Personalised vanity car plates

There has been news that Singapore car owners might get to lay their hands on vanity car plates soon. Instead of the usual car plates like “SGP 100 A”, LTA is considering relaxing the guidelines on car plates to allow various permutations of alphabets and letters, up to a maximum 12 characters. The car plates are rumoured to sell at a fixed price rather than on a bidding system, which is the current system in place for Hong Kong.

Actually, a bidding system would be more equitable. It prevents squatters who could be profiteering the first-come-first-serve fixed price model by snapping up high demand car plates quickly and then resell them at a higher price, in the process making a profit. It also allows people who are eyeing the same car plate to fight it out. It will also be consistent with LTA’s current practice of having a bidding system for those who wish to bid on the 4-digit car number plates.

More importantly, a bidding system would generate more revenue for LTA, especially when they need to come up with innovative ideas to replace the 8% reduction in road tax collection for Budget 2007 (click here for more info). But why is LTA not inclined to opt for a bidding system?

Let's do some calculations here. Assuming that personalised car plates are offered at a flat rate of $1,000 per plate (current minimum amount for car registration number bidding), then for LTA to recoup the 8% road tax rebate, it would need to sell about 61,000 personalised car plates, which is about 50% of the total COE quota for next year – quite an impossible take-up rate.

If we assume only 5% of the new COE issued will be applying for a personalised car plate, each plate will be at a flat rate of about $10,000 – a very hefty fee! A bidding system would not likely to achieve this amount (unless the starting bid set quite high), which could probably explain why LTA is thinking of selling the personalised plates at a flat-fee rather than using the current bidding system!