that if
otherwise was there would change the whole way that we
desired an interesting thing like bias. And we don't see, we have these hidden blind spots
in our life. Right. I could probably talk to any luxury dealer in the country and say,
well, we don't do subprime business. Right. Okay. Then I could go look at their credit
applications inside a route one or dealer track and show them that the more applications they put
into the system, the closer they are to the national average 40% of consumers have a credit
score of 680 or less. So the more applications you put in statistically significant applications
you put into the system, you will highlight the fact that, oh, by the way, yes, you do have
customers with affordability challenges. Yes. You do have customers that have just gone through
a bankruptcy or a divorce or a health scare or whatever else. Right. And so if you're not
thinking about the affordability problem, then you're not servicing them. You're just servicing
the people that have buckets of cash. Wow. And that's, you know, K shaped economy stuff,
halves, halves, knots, but whatever. Was it you that just wrote? Did you just write a LinkedIn
post not too long ago about the K shaped economy? I don't know. I may have. It's fine. It's very
possible. Blackout, you know, stream of consciousness stuff. I love this conversation. I think it's
one of, you know, every now and again, especially when you're at an ADA, I just got to say this,
the conversations tend to start bleeding into one another. I feel like you truly come from a
different angle. We need to be thinking about this and considering this as we wind down Matt,
how can those listening or watching connect with you and learn more? Listen, LinkedIn's the place.
I'll probably get at you. You know, if you send me a message, I'll probably, I'll probably find you.
Or you just tag me on one of your wonderful pieces of content. I'll see it. You know,
we're gluttons for attention. All of us. This man knows how to make me blush. Okay. Thank you.
All right. So connect with you on LinkedIn. That's it. LinkedIn, Matt Lacher. I should,
I should plug the company, streamline.auto, like check that website out. I would love the
feedback. If you think we're nuts, what we're doing over here, like we'd love that.
We're here at the Auto Media Marketplace booth. Let's go. The dealer playbook hosted by Auto
Media Marketplace and iHeart Media Automotive. Matt Lacher, thanks so much for joining me on
the dealer playbook brother. So good to see you. Thanks so much. Hey, thanks for listening to the
dealer playbook podcast. If you enjoyed tuning in, please subscribe, share and hit that like button.
You can also join us and the DPP community on social media.
Check back next week for a new dealer playbook episode. Thanks so much for joining.
About this episode
Matt Lasher, President of Streamline Auto, dives into the persistent challenges in dealership processes, highlighting the 'great train wreck'—the disconnect and friction that kill deals and erode customer trust. He discusses the affordability crisis, the importance of empathy for customers with financial struggles, and the critical role of relationships between dealers, lenders, and technology. Emphasizing people-first approaches, Matt explores how technology can enhance human connections and improve efficiency without replacing the essential human element in auto retail.
Matt Lasher pulls back the curtain on one of the most expensive and preventable problems in automotive retail. The moment a customer falls in love with a car, spends five hours at the dealership, and then the deal collapses in finance because nobody asked the right questions early enough.
In This Episode
What the great train wreck actually is and why it is happening at every dealership every single day
How the affordability crisis is creating a tidal wave that dealers need to start preparing for now
Why lenders and dealers are like Mars and Venus and what it costs everyone when that gap stays open
The hidden bias toward customers with credit challenges and why 40% of consumers have a credit score of 680 or less
Why empathy is not just a soft skill in automotive retail but a business strategy
How technology should be used to enhance human connection rather than skip over the people that make the deal happen
Matt's perspective on why dealers are resilient and why this crisis is no different from every other one they have survived
About Matt Lasher
Matt Lasher is President at Streamline Auto and a people first advocate in automotive retail. With a background rooted in dealership operations, Matt now sits at the intersection of auto fintech and the dealer lender relationship, working to make it easier for dealers to serve every customer that walks through their door.
Key Quotes
"The great train wreck happens not because we want it to but because sometimes there is just a lack of information at the point that they need it."
"40% of consumers have a credit score of 680 or less. If you are not thinking about the affordability problem you are just servicing the people that have buckets of cash."
"Dealers are resilient. There is just no stopping the dealer."
Resources and Links
Connect with Matt Lasher on LinkedIn
Learn more about Streamline at streamline.auto
Subscribe to The Dealer Playbook newsletter at thedealerplaybook.com
Join the Dealer Playbook community for more conversations that matter
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