Car importers know that car auctions in Japan are a great place to find low mileage, high quality used cars at good prices. My aim in this article is to help you understand these car auctions in Japan better so that you can make a good, informed decision about whether to buy from them or not, and how the whole process works.
Why consider buying from Japanese car auctions?
This is a good place to start. 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 to consider buying cars from used car auctions in Japan.
First of all, the selection is immense and you can view all these cars remotely online. Auto auctions outside Japan may typically have a few hundred used vehicles, but only the tiniest auction in Japan would have such a pitiful selection.
In terms of individual auction locations, we are usually talking about over 1,000 cars per location, and sometimes over 10,000 cars (in the case of USS Tokyo) all in one place and being auctioned there weekly. 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 that is not all. There is also a great depth of quality. The fact is that Japanese people just do not drive 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 urban driving speeds in Japan are incredibly low, all works together to keep people from using their cars very much.
Then on top of this the Japanese are fastidious 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 low mileage and well maintained are a dime a dozen. But the ironic thing is that the Japanese themselves are really not into secondhand items, so they don't really want these used cars for themselves.
You can see where this is going: The car auctions in Japan have a great selection of great condition, low kilometer cars, but the Japanese people are really not that interested in buying them, so prices are relatively low and there is all the more opportunity for buyers from outside Japan to compete.
Car auction groups and locations in Japan
In Japan individual auctions are rare. They are usually part of a larger auction group. Here are just some of the more prominent groups:
USS
TAA (Toyota)
Honda
JU
JAA
CAA
USS Tokyo is the largest single used car auction location in Japan. This car auction runs once a week on Thursdays, and at peak season can have up to 20,000 vehicles all being auctioned on one day.
One auction group that does not have multiple auction locations (called kaijo in Japanese) 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 can you access the car auctions in Japan?
So far, so good. 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? You don't know anyone there. You don't speak Japanese. Even if you could buy the car, how would you ship it?
You need a Japanese car exporter to help you with this one.
Car exporters in Japan are set up to 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 here, so it is vital you find one who is going to do a good job for you.
Here are some things to look for:
How many auctions can you buy from, 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 more stressful than trying to overcome language barriers.)
Does this 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 the exporter in Japan have good communication skills, keeping you in the loop about what is happening with your vehicles so you don't worry?
Does the exporter work hard to ensure your cars get to you from the car auction in Japan as quickly as possible?
Who will bid for you at these car auctions in Japan?
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 entails being a registered business in Japan as well as having property as collateral and having a guarantor. This precludes regular consumers accessing these car auctions directly, so they tend to be a place where Japanese car dealers and Japanese car exporters buy at wholesale prices.
Japanese car exporters are usually registered Japanese companies and therefore have access to the car auctions in Japan.
Japanese car auction vehicle inspections
Car auctions in Japan have a strict inspection regime. Obviously the quality of the inspection can vary a little between auction houses since they are independent companies, but in general the grading system they use is very similar and easy to understand.
The cars and other vehicles are registered for the following week's auction, after which they are inspected by inspectors who are qualified mechanics.
Now, 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. They 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 the kind of speed you would expect in a parking lot 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 sheet. He gives the car an overall grading as well as a grading of the interior quality. He 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" - a diagram of the exterior of the car.
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.
How does bidding work in these car auctions in Japan?
As we have noted above, only members of these auto auctions can actually bid. They do so in two ways: Either at the auction location (kaijo) itself, or online from anywhere.
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. Generally a car will be sold in anything from 10 to 45 seconds or so. The actual process may just look like pressing a button in 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 cars will fail to meet their reserve price and bidding is stopped. 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 to get the best deals for his customers.
What happens after the car is won at auction?
After a car is bought at a Japanese car auction, the first thing that happens is that it is 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.
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 doing paperwork to de-register the car and pass it through Japan-side customs.
Once on a ship, 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 de-registration 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
Car auctions in Japan can be a great place for car dealers and car importers around the world to find really good quality used vehicles at lower prices than they would expect to be able to find locally. The huge numbers of used cars in the Japanese car auctions that can be viewed online is another great plus.
The key to doing this successfully is to find 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.
If you enjoyed this article and would like to learn more, I have a huge amount of in-depth articles and videos covering every aspect of buying from the car auctions in Japan, including details about Japanese car auction inspections on my company website.
About the Expert Author
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 Japanese car auctions a stress-free and smooth experience.
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.
