Delaware Tag No. 6 goes for $675,000

As I discussed before, these low digit black tags, while nifty, are not really that great an investment for most Delawareans. Granted, the bulk of these people have held onto tags for thirty or forty years, and, much like a house, they have appreciated in value. But other than for the vanity of the vanity plate, how much are you really making on this "investment?"

As pointed out in the article in today's paper, Tag #6 sold for a whopping $675,000. (By comparison of apples to oranges, the No. 1 tag in UAE sold for $14 million). Here's one way to look at this investment, other than potentially being the envy of a very select group of people.

The auction commission for these types of things varies between the ebay cost of approximately 5% to the Wilson auction cost of about 20%. If this tag had sold on ebay, the fees would have been approximately $35,500. At a 20% rate, the fee would have been $135,000. I'm sure the auctioneers of this auction took a commission somewhere in the middle. So, for my argument's sake, let's say if you sold your plate at auction, it would cost you about 10% in commissions based on final sale price.

Even at a conservative 2% interest rate, compounded quarterly, your $675,000 investment would appreciate to about $825,000 over 10 years. Invested in long term safe investments yielding 5% gives you around $1.1 million. The question is really whether you can get that much for the same plate years from now. Maybe. But the ceiling to these auctions isn't at the UAE's ridiculously high selling point. It's probably not that much higher than this conservative interest calculation. Plus, after you sell it, you've got to deal with the commissions. If you only got $825,000 for it, you're only pulling in $742,500 after a 10% commission, which turns out to be a pretty lousy investment. Just to get to the net of $825,000, the plate would have to sell around $915,000. Is that really realistic? I can't imagine that is the case absent some sort of crazy inflation over the next decade.

Of course, if you have this kind of money in disposable income, what is the point?

Tags: delaware black tag, delaware tag 6 sold at auction

Nothing says I am better than you than driving with a single digit tag

I have previously mentioned the allure of the black tag in Delaware. As most Delawareans are aware, the lower the number, the better you are. Tag 1 is for the governor, tag 2 is for the lieutenant governor, tag 3 is for the secretary of state, and the rest are available to the private sector. If your tag number is above 87,000, however, there is an additional inferiority tax imposed by the DMV when you register your vehicle. That's one of the main reasons why people love the black tag. That and it allows you to travel twenty miles over the speed limit without fear of being pulled over.

All license plate numbers, of course, are controlled by the DMV. Only certain numbers (those less than 87,000) are available for the vintage black tag. As has been pointed out to me through comments to my earlier post, only one company is authorized to make the actual legal black tag. There are plenty of fake black tags around that may subject the driver to high crimes and misdemeanors for trying to fake their way into the upper class of driving society. I myself was recently busted for driving with a fake 4-digit tag. When I bought it (also from auction, for nearly six figures) I failed to notice several things that in hindsight, were a dead giveaway:



Notwithstanding this slight snafu, I have a chance to redeem myself because tag #6 is up for auction. Like the rest of the bidders, I must post $50,000 in cash or a cashiers check to show that I am serious. No problem. There isn't anything better I can spend my money on. Apparently tag #9 sold a few years back for $186,500. This one is projected to sell for between $500-750,000. One quote in the paper was from a Smyrna resident that said that "there are a lot of people out there with much more money than they have sense." Well, whoever said high social status was cheap? I will bring an extra $100k just to be sure that I win. After all, I just found out that I inherited millions of dollars from an unknown relative in Africa, so this is chump change.

So, if you're in it to win it and think you can outbid me, No. 6 goes on sale at 2 PM on Feb. 17 at the Rehoboth Beach Civic Center. Remember, nothing in Delaware says I am better than you like a low digit license plate. And this one is about as close as you can come to saying I am the best without doing any sort of public service.

With investments like this, who needs gold or other precious medals or even stocks with a steady rate of return? The greatest thing about the black tag, besides the fact that it doesn't pay dividends taxable by the IRS, is that you aren't even taxed on it until you sell it, and even then, it would only hurt you if you sell it for a gain. Without hyperbole, this tag is undoubtedly the greatest investment one can make as a Delawarean.

Of course, I've also heard rumors of other wealthy individuals who would rather spend their money on a giant five-story statue of a Frankenstein-type rock holding a car. I'll write about Dover Downs' plans for Miles the Monster and the six-story statue that I plan on erecting to compete with it later in the week.

Tags: delaware license plates, low digit delaware tags, tag 6 up for auction in delaware, delaware black tags