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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • Fun Cars For Free Care Of NHTSA 11 comments
    Jan 4, 2013 6:57 PM

    The 1997 Land Rover Defender 90 actually is a sport-utility vehicle - this is a beastly tank of a vehicle intended for sport or utility. The D90 has reached every corner of the Earth and Land Rover means it when they say it is for "off road". Demand for such strange vehicles is limited to a strange group of several hundred people per year who like how it drives and looks. This can't even be described as an "acquired taste", because if you don't have it, you won't acquire it. The ride is harsh and in a wind tunnel, the D90 will send the wind right back where it came from. I love it.

    But what is most interesting about the D90 is that it was a wonderful opportunity to purchase at a bargain price of $34,000 in 1997. The opportunity arose because Land Rover refused to be pushed around by the joyless pests at the National Highway Traffic Safety Administration (NHTSA). At the time, half of the NHTSA bureaucracy was working assiduously to require airbags. In unrelated news, the other half of NHTSA was working to demand that the use of these airbags would be optional. For under a thousand sales per year in the US, the good people at Land Rover decided that NHTSA wouldn't push them around. By the end of the year, the company pulled the D90 from the US market. If you've driven yours hard since then, the price would have stayed about flat in the intervening years for a depreciation of zero. Driven lightly, it would be worth somewhere north of $50,000. Low mileage models now go for $75-80,000.

    But after fifteen years of teeth rattling fun in the D90, where could you find the next similar opportunity? Well, to find the next auto arb, I searched the NHTSA site. I was not looking for the best data, but the worst. I was in search of bureaucratic quibbling most likely to drive an import to give up and stunt the available supply. Interestingly enough, the answer is another British import: the Aston Martin DB9. NHTSA has the vapors over 1.) the proximity of the windshield to the driver and 2.) the proximity of the engine to the hood, which is a problem if you hit a passenger and he bounces up in the air and lands on said hood. NHTSA wants a bit more cushioning to the blow and they appear unmoved by the disincentive that one would naturally have against performing this maneuver in this vehicle.

    510 BHP. 620 NM torque. Sprint time of 4.6 seconds. AM11 V12 engine. The most powerful DB9 ever produced.

    I continue my search for additional candidates, but for now, my favorite prospect for regulatory-driven supply constraint: the Aston Martin DB9. Drive it for free for the next fifteen years.

    If you want to learn more about Land Rovers, I would think about reading Land Rover: 60 Years of the 4x4 Workhorse. If Aston Martins are more your style, think about Aston Martin: Power, Beauty and Soul.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital, a partnership that invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our partners, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.

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Comments (11)
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  • Chris DeMuth Jr.
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    Author’s reply » If you want to snap up a brand-new, old-school Land Rover Defender, you’ll have to move fast as production stops in December: http://bit.ly/1z0ruEx
    9 Feb 2015, 09:04 AM Reply Like
  • bazooooka
    , contributor
    Comments (3662) | Send Message
     
    I once saw one of these old ones traded in for 10K. I would have offered the guy double but the dealership wouldn't let him have it back even if he paid them a quick 5k for a car that was his minutes before.
    9 Feb 2015, 05:11 PM Reply Like
  • bazooooka
    , contributor
    Comments (3662) | Send Message
     
    And for those who have older ones you might want to check your VIN.

     

    http://bit.ly/1Ah7ZgY
    12 Feb 2015, 08:49 PM Reply Like
  • United Value
    , contributor
    Comments (276) | Send Message
     
    I can't believe I hadn't seen this post prior to today. In a previous and more exciting life I lived in Bogota rebuilding Defender's and FJ40's for export to the US and for sale to Embassy employees. They are fantastic vehicles - though incredibly painful to import.
    1 Sep 2015, 12:09 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10208) | Send Message
     
    Author’s reply » ! Wait, what? Okay, forget all of this investing stuff. Bogota rebuilding Defenders and FJ40s? That is incredibly awesome. Okay, so, whatever time/interest that I spend on investing pales in comparison to Defenders/FJ40s, etc. In terms of importing inexpensively, I have tried everything but it is a real trick. I am always in the market and just love old trucks.
    1 Sep 2015, 12:13 PM Reply Like
  • United Value
    , contributor
    Comments (276) | Send Message
     
    You wouldn't believe the deals you can find on FJ's and Defenders - if you're willing to look miserably hard. Out in the country fincas you can find 45 year old FJ's with 20k original miles. Either the FARC bought these vehicles at some point and never drove them then got displaced from the area or individuals and plantation owners bought them for farm work. My wife is even more of a fan of these than I am. Her dream FJ is just getting finished and should* be here by Thanksgiving.
    1 Sep 2015, 12:30 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10208) | Send Message
     
    Author’s reply » That is great. I still have some barn space, so I am on the prowl.
    1 Sep 2015, 12:46 PM Reply Like
  • United Value
    , contributor
    Comments (276) | Send Message
     
    A bittersweet day today: http://tinyurl.com/zlt...
    29 Jan, 10:53 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10208) | Send Message
     
    Author’s reply » Sad. The new ones are soulless in comparison.
    29 Jan, 10:57 AM Reply Like
  • United Value
    , contributor
    Comments (276) | Send Message
     
    Agreed. My latest builds: http://tinyurl.com/jq7...

     

    The FJ literally cleared paperwork for shipping this morning. A good ending to a very messy vehicle.

     

    Thought you'd like the Rover
    29 Jan, 11:15 AM Reply Like
  • United Value
    , contributor
    Comments (276) | Send Message
     
    http://tinyurl.com/jq7...

     

    The previous link wasn't working for me.
    29 Jan, 11:19 AM Reply Like
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