Determining the right price for a product can be one of the trickiest aspects of business. After all, not everyone calculates value in the same way. Where one person sees trash, another person could see treasure. Take an item that could be considered the most boring part of a car: the license plate. To most Americans, this piece of metal amounts to little more than the legal ID for their vehicle. If you happen to live in Delaware, however, the right license plate can be worth a small fortune.
With fewer than one million residents, the state of Delaware has never needed to include letters on its license plates. So over the years, some citizens have become obsessed with obtaining the lowest number possible for their vehicle’s tags. According to state Transportation Secretary Jennifer Cohan, having a low-numbered license plate could mean that a driver has deep roots in Delaware. In fact, many residents pass their tags down through the generations. “It’s a real part of who we are,” said Cohan. “We’ve got some loyalty to some strange things, and license plates is one of them.”
Still, vehicle tags with only a few digits stand for more than just state pride. They’re also status symbols that put a driver’s wealth on full display. For instance, at a recent auction a retired dentist spent nearly $420,000 on a 2003 Mercedes station wagon. Although the car cost only $6,800, its number 20 license plate required $410,000 to purchase. What’s more, that isn’t even the highest price that a low-numbered tag has fetched at auction. In 2008, a real estate developer spent a whopping $675,000 for Delaware’s number 6 plate. “When you’re driving anywhere in the state and you’re behind a low number, you notice,” said Jordan Irazabal, who takes pictures of Delaware tag numbers below 1,000. Of course, not everybody sees the worth of low license plate numbers. During a 2007 bankruptcy case that valued a two-digit Delaware tag at $200,000, a judge declared that “it is mystifying that it has that value.”
- Why do some Delaware residents place such high value on low license plate numbers?
- What sort of factors must entrepreneurs consider when they are pricing a good or service?