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A new government policy to hold down the price of second-hand license plates will face challenges from scalpers and car owners who have already figured out how to circumvent the rules, experts told the Global Times Tuesday.
To control the number of cars on the road, the municipal government requires new car owners to bid for a new set of license plates at a monthly auction. Otherwise, they have to turn to the secondhand market, where they can pay another vehicle owner for his or her plates.
The municipal government implemented a regulation Saturday that capped the price that license plate owners can charge to transfer ownership of their plates, according to a report in the Shanghai Morning Post. The regulation stipulated that car owners couldn't charge a price that exceeded the average bid price at the most recent auction for new license plates.
The average bid price at the March auction on Saturday rose to an all-time high of 91,898 yuan ($14,791), an increase of 8,327 yuan over the previous month, the report said.
The problem with the new regulation is that the government has no way of knowing for sure how much a set of secondhand license plates actually sells for, according to Gao Shen, an automobile industry consultant.
It's true that the buyer and seller have to disclose the transaction price when they go to transfer the plate registration. But there is nothing stopping the buyer from handing over an amount of cash larger than what ends up written on the official paperwork, Gao said.
The price cap was one of four measures that the Shanghai Municipal Transport and Port Authority proposed in Protected content curb the skyrocketing price of license plates. The other measures included increasing the number of plates up for bid each month and prohibiting plate owners from transferring ownership of the license plates to another party for three years.
The municipal transportation authority is now considering other measures to keep license plate prices in check, including only allowing new car buyers to participate in the monthly license plate auction, according to the report.
Still, the measures do not address the root cause of the price increase - surging demand for cars, said Li Keping, a professor of traffic engineering at Tongji University. Li supports restricting the use of private cars through higher purchase fees and parking charges.