Hammer Time, Beijing Edition: Need a License? Go To Court

Bertel Schmitt
by Bertel Schmitt
hammer time beijing edition need a license go to court

We have documented extensively how Beijing’s license plate lottery mucked-up the car market of China’s capital. Now, Beijingers found a creative way to get their sought-after license play without bothering Lady Luck: They go to court.

A shortcut to the desired license plate leads through a court auction. “Vehicles seized by the court are not included in the new regulation policy, which is why the auctions have become much more popular,” judge Tong Fei told China Daily. Cars fetch obscene prices at these auctions. “A Volkswagen Santana worth about 20,000 yuan ($3080) went for 60,000 yuan ($9,240) in a recent auction,” said the judge

And now it gets interesting: As the holder of a licensed car, you can go out and trade it in for, say, a Mercedes S Class without having to go through the license lottery. On the other hand, the poor guy who lost his car because he fell short on his payments gets punished hard: “If their impounded car is sold they will have no option but to take part in the city’s lottery to get a new license,” says the judge.

In the olden days, the beginning bid on a court auction car was 8o percent of its Red (?) Book value. If it didn’t sell, it became cheaper the next time around. Now, all cars at auction sell right away, at higly elevated prices.

Says CarNewsChina: ”It is yet unsure whether the Beijing government will close this loophole. They did close all other loopholes that were found earlier so it is likely just a matter of time before the good days at court are over.”

Join the conversation
  • Cmoibenlepro Cmoibenlepro on May 05, 2011

    Government makes money from these auctions? No way they will close this loophole.

  • Eldard Eldard on May 05, 2011

    I love demand-based systems!

  • Wsn Wsn on May 05, 2011

    When the policy itself is a "loop-hole" (to a fair legal system), there will always be other loop-holes associated with it. There is no way of closing them all, without abolishing this policy.