The F100 Millionaire

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Most of the advice out there about dealing with the obnoxious rise in the cost of fuel advises you to spend yet more money – on a hybrid or on some other new car. This is not very good advice.

The best way to save money, in tight times or other times, is not to spend it. Period. That simple dictum is the philosophy many an “F100 millionaire” has followed. What is an F100 millionaire? He’s the guy who drives that old F100 pick-up truck with more miles on it than Betty White. The secret is he could buy a new S-Class Mercedes-Benz in cash if he felt like it. But the reason he has cash like that is precisely because he doesn’t do financially dumb things like buy a new car that costs $82,000 – but which will be worth half that in three or four years.

How does this lesson apply to the gas crunch – and the rest of us?

Again, it’s pretty simple.

First, it’s probably smarter to stick with whatever you are driving now – even if it is a “gas hog” SUV or truck. For openers, you probably still owe money on it. And if you do, it is a near-certainty that you will gush cash if you trade it in or sell the thing on your own. Many new cars loans last five or even six years now; even the shorter-term loans put the borrower in peril of finding himself “upside down” – that is, owing more on the loan than the vehicle is worth mid-way through the loan period, due to depreciation. Remember, the principal and interest you agreed to pay the day you bought the vehicle do not go down except by paying them down. Meanwhile, the net worth of your vehicle drops a little bit every single day – often, at appalling rates. It’s even worse right now for trucks and SUVs because of the gas price situation; the manufacturers can’t sell the new ones and the value of the old ones is dropping faster than an engine block down an elevator shaft.

If you get all panicky and decide to trade in your 15 mpg truck or SUV for a Prius, you might be paying less at the pump. But you may also have just pissed away five or six grand to just to say sayonara to your old truck/SUV. Even at $4 per, that would have bought you gas for the next 2-3 years… .

Really, the only way to make this deal work is to park the gas hog and drive it as little as possible – and hope (and wait) for one or two things to happen:

The first – to be hoped for – is that gas prices will eventually drop. The current situation is due to inflation and speculation – not any shortage of oil. If you join the lemmings desperately looking to dump their larger vehicles at any cost (to them), you’ll feel even more depressed if, a year from now, gas is back at $2.25 per.

The second – which you can count on – is that the disparity between what you owe on your present vehicle and the equity you have in the thing will decrease the longer you own it. Eventually, that dynamic almost always works to your advantage. Once it’s paid for, you have just reduced your total ownership costs by a tremendous amount. Even if it only gets you 15 MPGs, if you aren’t having to make a $500 monthly payment (and your property tax bill has dropped to a fourth of what it was a few years back) then you come out ahead – even if gas is $5 per gallon.

In the meanwhile, just use common sense. Drive less than you have to. Many of us can easily cut our gas bills by 20 or 30 percent just by doing such things as going shopping for food and so on twice per month instead of once or twice each week. Pool trips with friends and family and co-workers. If you have kids and they need to go to practice or after school activities, talk with other parents about swapping off the driving chores. Use a service like Netflix – which delivers DVDs to your mailbox or pipes them directly through your DSL line – instead of driving to a Red Box. Order stuff online – and let someone else drive the stuff to your door.

Keep your tires inflated; even maybe run them at the maximum recommended PSI (listed on the sidewall of the tire and in your owner’s manuals). They’ll wear a little faster and you’ll have a harsher ride – but you could save a few MPGs this way.

Beach Cruiser bike

If you have a bicycle and it’s nice outside and you can use lightly traveled side/secondary roads – use it. It’s not just free transpo, it’s good exercise, too. And the more healthy you are, the lower your health care costs will probably be. If you’re paying less for pills and doctor bills and insurance premiums, $4 or $5 per gallon fuel loses a lot of its sting.

High gas prices are also a great excuse to ride your motorcycle more. Who needs a $30,000 hybrid that gets maybe 45 mpg when you can knock around on a $2,000 used dual sport 250 cc bike and get 60-70 mpg?

You see the point.

Whenever possible, keep your wallet (or purse) closed. Many of us have become reflexive consumers who have been conditioned to think that the solution to everything is to buy something. But the truth is that much of what we spend our money on is neither necessary nor a good deal for us – whether it’s a $400 Prada handbag or a $30,000 Prius. We may have little control over the cost of fuel – but we have a great deal of say about how and when and why we spend our money.

And that is the secret of the F100 millionaire… .

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  1. How do you feel about CAN-BUS communication?? Ever tried to find a battery drain on a car so equipped? Late model BMWs that have major electronic components that are coded to the car?? IE no used parts for those….The major electonic parts can only be coded once,and parts swapping will no longer work. VW mounting control modules on the floor where they get wet…. I think you could flood my corvair , and if you dried it out in time,(before it rusted solid) it would still run. Modern cars are not going to do that. Plus, in TEOFTWAWKI, an EMF pulse will just stop alllll the computers, whether or not they are connected to a car.

    • Jesse, excellent points!

      My Trans-Am may be a gas pig, but no computer to fry. Ditto the bikes. They’ll all still run after an EMP… or even a swim. Anything modern, fuggetaboutit!

    • You know what your post reminded me of? Videotapes!

      Here’s a short walk down memory lane. Back in the day if a movie was messing up while you were watching it the tracking could be adjusted, or the physical tape could be manipulated (whether by moving, cutting and splicing, etc..). Now all you can do is rub on the dvd and hope! Is that progress/evolution?

    • There isn’t much that can stop corporations that have a culture that produces difficult to service product. Such decision making didn’t start recently.

      Diagnosis by parts swapping was never a skillful or cost effective approach. CAN-BUS is a different logic, a different way of doing things requiring the same skills in logic and diagnosis as always.

      But today we have the internet that allows information to move faster than ever before. Much more difficult for a manufacturer to hold service info secret and solutions to most every problem are posted somewhere.

      Nuclear war EMP will take out just about everything made after 1973 because in 1974 electronic ignition took over. I keep a set of points in the trunk of my ’73 so come EMP I’ll still be able to drive through the wastelands to look for ‘juice’.

  2. Yeah, OBDII is OK, but where are you going to get a new electronic whatever in 10 years? Who is going to code it for you? I work on a broad range of car on a regular basis, from Model As to BMWs, Jags and so on into the 2000s. The new cars are nice in a lot of ways, but they are so dependant on electronics to function. A car with carburetors and points can usually be jury rigged enough to get you home. A failed crank sensor on a newer car, and you are sidelined. Old cars also tend to be simpler in all ways. The most sophisticated thing you are going to find might be a relay. You can simulate an “on” relay with jumper wires. Most pre government interfearance (pre 68) are considered to be “collectible” these days, which means a decent supply of parts. There is no reason that someone with decent mechanical skill could not keep an older car running forever. That may not prove to be true of cars of the modern age.

    • All computerized vehicles have limp home modes that simply assume or interpolate certain parameters when sensors fail. You simply don’t need to go under the hood and kludge something so the car gets you home, the computer compensates automatically. Like alternators, turbochargers, distributors, and other components the engine computers are available as reman units.

      The great “void” parts wise is now for cars about 15 years old and largely consists of not being able to find trim and other cosmetic parts. Go-Stop-steer parts are available for anything that was built in great enough numbers to have people keeping them up.

      The electronics are IMO a issue of people being afraid because it is different. The sensors and such really aren’t magical.. they are downright simple. If you can understand a tooth wheeled sensor, a resistor wire, an O2 sensor, and a bi-metal choke spring you can understand just about how every modern automotive sensor works.

  3. A few years ago I would have agreed with this article entirely. Right now I would say buying a new car if it can be done without debt may not be a bad thing to do given the massive increase in the money supply by the fed.

    Someone with an old car and enough cash saved to buy a new one has to consider that in a year or two that cash might not buy a new car. Probably best to keep both cars should inflation start running amok. Even depreciating assets would be better than cash under hyper inflation.

    • Possibly! I’d advise using the money to buy other things, such as supplies and hard assets. Buying an older (pre-computer) car might be a very smart move, too. If TSHTF, having a simple, easy to repair car might be very preferable to owning a highly complex computerized car you can’t repair yourself – and which you can’t afford to have repaired by someone else….

      • While other assets are good, a car that doesn’t need things is good too. No computer means 1981 or older, points means 1973 and older… and old cars need things because they are old. Those parts are getting more expensive.

        Ultimately though, old cars need things, need time, need labor. My oldest car is “a model made before catalytic converters so it’ll run good on regular (leaded) gas” and its needs plus my 11 and 15 year old cars tell me to get something new while the getting is good.

        BTW OBD2 isn’t difficult with the right tools. A decent scanner, laptop software, and/or reference and the difference in fixing an old car or a new one yourself isn’t that great. The new ones often easier because of all the info OBD2 software can track. Tracking misfires with a laptop on the passenger seat was rather helpful to me a couple years ago. It’s really not much more of an investment than buying an old fashioned “engine analyzer” box with dwell/volts/tach/etc, timing light, and other tools were back in the day.

        • Brent, I agree. These systems make it easier usually. As an example I had a bad spark plug once that was misfiring and it pointed rigt to it. I have found other problems also on multiple cars. I have never had to take a vehicle in for service because of something that the computer caused. Most of the time the computer helped a lot.

  4. The other side of that particular coin is, if there is a car or truck you want to pick up used….. this can be a great time to get a deal on a “less than economical” but still nice/desirable car. Take advantage of other peoples errors in judgement.


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