I guess its plastic, because when i let it idle in the garage for a while, i can definitely smell it. But where would something like this even come from

 

Are you sure that's not paint burning off? Did you or someone else paint the exhaust? Looks to me like paint that can't hold up to the tempature of your exhaust.

 

I guess its possible someone painted. i just bought it, so I havnt had time to get underneath and take a look.
Is it typical that people just paint the whole underside black? Or if so, not take the exhaust off before hand? assuming thats what it is, paint

 

You ran over a plastic bag. It melted to the exhaust pipe. I've had it happen twice to me. Took about 2 months to burn it off completely (daily driving). I tried scrapping it off with a putty knife. WD40'ing it off. Lighter fluid (let the pipes cool first). It lessened it a bit. But ultimately, it just takes time for it to burn off.

 

lol @ plastic bag
sorry, laughed imagining black plastic bag ending up under the car and sticking

 

Yup, looks like yerbasic one of those tissue-plastic grocery store type bags... doesn't matter what color it started out life as, after a few minutes at 500° or whatever, it'll be black no matter what.