This week we’ll talk about number plates. Not very exciting you tell me, but just wait. In most countries and for most of us, getting a number on your car is a pure formality. For some and in some countries, it’s possible to get your personalized number plate at low or even no cost. And then there’s Switzerland. Here, number plates are personal and follow you rather than the car. This is not unique in itself. What is however, is the way you get a personalized number – and how much it costs. You see, Swiss car owners’ willingness to pay a small fortune for a specific car number puts millions in the local cantons’ deep pockets – every year.
A canton is a Swiss region, comparable to a US or German state. Being a federation, Switzerland is split into 26 of them, with Zurich being not the largest, but with around 1.5m inhabitants the most populous. Registration plates indicate which canton the car comes from with two letters (“ZH” for Zurich, “GE” for Geneva etc.), and then any number between one and six digits. Given number plates are personal you will have guessed that those which have been in circulation long have few digits. This is of course also the case in smaller cantons. In Zurich on the other hand we will soon see the first seven-digit registration plate. That will of course be the number “ZH 1 000 000”, which you could imagine someone being willing to pay a few bucks for. That’s what the cantons have realized as well, in the case of Zurich as long as 30 years ago.
Cantons therefore regularly organize auctions for especially interesting number plates. Using Zurich as example, it’s here done on a weekly basis. Numbers which are auctioned are either interesting numbers that have been handed in because someone has died or otherwise stopped driving, but also numbers that have been picked out of the regular series. Anyone can register and take part in the auctions, but no information is given out beforehand on the numbers that will be auctioned, and all auction proceeds flow into the canton’s budget. In the case of Zurich as a large canton, this is the not so trivial amount of around CHF 4m (USD 4m) each year.
Against this background and in a country with a lot of money, it’s easy to imagine that a certain craziness has developed around this. You see, in Zurich having two (very rare), three or four digits in your number plate signals prestige, around some logic of old money. And then it’s of course true that having a number such as the one on the picture below is quite cool. It’s just that most of us would probably put the value of this at a few hundred bucks. Not in Zurich.
Three years ago in 2018, the number plate “ZH 987” was auctioned away for CHF 150.000. Yep, you read that right. Before that, the record had been set by “ZH 1000” at CHF 130.000 back in 1998. These are obviously records, but every week the canton of Zurich auctions around 30 number plates where as a rule of thumb, not so spectacular four-digit plates fetch around CHF 8.000 and three-digit ones around CHF 20.000. It can be much more however, with for example “ZH 1313” being auctioned for a solid CHF 75.000. Even an average, five-digit plate will cost you around CHF 4.000. When “ZH 1 000 000” comes out, it’s by the way expected to set a new record.
The full craziness of the above doesn’t become apparent until you realize that there’s no secondary market once you have paid for your dream plate. It’s a sunk cost which therefore also doesn’t need to be declared as wealth in your tax filing, as there is no way of selling the number on (it is in some cantons, but not in Zurich). This is probably a very good thing as you could easily imagine this going completely bonkers if that was the case, but what it means is therefore that whoever paid CHF 150.000 for number plate “ZH 987” will never see that money again. Basically, he or she made a hefty lump sum tax payment and got a number plate in return.
I can produce a very long list of desirable cars for a budget of CHF 150.000, as I’m sure you can as well. Actually I could do the same for CHF 20.000 and thinking about it, my son’s newly bought Lupo GTI didn’t cost much more than CHF 4.000. All these scenarios feel vastly superior to large, lump sum tax payments yielding a specific number plate as only payback. Then again what do I know – I’m the type of person who still struggles to remember my own number plate, although I’ve now had it for 19 years. Obviously, that’s not the case for everyone…