Stocking up on cars

#1

Dear Tom & Ray et al.,

Would you discuss the in’s and out’s of “stocking up” on cars as a hedge against future inflation? For instance, I just bought a 2009 Honda Fit that I love and which is basically considered to be the best car in its class?with high quality workmanship, excellent safety features, high MPG, and so on. So my question is, why not go out and buy another one, for the relatively low price of $16k, and simply store it as a hedge against future inflation? Then, after 15 years or so, I could simply take it out of storage and use it when my current car has worn out. My point is, if one could live with the stylistic and other changes that will have occurred in cars at that time, one would have a “brand new,” high quality car that represents a huge bargain when compared to the undoubtedly highly inflated prices of those future cars. And, if you agree that my idea has merit, how would one go about properly storing a brand new car for the next 15 years or so?

#2

Is it guaranteed that there will be a place in society for a personal transportation device powered by the internal combustion engine fueled by gasoline 15 years from now? probably yes,the idea of buying and storing a car for 15 years,with the idea of returning it to everyday use has pitfalls that probably cannot be fully realised.

I see rules and regulations potentially getting in the way of this plan.

#3

The price of cars in terms of earning power has been decreasing constantly over the years. In other words, most people’s incomes have risen faster than car prices.

When I first go out of school, a basic Chevy was about 6 months of my gross yearly income. Last year, the basic Chevy had increased in price by a factor of 6, but my gross income had gone up by a factor of 20.

Cars are also getting better; in 1974, after the first oil shock, the curator of the Detroit museum bought 3 full size Mercurys!! He figured that those "good"cars were going to disappear and would be permanently replaced by inferior small cars!!

He was right; thank God those crappy, rusty mid 70s cars with their thirsty and balky engines are gone for good.

Believe it or not, there will be better cars (than the Fit) available in the future, and at a price that will be more affordable for most people. The only exception is those folks on a FIXED retirement income who would benefit from buying 2 new cars they intend to drive, that last 20 years, so they would never have to worry about buying another one, unless they had an accident. Storing a car as a hedge against inflation makes no sense, since cars detriorate as they age, whether they are driven or not. The rubber, fluids, trim, etc gradually deteriorate.

Take the $16,000 and invest it wisely; it will return more than enough to buy a good car later!

#4

The problem with this idea is that after 15 years, your stored car will not be like new. Maintenance schedules usually have two intervals, time and mileage, whichever comes first. This especially goes for rubber parts like tires, belts, and hoses. So when you take your 2008 Fit out of storage in 2023, you will need at least the following:

  1. a new battery
  2. a new timing belt (and other belts)
  3. new tires
  4. new hoses
  5. new coolant/antifreeze
  6. new transmission fluid
  7. an oil change
  8. new brake fluid and clutch fluid
  9. new power steering fluid

…and those are just the items I can think of now.

A car isn’t an investment. Even if it is never driven, time will make it depreciate and some wear will still happen. You will have paid a premium price for a 15 year old car.

#5

Sorry, but it’s not a good idea, once you figure in the deterioration over time (or the expense to avoid that deterioration) and the storage costs. An I’d much prefer to (as Doc suggests) to invest the $$ and then buy the best vehicle available 15 years from now with that money.

#6

“Is it guaranteed that there will be a place in society for a personal transportation device powered by the internal combustion engine fueled by gasoline 15 years from now?”

Agree…the IC engine is very adaptable and can run on a variety of fuels. They just need to be certified and the fuel system needs material that will withstand the corrosiveness of alcohol and NG conversion.

Electric cars would spell the demise of the auto industry as we know it and there is still a trillion barrels of profit left in the ground. All of this insures the longevity of the “filthy” cancer causing internal combustion engine that we all know and love.

#7

This actually worked in the 1980s. Inflation was so high that if you bought a Ferrari this year, sold it next year, bought another one, and then repeated the process about 5 times, you could buy a new Ferrari free and clear with the profits. The problem is having inflation high enough here but not where the car is built and knowing that inflation will remain strong enough for long enough to pull this off.

#8

A friend “stocks up” on cars…he has more 4 bay garages than most families have autos. We used to laugh at his compulsion. His cars, cycles and tractors now have shown better financial growth than the stock market…and he’s having fun and laughing at us.
Keep in mind that even “stored” cars need some maintenance if they have intended use.