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Car Auctions in Japan: A Beginner's Guide

Why buy from car auctions in Japan?

That's a good question and a good place to begin. After all, right now where you sit reading this article is probably many thousands of miles away from Japan. So why would you want to import cars from a country so far away?

There are two excellent reasons you might want to buy cars from used car auctions in Japan.

First of all, you get a huge amount of choice and you can view all these used cars remotely online. Car auctions outside Japan may often have a few hundred used vehicles, but only the most miniscule auction in Japan would have such a pitiful selection.

When we consider individual auction locations, we are usually talking about over 1,000 cars per location, and sometimes over 10,000 cars all in one place with auctions being held once a week. Put all these individual car auctions together on the Internet, and over 30,000 on a single day is really not at all unusual.

So there is a huge breadth of choice. But on top of that, there is also a great depth of quality. The fact is that Japanese people just do not use their cars as much as people in other countries. An excellent public transport system and high levels of neighborhood walkability, in addition to the simple fact that in-town driving speeds in Japan are incredibly low, all works together to keep people from using their cars very much.

Furthermore, the Japanese are incredibly careful in caring for their vehicles and yet it does not take long before the car they have seems old to them and they want a new one.

So, cars that are both low mileage and well maintained are very common. But the ironic thing is that the Japanese themselves are really not into used items generally, so they don't really want these used cars for themselves.

You can see where this is heading: Japanese car auctions have a great selection of excellent condition, low kilometer cars, but the Japanese people are really not that interested in buying them. This keeps prices relatively low, and there is all the more opportunity for buyers from outside Japan to compete.

Car auction houses in Japan

In Japan individual auctions that are run independently are rare. They are usually part of a larger auction house. Here are just some of the more prominent car auction groups:

• USS
• TAA (Toyota)
• Honda
• JU
• JAA
• CAA

USS Tokyo is the largest single used car auction location in Japan. Running once a week on Thursdays, it can have up to 20,000 vehicles all being auctioned on one day during the peak car auction season.

There is one auction group that does not have multiple auction locations (called kaijo in Japanese). This auction house is Aucnet, who hold their auctions on Mondays. Their model is a little different in that they do not have a physical auction house where all the cars are gathered.

Instead, they send out inspectors to car dealers who then keep their cars on their lots until they are sold. Since these dealers are still hoping to sell to a regular consumer at retail price, their reserve price at auction is often a little high compared with what a similar car might fetch at a regular auction.

How do you get access to these car auctions in Japan?

So it sounds good: Great cars at good prices. But wait a minute: How on earth are you going to be able to get a car from some used car auction way over there in Japan to where you are? You probably don't know anyone in Japan. You don't speak Japanese. Even if you could buy the car, how would you ship it?

This is where the Japanese car exporter steps in.

Car exporters in Japan handle the process of bidding at the Japanese car auctions, transporting the car from the auction to the port, doing the paperwork and shipping the car over to you.

There are many car exporters shipping used vehicles from Japan, so this then begs the question of how you find yourself a good one. After all, we are not talking about trivial sums of money even for a single car, so it is vital you find one who is going to do a good job for you.

Here are points to check:

• How many car auctions can you buy from through them, and can you access them all from one place online?

• Can you deal with a native English speaker who is also fluent in Japanese? (Nothing is worse than trying to overcome language barriers.)

• Does this Japanese car exporter offer professional translations of the car auction inspector's reports and help you really understand the condition of the cars in the auction?

• Does he have good communication skills - keeping you in the loop about what is happening with your vehicles so you don't worry?

• Does this exporter work hard to ensure your cars get to you from the car auction in Japan as quickly as possible?

Who has bidding access to Japanese car auctions?

In order to buy from a car auction in Japan, the first thing you need is to be a member of that auction.

This usually means you have to be a registered business in Japan as well as having property as collateral and having a Japanese guarantor. This keeps regular consumers from having direct access to these car auctions, so the auctions tend to be a place where Japanese car dealers and Japanese car exporters buy at wholesale prices.

Japanese car exporters are usually registered companies in Japan and therefore have access to the car auctions in Japan by becoming members of each auction house.

How are the used cars inspected in the car auctions in Japan?

Japanese car auctions have a strict inspection regime. Since they are independent companies, the quality of the inspection can vary a little between auction houses, but in general the grading system they use is very uniform and easy to understand.

First of all, sellers register their cars for the following week's auction, after which these vehicles are inspected by inspectors who are qualified mechanics.

It is important to bear in mind that these inspections are very thorough, but they do not involve any dismantling of the vehicle, nor do they involve test-driving it. Inspectors will often pick up mechanical issues very well, although problems which would only come to light if the vehicle is driven at anything more than parking lot speeds can be missed. This is no fault of the inspectors, just a limitation of an inspection that does not involve a road test.

The inspector writes his report on an auction inspection report. The car is given an overall grading as well as a grading of the interior quality, and sometimes an additional grade for the exterior condition also. The car auction inspector also writes details of issues that he has found. Some comments he writes in Japanese, and then issues like scratches and dents that relate to the car's exterior condition, he writes on the "car map".

Remember, you should not need to just rely on the overall grading when buying from Japanese car auctions: A good car exporter should give you detailed translations and help you understand what the Japanese car auction inspector has written on his report.

Japanese car auction bidding practices

You will recall that only members of these used car auctions can actually bid, and they do so in two ways: Either at the auction location (kaijo) itself, or online from anywhere.

However the computer bidding system is the same whether bidding at the auction house on one of their machines or remotely online.

Bidding is very fast. Cars are sold in anything from 10 to 45 seconds or so. The actual process may just look like playing a video game, but there is a real art to doing it right to avoid paying too much for a car – or equally letting it get away by holding back too much.

Sometimes you will find that cars will fail to meet their reserve price and bidding is stopped. This does not mean that you cannot still have a go at gettin the car, though. It is then possible to make offers to the seller under the auspices of the car auction. Fewer cars sell in negotiation like this than are sold in live bidding. A good Japanese car exporter will handle the process of live bidding and negotiation seamlessly and get the best deals for his customers.

You win the car at auction - then what's next?

After a car is bought at a Japanese car auction, it is then moved by car transporter to the port. Once at the port, the car waits to be loaded onto a RORO ship, or waits to be loaded into a container. A good car exporter will be arranging all of this behind the scenes without requiring your intervention.

Even while the car is in transit from the auction, the car exporter will immediately start looking for bookings on the earliest ship, as well as working on paperwork to de-register the car and pass it through Japan-side customs.

Once it has been loaded on a vessel, the car will take anything from a few days to over a month to reach its destination. This is mainly dependent on the distance of the destination country from Japan.

The car exporter will send the end customer the Bill of Lading, invoices, the deregistration document and any other documents that the customer requires for importing the car into his or her country. These import regulations vary from country to country so it is vital to check them before buying anything.

Conclusion

Japanese car auctions can be a great place for car dealers and car importers around the world to find excellent quality vehicles at lower prices than they would expect to be able to find locally. The huge numbers of cars in thse car auctions in Japan that can be viewed online is another great plus.

However, finding a top-notch Japanese car exporter who both can communicate well, and also steer you safely through the process of buying from the car auctions in Japan is the real key to success. Compromise on this and you will be piling up problems for yourself down the road.

About the Author

Expert Author Information

Stephen Munday has 12 years experience living and working in Japan, including 5 years buying from car auctions in Japan for customers around the world. His company, Integrity Exports, was set up with the goal of making buying from car auctions in Japan a stress-free and smooth experience.

You can see thousands of cars in the car auctions in Japan live on Integrity Exports' website. Take 1 minute to sign up here for a 14-day free access pass.

This article is (c) Stephen Munday 2011. Permission is only given to reproduce this article in full with the URLs correctly hyperlinked and with the authorship and copyright correctly attributed.

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