Dirty Rats
“Tick-tick-tick-tick.”
Our family wagon was having a moment.
The indicator seemed to be hyperventilating, ticking madly at triple speed.
‘Probably nothing’, I thought to myself.
Then a red warning light began flashing: ‘brake light failure’.
Okay, so brake lights are kind of a non-negotiable.
I detoured to the local mechanic’s, just to be on the safe side.
“You got rats!” he announced after popping the bonnet.
“They’ve chewed through nearly all the wiring … I’m surprised you couldn’t smell them.”
I was not surprised. Our family wagon is a house party for a mouse party: half-eaten Cruskits, discarded Vegemite toast, rotting peaches, even the odd nappy. It’s revolting.
So serves us right, right?
Well, our other car — my car — is a strict ‘no food zone’, yet as soon as I got home and opened the door I knew Mickey and his mates had spent the weekend partying there too.
(Life on the farm has its drawbacks.)
Yet what happened next floored us:
The insurance company got the mechanic’s bill to painstakingly strip back both cars and redo all the wiring … and decided it would be cheaper to write off both our cars instead!
So, being the Barefoot Investor, I set off to buy two used cars.
And that was when the real trouble started.
My first call was to a mate who works at a used car dealership in the bush:
“Sorry, I’ve got no stock”, he said. “I sold the last two cars on the lot to a dealer in Perth! He’s transporting them over there for god sakes! In my 25 years in this industry, I have never seen anything like it.”
He was right.
Over the next few weeks, every used car I looked at was priced around 30% higher than Redbook (the industry pricing database) indicated it should be.
What was going on?
Aren’t cars supposed to fall in value?
Normally, yes.
In fact, by as much as 40% over the first five years.
Why?
Well, mainly because we Aussies purchase around 1.1 million brand-new cars each year. (A staggering figure given there’s only 25 million of us on the island!)
Yet in 2020, like most things, the car market had a bingle.
We still wanted to buy cars, especially to escape the great unwashed on public transport.
Yet, because of COVID-related factory closures, the global car industry supplied 23% fewer cars in 2020 than normal. And so demand spilled over to the used car market: Moody’s Analytics found that second-hand car prices increased 36% last year — the biggest on record.
In other words, for the first time ever, the demand for cars outstripped the supply.
So in the end we split the difference and bought both a new and a used car.
Which shows just how fortunate we are.
Spare a thought for young people: not only have they borne the brunt of the COVID layoffs (being part-time and casual workers), but the cost of their first set of wheels has just gone up by a third!
If that’s you, don’t panic.
Truth is, you have a wonderfully long road-trip full of adventure ahead.
And remember, one day that open road may turn into a school run. You’ll find yourself behind the wheel of a people-mover, with cranky kids in the back and a woeful whiff of rotting peaches (and mice droppings) coming through the vents.
Soak in the smell of freedom while it lasts!
Tread Your Own Path!