License plates can be more expensive than cars

Source: Bloomberg Businessweek

In China (and actually some other countries as well), license plates can be more expensive than cars. For example, Shanghai is one of four cities that limit car purchases by imposing quotas on registrations, and people obtain license plate through auctions.

The prices paid at Shanghai’s license auctions in recent months have jumped to $14,530 (90k yuan), and this number exceeds the cost of many Chinese made cars such as Chery, Geely and Great Wall. For instance, a Z100 minicar by Zotye Holding Group only costs nearly $4,000.

The result of this license plates’ price exaggeration is that middle-income people cannot register to use their cars even if they can afford to buy inexpensive cars. Local automakers also blamed the license plate auctions for weakening their sales. When Beijing  introduced a license plate lottery in January 2011, the combined share of Chinese brands sold there plunged by more than half, to 9.7 percent for the year.

I have witnessed the price exaggeration of license plates for scooters in Vietnam, although Vietnam doesn’t have a registration quota system. People in Vietnam love to have “magical numbers” on the plates: 6 means Prosperity, and 8 means blossom or increase. So the plates with a lot of 6 or 8 on them are extremely expensive. If you see plates with “8888” or “6868” on Vietnamese streets, you should assume that the owners of the cars/scooters must come from very wealthy and powerful families.

For more information, this is the article on Bloomberg Businessweek.

5 comments to License plates can be more expensive than cars

  • gradyb13

    Are license plates restricted so that the government can make money off of them, or is there some other reason that I can’t think of?

    • clara

      I don’t know why the Shanghai officials want to limit car purchases in the city. Probably because there have been too many cars there already?

  • 1. Various cities around the world seek to limit the number of cars. So of this is de facto, the expense of parking in Manhattan. Some is de jure – I think there’s a fee for bringing cars into the inner loop in London. Limiting license plates however may be merely an invitation for people to buy and register cars elsewhere.

    2. In Japan there are also some people who seek “lucky” plates. In the US most states now sell “vanity” plates where you can specify any combination not already taken, for a fee. I don’t know whether China charges an extra fee, or if these are traded afterward.

  • tyler

    An intersting take on vanity plates is something the state of Texas did last year. They auction off popular vanity plates just like the “lucky” plats of Vietnam and Japan. Interestingly, I believe that “Ferrari” or something of that nature sold for $15,000! I see no problem with auctioning off these vanity plates for funds however.

  • cookg15

    It seems like this could lead to some undesired negative results for Shanghai. I would expect a relatively significant number of drivers who can afford a car but not registration to decide that they will drive anyway. With the enormous quantity of people, I would expect that to be difficult to regulate, and would lead to things like hit-and-runs with unlicensed cars and no way to track them.

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