Step away from the stock market for a moment, and look at a different kind of trade.
If you’re looking to double your money, don’t invest in the markets.
Just buy a 1989 Geo Metro or a 1972 Honda Civic.
Both cars got 40 or more miles to the gallon when they debuted decades ago – performance levels the current generation of hybrids are only now starting to obtain.
With their tiny engines and small frames, the cars have long been denigrated as "putz" mobiles and ridiculed for their hopelessly tacky styling.
But now, they’re the ultimate in geek chic and it’s not difficult to understand why.
These cars are teetotalers when it comes to high-priced gasoline. And their owners, such as my friend John, grin ear to ear every time they fill up.
"Especially," John says, "when I’m parked next to one of those fire-breathing, jacked-up, gazillion-liter pickups."
But it’s not just the gas mileage that matters to their owners.
In an era where inflation runs rampant, the cars are cheap to operate and relatively dependable – even though some are nearly 40 years old.
But, before you can drive one, you have to get your hands on one, and that’s proving to be an increasingly expensive proposition lately.
Prices for these tiny wonders have literally doubled in recent months at eBay Motors, the automotive sales subsidiary of parent eBay Inc. (NASDAQ: EBAY, Stock Forum). You’ll find the same soaring prices in various car trading magazines. According to a quick review of AutoTrader.com, many of these fuel-efficient used cars are now approaching five times their Kelly Blue Book value, which makes people like Marci Solomon smile ear to ear.
According to CNN, Solomon bought her 1996 Metro for $7,300. That’s hard to believe, considering the danged contraptions sold for just around $9,000 when they were brand new.
It’s the same with the Honda Civic. Typical "beaters" (modern-day gearhead slang for what our fathers used to call "jalopies") are available for a few hundred dollars, but good models run into the thousands. Collectors gladly pay even more.
What’s particularly interesting is that the current generation of fuel misers are also already shaping up to be great investments.
A year ago, I looked at a funky, two-door Honda Insight in stellar condition for a mere $7,200. My sons call these the "Ultraman cars," because members of the Japanese superhero Ultraman team drive them. Today, eBay Motors lists only three Insights, in half as good a shape as the one I reviewed last year, with prices ranging from $11,900 to $14,555!
Meanwhile, first-generation used Toyota Prius cars have also been appreciating rapidly in recent months. The lowest price listing for a Prius on eBay Motors is $9,000, while more recent models are already in the mid-$20-grand range.
I wouldn’t be surprised to see them approach $30k in the next 12 months as gasoline heads even higher.
Talk about a "trade" I wish I’d made… and may still make.
