The Supercar Recession

WashingtonTimes.com

President Obama broke ground in Columbus, Ohio, last month on the 10,000th road project funded by the Democrats' massive $787 billion stimulus bill. The carefully choreographed event helped kick off the so-called "recovery summer," during which we are expected to believe that the administration's spending binge is curing our economic woes. It would have been more accurate to call this the double-dip summer.

Conspicuously absent from these newly repaved roads are the supercars that have been abandoned as hard-pressed consumers continue to ditch nonessential luxury goods in the face of the Great Recession. Vehicles that once were the stuff of boyhood dreams have seen their values tumble. Take the Lamborghini Gallardo, a favorite symbol of automotive excess, which currently retails for $198,000. Slightly used versions with fewer than 10,000 miles on the odometer can be had for less than $80,000. Some pretty sweet Aston Martins and Ferraris can be picked up for even less.

Even more modest sports cars like the Porsche 911 have taken a beating. Since the 1980s, the German marque has enjoyed some of the strongest resale values in the industry. Not any more. An analysis of used-car sales prices from the enthusiast magazine Excellence shows that beginning in 2009, the once-stable secondary market for the 911 experienced price drops of up to 20 percent. This reflects the desperation of owners forced to lower their asking price in order to replace their ride with ready cash to weather the economic storm.

Only the rarest machines have maintained their value. A limited-production Ford GT that retailed for $140,000 when new still commands the same or greater price five years later. Less exotic domestics have not fared so well, nor have new-car sales figures for any manufacturers now that the artificial sales bubble created by last year's "cash for clunkers" program has burst. According to Census Bureau figures released yesterday, fewer cars left the showroom floor in June than in May, marking the second consecutive month of decline. This reflects trends in the larger economy, where retail sales dipped 0.5 percent in June on top of a 1.1 percent drop in May, despite growth at the beginning of the year.

The disappointing numbers come as no surprise, considering the Obama administration's economic policy lexicon has only one word: spend. Even the most casual observers realize that when the bills come due, the administration will add another word to its policy arsenal: tax. Fear of the inevitable shift has forced the wealthy to abandon their supercars just as it has forced the less-well-heeled to hold back on the purchases that fuel the engine of our consumer-driven economy.

If you want to be king of the road, cash definitely is king these days. There are a lot of car bargains out there. The problem is, most would-be street racers are afraid to part with money as they wait for the other financial shoe to fall. As supercars go, so does the rest of the economy.