Abandoned cars

Marginal Revolution points to an article on a Financial Times blog that discusses reports of car abandonment in Dubai, where the construction boom is ending. It reminds me of what has happened in Las Vegas, where there have been large auctions of construction equipment.

Update: There are people questioning the original report that there has been a large increase in car abandonment. The police say that only 11 cars have been abandoned at the airport in the last year, not 3000. Also, a reader leaves this comment in the marginalrevolution.com post:

About the abandoned cars in Dubai bit. there is a salient fact that is not mentioned. In 2008 the UAE government instituted a new law designed to get old cars off the road, whereby any car older than ten years cannot be re-registered by a new owner. That is, if you own an old car, you can continue to drive and register it, but a new owner cannot. Thus, cars over 10 years old suddently have a resale value of near zero - the only people you can sell them to are dealers who specialize in exporting them to places like Iraq or Uzbekistan.

So, if your stint in Dubai is up, and you have an older car (and a lot of the Indian and Pakistani expats did have cars this old), leaving it at the airport is the sensible thing to do, because going through the process of selling it for next to nothing and then renting a car for your last few days is a bigger PITA.

Update 2: The New York Times now has an article that says that conditions are deteriorating in Dubai.

No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai’s major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.