Cost of Shanghai License Plate Soars to $9,700

The average price for a permanent license plate for a passenger vehicle in Shanghai reached a record 61,600 yuan ($9,700) at an auction on Saturday, up 5% from a month ago.

Chinese cities are limiting the issuance of new plates to ease traffic congestion, thus pushing prices higher.

Car owners who don't obtain Shanghai plates often try to license their vehicle in a nearby municipality, according to Chinese news reports.

The high cost of a Shanghai plate is dampening sales there of lower-priced cars, whose buyers can't afford the auction price, according to analysts. They say some more affluent buyers are trading down from luxury models to mid-priced vehicles so they can afford to buy a plate.