In Arizona, an automatic license plate recognition (ALPR) system has an estimated benefit-to-cost ratio of 9.6 due to improved vehicle registration and insurance compliance.

Estimated outcomes from the deployment of an electronic license plate system in the Phoenix, Arizona metropolitan area.

June 2008
Phoenix,Arizona,United States

Summary Information

An analysis conducted for the Arizona DOT (AzDOT ) estimated the potential of an electronic license plate system for improving compliance with vehicle registration and insurance regulations. The research estimated the costs of an electronic license plate system whose deployment is limited to the metropolitan area of Phoenix, and the system's benefits in terms of revenue generated to the AzDOT though increased registration and insurance compliance.


This research estimated the costs of deploying automatic license plate recognition (ALPR) technology that uses cameras and alphanumeric recognition software for reading license plates. The configuration of the ALPR was designed to capture the maximum number of vehicles using a minimal number of camera locations, and consisted of 15 camera sites installed over the highway segments that carried the largest amount of traffic in the Phoenix metropolitan area.

The research provided an estimate of ALPR benefits in terms of direct revenue from improved registration and insurance compliance. The methodology consisted of a series of calculations based on traffic counts and demographic data to determine the number of compliant and non-compliant vehicles identified by the ALPR and the revenue generated from increased registration fees as well as non-compliant ticketing (fines). It is assumed that 62.23 percent of Arizona's vehicles will be captured by the ALPR cameras.

  • Benefits from Improved Registration Compliance. Approximately 200,000 vehicles are either not registered or have expired registration in Arizona, resulting in a cost of $25 million a year. Assuming the ALPR would photograph, identify and ticket 62.23 percent of the non-registered vehicles in Arizona, the result is $15,557,500 recovered in registration fees and $18,459,907 in fines, a direct benefit to AzDOT of $34 million during the first year.
  • Benefits from Improved Insurance Compliance. Approximately 11 percent of registered vehicles in Arizona are uninsured. Thus, the ALPR would photograph, identify and ticket 62.23 percent of the 11 percent of Arizona's uninsured vehicles at a fine of $199.63 (the 2006 rate) per vehicle, resulting in $62 million in direct benefits to the AzDOT.
  • ALPR Cost. The total cost of the ALPR configuration is estimated at $9,984,000, due to camera costs of $8,320,000 (416 cameras x $20,000 per camera) and installation costs of $1,664,000 (20 percent of hard costs).
  • Benefits to Cost Ratio. With direct benefits of $34 million in registration compliance and $62 million from insurance compliance (totalling $96 million) and a $10 million system cost (rounding up from $9,984 million), the benefit to cost ratio is 9.6 ($96 million:$10 million).

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Cost/Benefit Analysis of Electronic License Plates

Author: Eberline, A.

Published By: USDOT FHWA

Source Date: June 2008



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Benefit ID: 2012-00778