Why Number Plates Are So Desirable
Number plates are big business and a vanity purchase for those who have the cash to spare and then some more.
Dubai's Roads and Transport Authority's (RTA) Licensing Agency has been conducting auctions of special number plates in the past decade. In fact, the RTA collected a staggering Dh141.158m in its last three public biddings alone.
Owning a special plate number for ordinary motorists is a dream and bidding for a vanity plate that costs multi-million dirhams is unimaginable for most of us. But a lucky few have the means and luck to snatch the prized catch.
The most expensive number plate till date is still the No 1 plate in Abu Dhabi, purchased by prominent Emirati businessman Saeed Abdul Ghafar Al Khouri, for a record-breaking Dh52.2m in 2008, at an auction at the Emirates Palace. Prior to that, the record was held by Talal Ali Mohammad Khouri who bought No 5 for Dh25.2m in 2007.
In October last year, Indian businessman and property developer Balwinder Sahni fought tooth and nail to outspend other bidders to grab RTA's single digit plate D5, for a whopping Dh33m. While in Sharjah, the most expensive vehicle licence is the No 1 plate, bagged by Emirati businessman Arif Al Zarouni for Dh18 million.
Staggering though the price tags may be, buyers of vanity plates have a common denominator in making such expensive and mind-boggling purchases: "Passion and money spent for a greater cause."
Sultan Al Marzouqi, director of Vehicle Licensing at RTA, put it succinctly: "Auctions help generate revenue for RTA's never ending infrastructure projects."
He also told Khaleej Times: "Lots of people buy those numbers for trading or investment purposes, or they are regarded as a statement of individuality - of being unique and special."
The RTA conducted its first hall auction in 2007 and the e-auction in 2010. The live auction takes places every alternate month and the online plate auctions are also held bi-monthly.
The Dubai government authority also sells distinguished number plates for fixed prices but the auctions help set the price higher. The bidding war simply triggers strong competition among special number plate enthusiasts.
"During the hall auctions, competition rises between the bidders for the most unique plate numbers; therefore, demand for those numbers jack up the prices," Al Marzouqi said.
The RTA decides the numbers to be rolled out, depending on customers' requirements and preferences, he added. The most popular numbers are usually 786, 911, 458, and four-digit numbers, mostly year-based ones like 2020, currently popular because of the upcoming Expo 2020.
Buyers also have a variety of reasons to go for a special number plate. Some cite lucky numbers - like Sahni who is very partial to 9 (he bought D5 because D+5 adds up to 9). He also spent Dh25m to grab the O9 plate in a 2015 auction.
So far, he has collected around 15 vanity plates - worth about Dh100m in total - and his passion for collecting special numbers is only growing.
Investment on plates
Spending money on fancy number plates is also a good investment, said an Emirati entrepreneur who spent over Dh3.08 million to purchase his favourite number at the RTA's 94th auction early this month. "It is a good investment I am making and I advise others too to put their money in unique number plates," Waleed Abdul Khader told Khaleej Times, after parting with Dh3.08m to buy the special number O18. "Investing in number plates is part of my business and I have full confidence in the potential value appreciation. I have seen the value of number plates multiply several times over years," he added.
Khader said a number plate which was bought for Dh2m about seven years ago is worth Dh30m now. RTA's Al Marzouqi explained: "Such intense participation in various live and online auctions is indicative of the importance of these auctions in bringing happiness and added satisfaction to our customers."
But on some occasions, buyers found the starting bid for a special plate to be too expensive. The Q2 Dubai plate that started at Dh33m was left unsold at the 93rd auction in December last year. "It was very pricey," Nawaf Al Falasi, founder of Top Service company in Dubai, said. "If it was starting at Dh10 million or even Dh20 million, we would have made a bid."
The UK in particular has a relationship with personalised number plates. According to estimates by the DVLA (Driver and Vehicle Licensing Agency), the UK reported an excess of two billion pounds in tax revenue from tax auctions over the past 25 years. As they are keen to state, an expression of interest in a particular plate by three people or more is enough to push the price of that Reg plate through the roof. It has also been documented that the buyers let their hearts take control of their heads when they bid for these plates.
Personalised number plate auctions are constantly rewriting the record books with regard to the highest price paid for a plate. The record currently stands at £518,000 which is quite impressive. The prices of these Regplates does not seem to be slowing down either.
Of particular interest is the recent auction of the highly-hyped 250 C Reg plate which sold for £21,500. This is a clear indication that the expectations for the prices of personalised number plates will continue to increase.
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