The Car as a Commodity

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For many people, a car is not a means of transportation; it is a commodity. You may have pondered a vehicle as an investment, in recent years, instead of a loan being financed against your house, many people have used their car as collateral. But in order to think of it as a commodity you’d have to consider three things:

  • Is it an asset or a liability?
  • What’s its current value vs cost
  • What’s the likelihood of future appreciation or depreciation?

Asset or Liability?

We’re car people here at the Kicker, not certified financial advisors. So let’s take a moment to state the obvious—the purpose of this post is to get you thinking about the impact your car has on your finances and some smart moves you might choose to make regarding your car.

That said, every physical asset is also a liability. Vehicles are status symbols, toys, and a source of joy, but they’re primarily a tool you use to transport yourself and your loved one’s places you need to go. Often if you don’t have a car you can’t earn an income. So its an asset. It can also break down or you can get into an accident which could cost you a lot of money and leave you’re physically injured.

Current Value vs Cost?

This consideration includes getting a good deal on a car purchase, but it’s more than that. Fuel economy is a big thing to think about. Do you really need a truck for your daily driver or would it be better to get an old truck to drive mainly on weekends and a smaller daily driver?

Do you need a car at all? Sometimes in a city, with rideshare, bus lines, mass transit and all. You might be better off with a minimal investment for your occasional use. Maybe buy something older that you don’t rely heavily on so you aren’t stuck in a bad way if it breaks down occasionally.

Maybe your needs warrant buying new to get a low maintenance car, that’s safe and reliable.

Retained Value?

But do you need a brand new car or a classic car? What happens to the price of a used car?

Imagine that there is a brand new car, a used car about 5 years old and a classic car from the 1960s. For them to be the same price, the used car might be low mileage and luxury vehicle. A lot of the value of a new car is the warranties offered to the first owner. Sometimes special financing is available on a new vehicle. Maybe the brand new car isn’t popular and is discounted to make room for the next year model. Generally, a slightly used car will have a much better value for the price.

But what about the classic car? Of course, mileage, service history, condition, and popularity really come into play with the classic car. Well, that would also need to be a good make and comparatively well-serviced. For the classic car having not much mileage on the clock may be a disadvantage, it could indicate a history of sitting broken. It can also be bad for cars to sit if not properly stored. A considerable amount of mileage would be expected and wouldn’t do much with the price of the vehicle.

The used car and the classic car may have the problem with obtaining parts in common, with the difficulties tending to stack up with the classic car. Another point in the used car’s favor is that it would probably not break down, but the classic car may break down all the time.

The classic car is the car almost like a commodity in one respect, not bought to be used, but as a status symbol and perhaps the most likely to gain value. Of course, if you actually use the classic car as a family car it won’t retain its value as well as if it’s babied.

How it usually stacks up:

The real problem with the new car is that its value decreases extremely quickly. A car can lose 10% of its value simply through being driven home. That’s a big hurdle to overcome. The sales price is only one factor, however, and very soon the used car and the classic car will be the more expensive to maintain so the carrying costs are higher.

When you factor purchase price and carrying cost (likelihood it’ll break down and cost to fix), plus cost to operate, it’s not looking good for the future of these three vehicles. Which is the best choice?

It always comes down to your needs and intended use. Most of us need a slightly used car, with a fair upfront price and spread the expensive maintenance over the next few years. However, if you buy a lemon you’ll regret it, so have your car inspected.

You might ask when these three cars will be the same price again.

Certainly not when they are sold for scrap. The classic car has a much higher scrap value – the parts are novel, the standard of the interior much more likely to be worth preserving. Certainly, it will be a long time before the new car is scrapped, but when it does there will be nothing remarkable about the parts.

So which car would you have?

 

Surprising Glove Compartments

We wanted to name this “Past, Present, and Future of Glove Compartments” but it was a bit long and some of what we ran into was surprising. For example, the future of glove compartments is not a sure thing.

We take the idea of a glove compartment for granted, most people knowing it as an area to the left of the dashboard in front of the passenger’s chair. It is not known as the glove compartment in all areas of the US though, the other names being a cubby hole and around the Rocky Mountains the jockey box. The strangest name must be the torpedo compartment, maybe due to being an ideal spot for a villain to hide a torpedo release button? Brits call it a cubby box by the way.

 

But where does the whole thing of a glove compartment come from? Well it should be obvious that it dates back to when gloves were a prime piece of equipment for the driver. With a rough steering wheel which got oily or hot, gloves were seen as useful to keep the hands cool and clean.

The first use of the term is thanks to a racing driver, Dorothy Levitt who is believed to have used a glove compartment, but it was in a different position than we find it today. The location of the glove compartment was to be found under the driver’s chair and was a just a set of drawers, presumably used for storing more than one set of gloves. The driver’s chair was raised higher than today’s chairs and there was no passenger’s chair next to the driver’s chair. There were no trunks in early cars; the storage was in hampers or baskets. The term “trunk” may have come from a huge box used to store certain equipment in the car.

The alterations to what was stored in the glove compartment came as early as the 1930s. No one would use them to store gloves at this stage.  It has been more often used as an area to store valuables or just to show you had valuables that you could afford to keep in a car.  In modern days these luxuries have included laptops and mobiles as well as Sat-Navs. Or you may keep documents associated with your vehicle.

And it seemed like a no-brainer to keep the glove compartment near the dashboard so you wouldn’t need to go under your seat to find anything and could also make the seat lower.  The weirdest thing that has been kept in the glove compartment would seem to be tiny dogs, though personally, I would worry about how much room they would have.

So why do we think the humble glove compartment might actually be dwindling in popularity. Many cars, even luxury cars do not come with glove compartments. It seems that a sizeable amount of the vehicle owning public don’t use the space at all, 25% prefer to keep the space empty.

If you don’t have a glove box you will likely need alternate solutions to your storage needs. Kelly on Hative.com has loads of creative ways to store things in your car if that’s your challenge.

Of course, another reason you might need more storage in your car is that you have too much CRAP in there. In that case, we bring you Aby of Simplify101.com with ideas about the best way to clean out your glove box. Starting with this quote:

First, clear everything out of the glove compartment and load it into a portable storage container. Take your bucket of stuff inside to a flat surface (I used the kitchen table) and sort like with like. Toss out the things you don’t need (like old ketchup packets) and find a new home for items you need but not in your car.

Which should leave you with the bare essentials and a few extras. Nationwide insurance suggests the following list of must-haves:

  • Medical information.
  • Emergency contact numbers.
  • Pen and paper.
  • Proof of insurance.
  • Owner’s manual and maintenance schedule.

We have a couple luxury items to add to that list, of course, but it’s enough of a topic to rate it’s own post soon. If you’re a traditionalist and actually want to store gloves in there, here’s a set that come well recommended.

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Autodromo Slingback Driving Gloves

The glove compartment could be an area ripe for innovation though, with car space being at a premium.

As we’ve recommended before, if you have an old cell phone on pay as you go, you could keep it in the glove box so you can use the GPS location to find your car if it’s every stollen.

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According to Thrillist, the 1957 Eldorado Baughm by Cadillac came with a cocktail set for the glove compartment. Perhaps a better concept would be an area to keep drinks cool.

If you have any ideas about what the glove compartment could be used for or maybe what a replacement for this cubicle could be please comment below. All innovations have to begin somewhere, after all.

 

Auto Testing

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When you hear the words new car testing, what probably flashes to mind are dramatic videos of cars deliberately smashed against walls in a closed facility with a number of dummies inside. In reality, this is only one of the many tests cars go through before entering the market.

Post premarket auto tests are carried out in “the real world” to see how the car, including its components (paintwork, engine, etc) cope with the vigorous conditions; mud, fording streams, icy conditions and so on.

car-1242080_1920The actual number of tests that a manufacturer takes a car on is a closely guarded secret, but it is known that they use places like Death Valley or a test track in the mountains of Germany in order to see how the car operates. The testers are interested in how the car accelerates and, perhaps more importantly to us as drivers, how it brakes. Generally, they are looking for how the car handles on these extreme roads and this driving routine.

Driving smoothness in what most people might feel are unsmooth conditions is important. Although it would be impossible to remove all the bumps and jolts it is up to the designers the minimize discomfort.

Comfort is another aspect that people tend to need to think about. If the front seats or the back seats do not feel right some redesigning might be needed. Then there’s the problem of leaks, either air leaks or fluid leaks might need to be looked at. Is there a likelihood of something further along the line? Your prototype is your opportunity to address problems before they get truly expensive, which is when it’s gone into production.

Although unfamiliar to most of us, the industry refers to this as “rig and component level testing.” Think of the rig as another name for the chassis or body and the components as everything else. More precisely, rig testing works out exactly how durable and sensitive the chassis is to certain stimuli, and component testing focuses on individual elements and how they work together.

Some tests require the car to be built but others can be accomplished through computer simulations. Jaguar, for instance, uses computer simulation as a good way to save money. Why build a car that will be considered unsafe? Many people have heard of Computer Aided Design or CAD but the car industry is more reliant on CAE or Computer Aided Engineering. Simulation is hardly a new use of computers but as technology increases the number of virtual tests also increases.

Perhaps the single most important car feature, after safety, is fuel economy. Despite all the projections about miles per gallon, someone has to actually drive the car far enough to establish the actual number. Until recently, cars haven’t been very efficient in this respect, but car buyers are starting demand better efficiency even in luxury sedans and trucks. The need to save energy and fuel prices changes things.

There is so much testing involved in automobile manufacturing that is a wonder that any car ever goes into production at all. Perhaps more startling is the number of high profile recalls of cars in recent years given the rigorous testing designed to make the cars safer. Still, with all the money involved, and all the possibilities of what could go wrong, testing is an important step in the process.