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OK, so the more obscure an alternative asset is, the more curious I become.

I’ve always known (though never thought about it too deeply) that a car's number plate can sometimes be worth more than the car itself, especially as the car loses value over time.

Private or vanity plates - those personalized number plates - can be customized with different letters and numbers to create phrases, initials, names, or even words. You can even get them tinted.

But can investing in a vanity plate actually make it more valuable as the years go by.

Let’s find out more and dive into the (niche) world of license plates investing.

‍I'll cover:

• Why are rare license plates valuable?
• The market and the numbers
• Buying a fresh Number Plates? How to Choose Wisely
• How to buy a rare license plate
• Major risks involved in rare license plate investing

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Why are rare license plates valuable?

So, you might be wondering, what's the big deal with private and rare plates anyway?

First, it's important to understand that the value isn’t just in the plate itself (though the craftsmanship is top-notch).

The real value lies in the right to publicly display the plate.

Imagine driving through town with a license plate that simply says "1." Seriously? Quite, at least for some, the power move.

Now, these are different from “vanity plates.” Sure, vanity plates can be fun. But in the end, they’re not that valuable. You can get one for $125 and a bit of paperwork.

Heritage plates, on the other hand, are a whole different league. They’re an instant status symbol. Nobody else has them, and they’re incredibly hard to come by. Even the super-rich can’t just walk in and buy one.

For car collectors, they’re the “crown jewel” (often worth more than the cars themselves) and the ultimate bragging right for anyone fortunate enough to own one.

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The Numbers...

The Vehicle License Plate Market was valued at US$ 545 Million in 2023, and is projected to reach US$ 622 Million by 2031, growing at a CAGR of 2.7% during the forecast period 2024-2031.

Some license plates fetch millions!

A Southern California man is testing the market by listing his custom "CASH" license plate for, wait for it…$2 million.

Claude Arthur Stuart Hamrick, an 83-year-old retired patent lawyer, is putting his vanity plate up for sale after holding onto it since 1970. The listing, available on PlateBroker.com, represents a more moderate price in the increasingly lucrative world of collectible license plates.

And consider this: England’s “F1” vanity plate is currently on the market for $20 million by a private seller. At the top of the range, California's "MM" license plate recently changed hands for an astonishing $24.3 million. These rare, two-character plates are especially coveted among collectors in the vanity license plate market.

Buying a fresh Number Plates? How to Choose Wisely

To make a profitable investment in number plates, people tend to focus on combinations with broad appeal. Popular choices include dateless plates with few digits (e.g., 1 AB), plates that spell out common names (e.g., D4VE), and those that create recognizable words (e.g., F4ST). Steer clear of plates that require illegal alterations, like changing fonts or spacing, as these can diminish their value.

Ideally your investment should resonate with what potential buyers find attractive. Plates that form popular names or words are generally safer bets than those with highly personalized or niche combinations.

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How to buy a rare license plate

So, like everything, don’t just rush into it. Here’s a few steps to get you started:

Research and Identify Reputable Sellers

Look for established sellers that specialize in rare and vintage license plates. Some reputable options include:

• ShopLicensePlates.com: Offers a wide variety of rare, vintage, and collectible license plates from all 50 US states.
• Tag Shack: Provides authentic, pre-issued license plates from across the USA.
• eBay: Features many vintage and rare American license plates from individual sellers

Determine Your Specific Needs

Consider what type of rare license plate you're looking for:

• Vintage plates: From specific years or decades
• State-specific plates: Rare designs from particular states
• Special issue plates: Such as military, firefighter, or other limited editions
• Vanity plates: Unique personalized plates

Evaluate Quality and Authenticity

When buying rare license plates:

• Ensure the seller provides clear photos and detailed descriptions of the plate's condition.
• Look for sellers who guarantee authenticity and offer the exact plate pictured.
• Check for any signs of restoration or reproduction, as these may affect value and collectibility.

Compare Prices and Options

Rare license plate prices can vary widely based on age, condition, and rarity. Compare prices across multiple sellers to ensure you're getting a fair deal.

Payment and Shipping

Choose sellers that offer secure payment options and reliable shipping methods. Many reputable sellers provide flat-rate shipping and parcel tracking.

Consider Buying Services

Some sellers, like ShopLicensePlates.com, also purchase rare plates. If you have valuable plates to sell, this could be an opportunity to trade or offset costs

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🚨 Risks involved in rare license plate investing

1. Fluctuating values: Like any investment, the value of number plates can go up and down.
2. Long-term investment: Making a profit from number plates often requires holding them for several years. Buying an exclusive license plate is unlikely to make you money overnight. In fact, it could take a few years to gain profit.
3. Limited buyer pool: Very personalized plates (like those with specific initials) may have a smaller pool of potential buyers if you try to resell.
4. Theft risk: While not necessarily higher than regular plates, there is still some risk of theft, especially for valuable plates. Some companies offer anti-theft plate technology to mitigate this.
5. Market saturation: With the growing popularity of personalized plates, there's increased competition from other investors entering the market - which is why rare plates is seen as the more lucrative avenue to take

Resources 📕

• A few ideas from the Reddit community of vanity plate name ideas that could be worth some $ in the future
• Funny (but also probably very valuable) license plates
• A great breakdown on how your (or perhaps a relatives, friend) old license could be worth a lot

So whether you’re a big car fan or not, I hope this alternative asset idea stirred up some thoughts!

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Jason

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DISCLAIMER: None of this is financial advice. Finbrain is strictly for educational purposes.

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