Car Auction Collapse Claims Kruse

Following on from Honda’s loss of Facebook over the Crosstour—or loss of Crosstour over the Facebook— here’s another story where the web pulls the rug from under auto industry types seeking to hide the truth. We’ve been saying it forever (in Internet terms): the collector car market has collapsed. Well, duh. But the mainstream media and specialist press has both been happy to perpetuate the myth perpetuated by the auction houses that their business has been defying gravity. See? Cars are selling for phenomenal prices! Meanwhile, Hagerty’s CARS THAT MATTER (must do, given the shift lock situation) is telling readers to pay attention to the men behind the curtain.

To wit: in an email to subs, the price guide outs an ailing auction house: “The half-empty parking lots of Kruse Auction Park hint at the real story: According to the Fort Wayne Journal Gazette, Kruse faces legal actions in excess of $16 million. It seems that the various companies that make up the Kruse empire have had some trouble paying their bills, including the mortgage on the auction facility, American Express charges, and other loans. Perhaps more disconcerting to car collectors is that Kruse’s many creditors reportedly include over 60 sellers who have yet to be paid for vehicles that were auctioned.” It gets worse.

In his defense, company patriarch Dean Kruse told the Fort WayneNews-Sentinel that he is owed some $6.5 million from previous auctions and just needs to generate some revenue this weekend to keep the wolves at bay. Indeed, the Labor Day weekend proceeds are subject to court garnishment in order to pay the mortgage lender. Clearly, Kruse needs a great sale, however unlikely that may be. As of Saturday morning, the Kruse Web site lists 1,749 vehicles in its online catalog, far shy of a typically inflated claim of “5,000 cars.” Firsthand observations confirm a sparse staging area, and few truly marquee automobiles. To make money as an auctioneer you don’t necessarily need particularly high quality cars, but in that case, you do need numbers. This year, Kruse seems to have neither.

Again, it’s a good time to buy, a lousy time to sell. How hard is that to understand? Of course, it’s not all truth and reconciliation on the web. Edmunds, post-Monterey: “Numbers are down, but things could have been much worse had the economy not recently made a push upward.” Or the auction houses hadn’t managed the quality of the lots to keep the pig smothered in lipstick. Just sayin’. As is our wont.