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Buying a Vehicle in Shanghai

In a bid to curb traffic jams and pollution, Shanghai has restricted the number of license plates it issues each year and has priced cars as a luxury item for the local population. Although imported luxury cars (Mercedes, BMW) are very expensive, General Motors and Volkswagen cars, which are made in Shanghai, are cheap when compared to Europe or the States.

Individuals and private companies in Shanghai are free to buy a car but have to go through an arduous procedure before driving off. In order to register a new car, you have to bid in an auction for a restricted number of licence plates. The "sealed bid" auctions have been held by the local government once a month since 1986, with the lofty goal of keeping the number of cars under control and curbing traffic congestion. About 5,000 licence plates are sold each month at prices averaging above ¥30,000. Bidders usually exceed the supply of number plates by a factor of two.

Another option, is the possibility of buying a used car in Shanghai. Some 142,000 used cars were sold in the city in 2004, according to the Shanghai Second Hand Car Association. Now there are some 900,000 cars on the streets of Shanghai, of which 300,000 are owned by individuals. This is possibly the easiest route and you should contact a local dealer for more information on the second hand availability of the type of vehicle you are interested in purchasing.

With the cost of top-of-the-line imported luxury cars in the $100,000 range, most expatriates drive General Motors or VW cars, both of whom have factories located in Shanghai. The popular MPVs cost in the $25,000 range, while VW has just come out with a two door passenger car in the $10,000 range.

While the true cost of a car is its depreciation, the second hand car market is very new in Shanghai (personal cars have only been a factor for a couple of years), and determining your car's depreciation is difficult.





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