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I have heard that it's bad for the car if one parks it on a grass surface regularly. It is said that the moisture released by the grass would eventually cause rusting in the undercarriage of the car. This makes sense, I think.

But how about if the surface is completely covered by wood mulch? I am asking because I want to cover my grass lawn in my fenced-in backyard with wood mulch, so that I can park my car there regularly. I have heard other people doing it. Also, in my research on gardening sites, it is said that a surface covered by wood mulch reduce evaporation from the surface significantly because the wood mulch retains moistures. If this is true, then it would mean that parking on a mulch covered lawn wouldn't exacerbate rusting in the undercarriage of the car.

Anyone has any real world experience or other insights on this?

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In a word, No. Wood mulch will not cause you any issues. Also, I don't think you really understand why grass is an issue. It isn't being parked on grass which is the problem, it's allowing the grass to grow up under your car and into your undercarriage. The grass which is touching your car is where the moisture is coming from and causes the issue. You will never have that problem with wood mulch unless all of your tires are flat or you lay it out on air bags (drop frame onto the wood mulch).

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I have to say that the idea that parking on grass causes rust sounds like an urban myth. Or in this case, a suburban myth.

For the facts, pay attention to whatever the car manufacturers recommend. The manufacturers have a vested interest in making cars that won't have warranty claims, because warranty work eats into their profits. So they build cars that usually last at least through the warranty period and they add warnings to the car's manual to minimize driver behavior that can lead to warranty claims.

I've seen all kinds or warnings and recommendations in new car manuals. Things like maintenance periods, rinsing the underbody after winter driving in areas that use salt on the roads, not parking under trees that leak sap or bird droppings, the best way to wash your car, not parking in tall grass due to the risk of setting the grass on fire, avoiding jackrabbit starts, etc.

But I've never seen warnings about parking on grass for humidity reasons, and definitely nothing about mulch.

Humidity can't get any higher than 100%, and there are many places in the world where humidity reaches that level frequently. But cars can take it. Parking over grass or damp mulch won't promote rust any more than parking in any humid environment.

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