Brokers active in private car registrations are the main reason that the price of license plates for private cars has hit a record high in the municipality, industry insiders said.

Both the lowest and the average transaction costs - 58,300 yuan ($9,221) and 58,625 yuan - in auction results released on Saturday were the highest since Shanghai launched auctions without a reserve price for private car license plates in 2000.

In February, after the cost exceeded 50,000 yuan for four successive months, the price was widely expected to decline.

"The auction system was revised this month to prevent brokers from offering for their clients a feasible lower price based on their software's calculations. It's understandable that car owners increased their bids to win without brokers' help," said Zhou Wenchao, a sales consultant at a car dealer in the municipality.

In addition, a large number of secondhand license plates are in the hands of brokers, who know perfectly well that the auction price will rise this month because of the revised system, Zhou said.

"Car owners are better off bidding a high price in the auction than buying a license plate from the brokers, who charge around 63,000 yuan for one now," he added.

Insiders speculated that the high price will not fall within the next few months.

"The number of people bidding has consistently been close to 25,000 in the past three months, which shows a big market demand for license plates," said Ji Wenjun, a sales director of Shanghai Yongda Group, a car dealer.Shanghai residents cannot buy Jiangsu and Zhejiang province license plates without having IDs for these provinces. "So they just have to bite the bullet and pay for a Shanghai plate," he said.

Residents say the price of a license plate has risen above that of a car.

A man surnamed Shi offered 58,100 yuan on Saturday and was outbid.

"How many of those who use Shanghai license plates are actually Shanghai residents? We are paying for the brokers. Why not get them under control?" Shi asked.

"Prohibiting the transfer and trade of license plates is a direct way to control the broker market," said Liu Chunzhang, a business and management lecturer at Donghua University. "But the devaluation of license plates will greatly reduce revenue. That might be the government's concern."

The reason for beginning the auction was to regulate the number of cars on the road and ease traffic pressure. "However, regardless of the price of a plate, the number of new private cars on the road is still rising at the pace of 8,000 a month," Liu continued.

Some people question the government's claim that the billions of yuan raised by the auction every year go to road construction.

The government should make better use of the money to plan urban transport and provide a comfortable traffic environment, said Li Jianyu, director of Shanghai Haojia Law Firm.

Although some residents oppose auctioning license plates for private cars, Li said it is a fair method. "Otherwise, corruption will be encouraged," he said.

zhouwenting@chinadaily.com.cn