Editor’s note: This is the fifth in a week-long series that looks to the future of the collector car hobby. Today, John Kruse, co-founder of Worldwide Auctioneers, considers the future of collector car auctions. Kruse, who is in his late 30s, grew up as part of an Indiana family well known through several generations for its various auction businesses. He also owns the Reppert School of Auctioneering, the largest and oldest continually operated auction school which was founded in 1921.
We have gone through a period of time where the auction companies, which for lack of a better term have largely been car dealers who have gotten into auctions, have been telling everyone else what cars are worth. I think there’s going to be a significant shift, a shift toward people and authenticity.
I think we’re already seeing that shift, a shift to where people — collectors and buyers — will be put back into the driver’s seat and the auctioneers are going to take what I believe is an appropriate role, that of more of a guide rather than telling people what to do, which happens through such things as pre-auction estimated values.
At Worldwide Auctioneers, we have eliminated printed auction estimates. It’s my opinion that the origin of estimates is not what people think it is. Such estimates cause problems, unrealistic expectations. Bidders and buyers should get to decide what something is worth in an auction format.
That’s going to be one of the biggest shifts, power going to the collector and the buyer, and that’s what I think auctions should be. We should be helping and guiding the collector buyers.
I’m a life member of the Auburn Cord Duesenberg Club and there was an article in the monthly newsletter about how the collectors are getting older and asking who is going to take care of these cars? That article was written in the late 1960s!
We also need to remember this is a hobby business. Regardless of how many millions or billions of dollars are transacted in our industry, it’s not like a normal business. This is a hobby. The people stroking the checks — the bidders and the buyers — are going to be increasingly in the driver’s seat.
But what about reserves on cars on offer? I am a huge proponent of no-reserve auctions. If you sell at no reserve in a properly advertised auction, you’re going to do well. I’m not familiar with anyone simply tanking at a no-reserve auction. Our last one set 27 records. Sure, you get a little nervous, but you know what? It works out. The market decides what things are worth.
Right now in the collector car world, on a national or international scale, Rod (Egan, co-founder of Worldwide Auctioneers) and I are the only owner/auctioneers that are out there. We’re in the minority but I think that’s going to change. We see a lot of auction companies getting swallowed up by massive organizations and that overtone of authoritarian process, versus the bidders and buyer sin the driver’s seat, isn’t going to fly.
Authenticity and people is what Millennials look for. Millennials are not just going to influence their decision-making elders and parents. They’re going to be the decision makers, and there are a lot of Millennials. We give them a bad rap, frankly, and while they’re still finding their way as a group, they’re figuring it out pretty quickly. And once they take hold, that’s the new culture, and it’s not going to take 10 years to get there.
There are two components to the demographic shift taking place.
Millennials want to have experiences and there’s not much more exciting that a collector car auction.
No. 1, we’re talking about age. But it’s never really been any different. I’m a life member of the Auburn Cord Duesenberg Club and there was an article in the monthly newsletter about how the collectors are getting older and asking who is going to take care of these cars? That article was written in the late 1960s!
Most people don’t end up with a lot of expendable money until they’re in their 50s, their house is paid for and the kids are through college. Millennials aren’t in that phase yet, but there are some young, hard-core collectors.
Too often we create barriers to entry. A shout out to the Gilmore museum, which invites younger folks with their cars to have tuner meets at the museum, and BMW meets where the cars are mostly 1975 and newer.
Young car enthusiasts scrape their pennies together and do some modifications to their daily drivers, for example, a mid-2000s Mustang convertible. But as they get older they will buy something cooler and the pinnacle of collector cars are not supercars form the last 30 years but the pinnacle is the pre- and post-World War 2 classics and sports cars. It’s just like art. You can buy whatever, but eventually you’re going to buy big-time stuff as you can afford it.
Yes, more pedestrian collector cars will decrease in value, but a Model J Duesenberg or a Ferrari California Spider will continue to go up forever because the 25-year-old today who might want to buy a foreign tuner car is going to end up buying those cars someday because they’re the pinnacle for collectors. It’s always been that way and will continue to be that way.
The second part of the demographic shift is that with the digital age and online consumption there’s a craving for instant gratification. That’s true to a degree, but online sales will never ever be a replacement for live auctions. You can’t replicate that. Online auctions are for business transactions, for things you have to have, not things that you want to have.
I can go online and plan a whole family vacation trip to Disney World, but I can only experience Disney World for real when I’m there. Live collector car auctions are no different than Disney World.
Millennials want to have experiences and there’s not much more exciting that a collector car auction.
Television and the internet have broadened the audience for collector cars, from tens of thousands to tens of millions, and not just in North America but around the globe. Ten years from now we’re going to have much larger global audience and a massive audience here domestically of kids who have been watching auctions all of their lives.
Television and the internet are increasing the collector base, the buyer base. They are increasing demand and those people are going to have expendable income and they’re going to be spend it.
All of these folks my age are starting to jump in and to spend money. We will not just have a thriving collector car market, but it’s going to be wider, broader, deeper, more diverse and significantly bigger than it is right now.
Demand for any good or service has two components: the ability to purchase, think money, AND the willingness to purchase, think of a vehicle you would not buy even if you had the money.
Demand within the collector car market of the future will be affected mostly by willingness of consumers to buy collector vehicles. Demographics, such as the aging of current collectors, and changing patterns of how people relate to automobiles, such as the shift toward the automobile as a simply a service such as Uber or Lyft, will continue to the reduce the willingness of consumers to collect cars. Who will collect driverless cars?
I believe his quote from the newsletter sums it up perfectly. My point is that collectors of vintage automobiles have been worried about the "next generation" since the beginning. This isn’t anything new. The hobby goes through lifecycles with each passing generation, and right now it is experiencing one of those lifecycles. That means collector values will change as well as what is considered collectable; as the torch gets passed from one generation to the next.
I’m very curious what one online site-Bring A Trailer- has done to the auction world. Because frankly, it’s a very well done system and does in fact replicate the excitement of a live auction, sans all the noise, cost of travel, cost of transportation for the seller, and many other headaches that come with the live auction territory. BaT has definitely made the purchasing of cars (even very low cost entry level collectibles) very very affordable and easy. And we all know how well "easy" sells in 2019!
I’ll never scoff at an auction-sale vacation, though. They are always a lot of fun!
My experience with BRING A TRAILER has been a disaster. I know several other
friends who have won cars on BaT and they regret they never went to see the car and
drive it.
Auctions are not the way to buy a 10,20,30 year old car. You will not be pleasantly surprised.
The sellers on BaT lie about the history and condition of the cars and the new buyers
have a 1 in 3 chance of getting what they paid for.
You can’t go back a sue BaT when you get screwed.
I have followed BaT for years.. and it has a great following and like most "business’s" it has morphed into a "money machine".. All the guys I know who actively sell on Bat are dealers, and they do very very well indeed.. it’s not difficult. You buy a pig with some history to it and just add the lip stick.. I had a friend who had a old italian sports car he could not give it away on the open market (he’s a dealer) the car was a mechanical nightmare (electrical issues/ fuel/ brake).. he detailed the car to the end of the World (dyed the seats) sent the bumpers out to Tijuana to be chrome plated.. car looked incredible.. bought a history for the car (yes you can do that).. heck ebay even sells Trophy’s.. and then wrote a wonderful story and guess what the car sold for over $20k in profit, the older buyer had the car transported and told him it would probably never be driven he bought it for his collection pure and simple. Most Bat buyers are well educated so the story just needs to be well written for a educated buyer.. with just enough of the "bait".. If you notice the same sellers are selling over and over again..
In response to Mr. Kruse, a traditional auctioneer himself, I’m not surprised he omitted mentioning the real future of car auctions, (BAT) Bring A Trailer.com in his article about Auctions and Collectors of the Future. I have been a BAT enthusiast since I heard about it on a cancelled Car TV show, called Car Matchmaker hosted by Spike Feresten. The majority of my collector car and regular car purchases have been mostly on-line and without driving the car before taking delivery of the car. At age 57 now, I have purchased collector cars from both the traditional auction houses. They set up a big show over four to five days in a city spending tons of marketing money over a two to three month period with mailers etc. to get buyers attention and get sellers to register cars for sale. The sellers have to get their cars they want auctioned to the site (a hassle and a transportation charge for the seller) and pay a registration fee (another seller fee) and then if the car sells, pay another seller commission fee to the auction house. If it doesn’t sell the sellers have to arrange to transport it back home. This could end up costing the seller at a traditional auction a small fortune and seems like a waste of valuable time. Not exactly what I would call the future of car auctions.
If your the buyer at the traditional auction house, the buyer has to pay another 10% commission and a transportation fee to get his car home. The only one making money is the traditional auction houses. Yes its a show, but if you want to attend and your out of town you have to pay an entrance fee and get yourself there and get a hotel room. Doesn’t seem like a very efficient future way of buying and selling cars at auctions.
My point is, the gentleman that had a bad experience with BAT, could easily have the same bad experience at one of these auction houses and paid significantly more for it. With my BAT experience I had more detailed pictures including undercarriage and engine and interior shots totaling 137 photos plus videos of the car running and driving and informative comments from the seller and other viewers and potential bidders over a seven day auction period. From the seven days of communication I had questions answered on BAT and I learned so much more than I would ever learn from an auto seller who placed it into a traditional auction that happens over a 5-10 minute period as it rolls up onto the stage. Plus the auction house does not give you the sellers contact info to call and ask questions and all you get is very limited photos on line and no undercarriage photos at all.
When there is an opportunity to make a better product and or generate an exceptional experience at less cost to the consumer, disruptions like BAT to the car auction industry are inevitable. I have had very good experiences with both styles of auctions. But even an old Baby Boomer like me sees the future and I overwhelmingly prefer the BAT model.
Happy Motoring!
CobraRman
Remember this article was written by an auction company.They are just selling a service.Auctions make money no matter what age you are.And sure auction companies are against reserve cars.You the seller are in charge.This article is written to convince that There’s not a problem with the future of collector cars,and there is.Young people today couldn’t care less about a Boss 302 or 67 to 69 z 28
No air?? Are you kidding? Ya Lol.
Thanks for writing the article it’s well-written
I will agree that a broadened international market for United States based collector cars is good or values as is the excitement of a live auction I simply don’t believe that those two things by themselves will continue to support the collector car values and that probably racing and car collecting is going to go away in the next 10 years
The article itself ignores the fundamental changes that are present in the world today that just weren’t here anytime in the last hundred and fifty years
As much as I’d like to agree with this article, as a 65 yr old retired man who’s a lifelong car and motorcycle collector I can tell you it’s a lot different "on the street".
Most people who watch auctions on TV do it for entertainment…and to get an idea of what the cars they like might cost. Unfortunately, the TV auctions are very confusing. One night a cool car from the 50s might go for $16k…the next weekend, a similar car goes for $90 grand. The only constant is Ferrari and Cobras…we all know they can go for millions. So much for "auctions" getting young people excited. And all the detailed reasons cars go for wildly different amounts is never really discussed on the TV shows, despite having 2-3 guys doing play-by-play. I’ve never heard a Millennial say to his/her friends "Let’s take a road trip to the auction and buy a cool car!". In fact, here in Detroit, where you see more classic cars of all kinds 12 months of the year, I’ve never seen or heard a Millennial get excited about anything older than a ride from the 80s or 90s. And then a good 3/4 of them drool over Asian makes that they tune via computers. The other problem with this young group is that a great many of them have no desire to even own a car…any car. If they live in a big city, Uber and Lyft provide a "limo-like-experience" (which is key in their constant maintenance of their personal "brand") and is usually charged to a parent’s credit card. A car eats up too much of their capital…and many (not all) use most of their cash to live the lifestyle they feel portrays the image they choose to project. Taking an Uber out to the hot night spot and then bar-hopping with their friends in a car they order on their phone, is their version of "cruising". This group will not suddenly become fascinated by any pre-war classic at any point in their lives. Also a great number of young people are being influenced daily by the "green-crowd" who considers cars to be evil…as part of their virtue-signaling they wouldn’t be caught dead pulling up to an event in a loud, gas guzzling, smoke burning muscle car, let alone a Model T or A, (not that they would ever take the time to learn to drive one). As an aging Baby Boomer and former classic car dealership owner, I’m using the time we have left to buy what I can afford…drive it with joy I and don’t consider for a moment it’s investment value. If the climate change opinions keep going the way they are headed, I fear classic car owners will go the way of the people who used to own horses. We will slowly and over the next 20 years, be forced to "play" with our cars on private property far away from city traffic…think Auto Ranch. I’m sure some will find these thoughts very grim, but as I said at the outset…take this conversation to the street…or your next Family gathering and ask young people about cars. You’ll be shocked by their opinions in many cases.
I really hope classic cars and collectors live on forever, I personally have 8,wish I kept all that went through my hands!! Young and old they put a sile on a face and always spark curiosity , and a neverending love and good feeling when your near one!!