Car Guy

A Two-Wheeled Hedge Against Inflation

Your Christmas present from Ben Bernanke -- $3 per gallon gas -- is coming a few weeks early. But there's something you can do.

By 12.13.10

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Ho ho ho. Your Christmas present from Ben Bernanke -- $3 per gallon gas -- is coming a couple of weeks early. "Qualitative Easing" -- printing money, lots and lots of it -- is beginning to show itself in the form of less buying power for the money you've got right now. Gas hasn't really gotten more expensive; your dollahs have simply been discounted.

But there's something you can do, for once. And it's something good, too.

If you've ever wanted to get a motorcycle, here's your excuse.

Motorcycles -- even the big/fast ones -- get as good or even better mileage than a hybrid car. Some of the smaller ones can deliver 60-70 MPGs. They also cost much less to buy (and maintain) than a hybrid -- or can, at any rate.

I've got several bikes and been a rider for years, almost entirely for pleasure. But now it's becoming a great way to hedge against inflation. The recent upsurge in the cost of fuel gave me just the push I needed to make what I think is a savvy investment -- a new (to me) motorcycle.

Here's the math:

My everyday driver is a Nissan compact pick-up. Even though it has a four-cylinder engine and a manual transmission, it averages high teens/low twenties. If gas goes up to $4 per gallon again, it will cost me appx. $60 to fill the truck's 15 gallon tank --which will take me maybe 250-300 miles, assuming an average 20 MPGs.

If gas goes up to $5 or $6 per gallon -- and with the printing presses running 24 hour shifts, that is not an unlikely scenario -- filling up Buttercup (my wife's name for our truck) will be our new Mini-Me Mortgage payment.

I had this prospect rattling around in my head when, while surfing the classifieds online, I came across a very nice, low mileage used touring/cruising bike. I have always wanted one of these, not just because I own or have owned every other type of bike -- but because all my other bikes (sport bikes, antique bikes, dirt bikes) are not the hot ticket for long-haul trips. The other bikes I have are either not comfortable for long-haul rides (sport bike) too nice to risk being rained on (restored antique bike) or just too small for the highway (dirt/dual-sport bike). Also none of them can carry more than me and my wallet. But I had restrained myself before -- because adding another bike to my growing ensemble seemed like a sure-fire way to annoy my wife. Which anyone who is married knows is not sound policy.

But now I had an excuse. A legitimate, responsible reason for buying this bike.

The '80s-era Honda Silverwing (a slightly smaller version of the better-known and still-being-made Goldwing) only cost me $2,000 -- which is not unusual for an older Japanese-brand bike, even if it's in excellent condition. Nice used bikes -- ready to ride, with no Big Ticket problems -- are readily available in the $2,000-$5,000 price range. By car standards, that is chump change. But even better than the affordable cost of entry, the 'Wing gets 45 MPGs. Its 4.5 something-gallon tank only costs about $12 to fill up at current prices.

If the price of gas doubles, riding this bike rather than driving my truck will keep my effective gas costs about the same as they are at current prices. That will amortize the $2,000 cost of the bike in a matter of months -- and after that, it's gravy.

This bike is a fully-faired road trip bike, with a large windscreen to protect the rider and multiple storage cases that can carry enough stuff to comfortably take you 1,000 miles down the road -- or take home groceries from the store. It even has a stereo, if you're into such things. The point being, it is a bike that could sub in for a car (or truck) as an almost everyday vehicle. So long as it's not snowing, you can ride. If it does snow -- or you need to cart home some 2x4s -- you can fall back on your four-wheeled conveyance.

But if you can ride the bike even 50 percent of the time, your gas savings will be Not Small. Even at the current $3 per gallon. If it goes to $4 or more, and you have a bike, you have an investment in your financial security and a hedge against the ravages of the Fed.

In a worst-case scenario -- hyperinflation, with the cost of fuel soaring to $10 or more -- having a bike could be the only financially viable means of powered transportation left to us.

That's what I told my wife. And this time, she agreed with me!

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About the Author

Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.