The numbers game: Making money from the UAE’s license plate trade
Businesses sprang up just to sell these plates, with weekly listings in various classifieds around the country
Think of the UAE, and your mind may drift to a number of ‘biggest and bests’ that headlines frequently boast.
The race to have the world’s tallest buildings. The creation of man-made islands out in the sea, even with no shortage of land onshore. And regular auctions for fancy car number-plates that run into millions of dollars.
Like many so-called enlightened people, even I used to think that expensive number-plates were a waste of money. Anything more than the $10 for a regular licence plate appeared to be an exercise in vanity and privilege.
Vanity plates are a common phenomenon in the United States and other Western countries, so to single out the UAE only would be an unfair double-standard. The only difference is that the fancy plates there cost a fair bit less than over here, and open to a number of customisation options with a combination of letters and numbers to spell out words or names.
In the UAE, we are limited to just five numbers or less, with a single-letter code in front of it. We cannot even choose what exact numbers we want, so it comes down to what numbers are made available by the transport authority here.
The vanity bit comes in the form of how few numbers you have on the plate, or what pattern the numbers are in. So you have to attend professional auctions to bid on the available plates, for numbers such as “H 33” or “C 8008,” with prices running anywhere from $2000 to well into the millions. The transport authority has openly stated that they raise good money with the sale of these “special plates,” as they call them.
But then a secondary market emerged. These number plates were being resold for more than they were purchased at auction for. In essence, it started to become a commodity, similar to the ridiculous amounts people pay for art by dead painters, just to hold as investments.
In fact, businesses sprang up just to sell these plates, with weekly listings in various classifieds around the country. That’s when the reality of the investment potential hit us.
Eventually, the transport authority set up an online portal to buy some of the more “entry-level” special plates at fixed prices without having to take part in a live auction, using just a credit card. I dipped my toe in this pool and bought a “96688” plate for about $500. In a week, I got a certificate in the mail saying I now owned this number permanently, just like any other asset.
I later noticed in the classifieds that number-plates similar to mine were going for twice as much on the secondary market. That’s when I went ahead and bought three more of the same number, but with different letter codes, over the course of three years. You have to wait for the transport authority to release the numbers, and then you have to snatch your favourite ones up before the speculators do, so it is a bit of a game.
Now, aside from not having an issue remembering the registration numbers on all four of my cars, I am content in the fact that I can sell my plates later for twice as much at any time. While I’m not getting into the number-plate investment business any time soon, this is one “fee” where I am coming out ahead.