Number plate valuation – does it mean anything?

If you’ve ever tried to sell a personal number plate, the first thing you needed to do is decide how much the number plate is worth.

So…..chances are you rang a few companies, and asked them to ‘value my number plate‘. Those number plate valuations may have been similar, or may have varied significantly. There are a number of reasons why number plate valuations may vary.

What does a number plate valuation really mean?

Does a personal number plate valuation mean that’s how much you’ll actually get for it? Well…maybe. But probably not. If you’ve approached a number plate dealer, the final amount you receive will depend on whether the valuation takes account of the dealer’s commission. But most likely, a potential buyer will make an offer – sometimes significantly lower than the asking price.

Is that all there is to it? Well no. You see, just because you receive a number plate valuation, that doesn’t guarantee that you will actually get that amount…. or that it will sell at all! It doesn’t mean that the valuation is wrong. Number plate valuations are based on similar number plates on the market, and the level of demand for that number plate. Many of the lower priced number plates (usually below £500) are much more difficult to sell. That’s because there are just so many number plates in this price range, that it really is a buyer’s market. At best, it may take some time to sell the number plate, even if you price it competitively against other number plates. It’s important to remember that, if there are a lot of similar personal number plates for sale, there may not be much of a demand for that particular combination of letters!

For instance, you may be selling what appears to be a good personal number plate like J2 OVR. However, at the time of writing this, there are over 400 prefix number plates where the last 3 letters are OVR…all under £500.

Sometimes, when DVLA fees are taken into account, it’s not worth keeping / retaining a personal number plate.

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Private registration number value increases overnight?

Well, maybe not quite overnight. But close enough.

And one of our clients nearly lost out.

Intrigued? The story’s pretty simple. In an earlier post I talked about some factors that affect number plate value:

” A number plate can also decrease in value if it relates to a particular theme, such as a specific car model. If that model is no longer made, demand gradually drops, and, consequently, so does the value of the registration number. “

Of course, the opposite of the above also applies. If a new model of a vehicle is introduced, any private registration number which might be suitable for that vehicle increases in value. And that’s what happened here.

To maintain some anonymity, I won’t reveal the whole registration number. But to give you an idea, the car registration number was X6 ###, where ### was an 3-letter abbreviation of a popular male name. You may be aware that the BMW X6 is to be introduced this year. Private registration numbers that contain existing BMW car model numbers (such as M3 and X5) already fetch higher prices than similar registration numbers. When X6 had no significance, there was no reason for X6 ### to be worth more than, say, Y6 ###. But with the new BMW X6 on the horizon that changes. Suddenly, X6 ### increases in value. If you know the X6 is coming…. and you understand a little about how the market in personalised number plates works.

Our client knew his registration number X6 ### had some value. What he didn’t know was the the BMW X6 was coming along, which would increase its value. So he was a little surprised when the salesman he had purchased his most recent BMW from called him (several times) and offered to purchase the registration number. His suspicions were aroused, so he told us the story and asked us to value the number plate for him. We were happy to enlighten him.

Of course the car salesman knew about the BMW X6. Tut tut Mr Salesman!

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Value of number plates going down?

Today I received a query from a client for whom we provided a number plate valuation. He was somewhat surprised that our valuation of his registration number was lower than the price he had paid some time earlier. And a little incredulous that it was possible.

I wouldn’t say that valuations will always be 100% correct. And it may be that there is a market out there for this private registration number, of which we are unaware. But it did prompt me to realise that there is a general expectation that all registration numbers will go up in value.

So can the value of a number plate go down? In a word, yes.

Like any investment, the value of a number plate can go down (as well as up of course!).

Why?

Firstly, that depends on how the registration number was originally purchased. If bought from a dealer, the purchase price is ‘inflated’ by the dealer’s commission fee, and possibly also VAT. When selling the number plate on, the VAT cannot be recovered. So the increase in value has to overcome both the initial dealer’s commission fee and VAT. So even if the registration number hasn’t dropped in value, it’s still possible that its owner may sell it for less than the original price paid.

Even when an unissued number plate is bought from the DVLA, it’s possible for the value to drop. The DVLA apply a ‘formula’ for valuing the majority of number plates for sale, regardless of the popularity of the specific letters. There are, of course some exceptions to this… particularly if the letter / number combinations create a recognisable name or word.

Registration numbers bought on the market, however, are valued individually, according to the market. So it’s possible for some (apparently similar) registration numbers to increase more than others. And for some to decrease. Less popular initials, such as X, Y, and F will not sell as easily as other letters. Where the letters combine with the year identifier to create a word or name, the value will be higher. The value will, of course, depend on the level of demand for that word or name. And how well the registration number creates it.

A number plate can also decrease in value if it relates to a particular theme, such as a specific car model. If that model is no longer made, demand gradually drops, and, consequently, so does the value of the registration number.

See my earlier post on investing in private number plates for more information.

The value of a number plate, like most things, is worth what a potential buyer is willing to pay for it.

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Selling a number plate – crazy commission fees?

Today I spoke to a client who had decided to sell her name number plate with us.

I know dealers’ commission fees on number plates can be high…. in the most extreme cases we know dealers charge fees of 50% of the advertised selling price. Until today. This lady’s registration number is advertised on a dealer’s site for £1450. Should it sell for the asking price, she will receive just £600! That’s a whopping fee of 59%! Ouch!

To make things worse…. she had also approached another dealer. The other dealer was selling the same registration number for just £475. A price that’s well below what the number plate is worth. So it doesn’t leave a lot once commission fees have been paid! This dealer had persuaded the owner that her number plate was worth very little. There are very few similar number plates available on the market at the moment… they’re all gone. So this one for £475 would be an absolute steal. So what’s the deal here? Why is it priced so low? I can only assume that, as a low priced number plate will sell quickly, the dealer can realise a commission much more quickly…. compromising on the size of the number plate commission itself.

We did an independent valuation of this registration number…and came up with a price of £1200. Selling the number plate privately (with no commission fees of course) will mean the owner keeps all of the achieved selling price. And the buyer pays a more sensible price too. And the dealer gets zero…. sounds good to me.

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Choosing number plates for investment

Do all private number plates go up in value? And if they do, does that mean that all number plates are a good investment?

The truth is that not all number plates are an investment. If you want to buy a number plate with investment in mind, here are 5 tips to help you along your way…..

1. Choose carefully. Buy the best ‘quality’ registration number you can afford.
2. Consider who might want to buy your number plate. Choose one that will appeal to the widest possible audience.
3. Compare prices with other number plates similar to the one you are considering investing in.
4. Your number plate may drop in value initially, particularly if you bought from a dealer.
5. Allow for DVLA fees, which apply when transferring or renewing your registration number.

Number plates are not suited to everyone’s investment portfolio. So you need to be sure it’s right for you!

Read more about investing in number plates….

 

Selling number plates needs patience….

Selling a number plate is not like selling a car. It can take months, if not years, to sell a registration number.

Why? I hear you ask. The answer is simple. Each registration is unique. And that means it has a different significance to each individual that looks at it.

Ask someone if they had a personal number plate, what would they have? Most would express a desire for their first name or surname. But good name number plates are in high demand, which pushes prices up into £10,000’s. A more affordable alternative is an individual’s initials.

Good number plates under around £2,000 can sell relatively quickly. If your number plate is in a high price bracket, be prepared to sit it out as there will be fewer buyers with the budget to spend on a registration number.

But what’s a good number plate? It comes down to desirability. And what else is on the market. Let’s take initials. Some initials are more common than others. For instance JMH is more common that JHM. Consequently, there are very few good prefix number plates on the market with the letters JMH. But lots more with JHM. So it’s likely that JMH number plates will sell more quickly, and for a higher price.

It takes an average of 9-12 months to sell a number plate. And even then, this can vary significantly. If a set of initials is common and there are only a few on the market, then a good number plate with those letters can sell within days if priced sensibly. It all depends on who’s looking! There are 3 main factors that affect the time taken to sell a number plate:

• Competition. How many similar number plates are there?
• Demand: How common are those initials?
• Price: What price bracket does the number plate fall into?

It can take many months (or more) to sell a number plate. If there are lots of similar number plates for sale, or if the number plate is many £1000’s, it can take longer! Some registration numbers take a few years to sell.

So…. selling a number plate requires patience. Often, lots of it.

 

Why are number plates so expensive….?

The obvious answer is supply and demand…… isn’t it? After all, there only a few combinations of letters and numbers to make a MARK number plate (or whatever other name you’re aiming for). And how many Mark’s do you know that would love to have their name on a personal number plate?

But is it really that simple? I’d say not. It’s true that high demand and short supply of any product will push up the price. And personal number plates are no exception. So the best registration numbers wil always be the reserve of those with the deepest pockets. But that’s not the whole story.

You see, there’s the small matter of the dealer’s commission. Commission on the sale of number plates can be as much as 50% of the advertised price. And there can often be more than one dealer in the chain between the buyer and seller.

The result? Artificially inflated number plate prices. And who pays? Everyone. Buyer and seller alike. The buyer is paying one or more dealers’ commission fees, and the seller gets a ‘trade’ price for the number plate sold. And that’s the way it’s been for more than 2 decades.

The only way to avoid this situation is to sell a number plate privately. But that’s difficult and expensive. A single insertion in a national magazine or newspaper can cost up to £50. Online, there’s the auction format. Online auctions don’t suit number plates as the search options are too generic, making it difficult to find a specific number plate.

A website for advertising number plates privately is the best solution. The Plate Market offers commission-free online advertising just for number plates.

 

What’s the big deal about selling number plates?

Sell a number plate through a dealer, and feel the sting. It may seem like a good deal, with no upfront costs. But number plate dealers charge big commission fees, which can add up to £1000’s. And the buyer pays a price too.

How come? Dealers provide a seller with a number plate valuation. Valuations may vary from one dealer to another. A price is agreed between the seller and the selected dealer. The dealer then adds a (hefty) commission fee, and advertises the registration for sale (usually on their website). This is what’s called selling a number plate ‘on commission’, the dealer simply acting as a ‘broker’. So what’s wrong with that? Not a lot. After all, it applies to a lot of industries. The difference here is that there is no good alternative if someone wants to sell a number plate privately and avoid the hefty fees.

A dealer’s commission can be up to half of the retail selling price of the registration number. For example, a number plate sold by a dealer at around £995 could leave the seller with a settlement of just £500. So the seller gets a low ‘trade’ price, and the buyer pays an inflated dealer price.
Naturally, selling registration numbers privately will yield a better price. A one-off ad in a magazine or national newspaper, however, is an expensive option at £35-£50 per insertion. Some publications are regional and only around for a few days. Repeated insertions soon adds up.

Online advertising is best suited to selling number plates. So what’s the answer? A website that specialises in selling number plates for private sale. And no commission fees. Just a simple advertising fee. The Plate Market offers just that.

About The Plate Market

www.theplatemarket.com offers online advertising for number plates. There are no commission or set-up fees. All number plates are advertised on the site, with full speacialised number plates searching.. Selling number plates on the site is simple and effective. Extra options like full-page feature articles really promote individual number plates.

More information on selling number plates…