Japan is one of the cheapest places to buy used cars. Many of their secondhand cars are in great shape.
They are in good condition for several reasons, including:
- the Shaken law
- the risk-aversion mentality of the Japanese.
Often you can buy a 3-year-old car from a Japanese car dealer for a very reasonable price. That’s just how great Japanese surplus cars are.
What if you want to buy a secondhand car directly from Japan?
Is that even possible?
The answer to that is 100% yes! You can definitely buy a secondhand car through an auction in Japan. However, you need to find an auction dealer for you to be able to bid in Japanese car auctions, and finding one can be a little tricky, especially if you are in another country.
There are several trusted websites where you can buy imported cars directly or partner with them to have them bid on your behalf.
The Two ways to bid on a car auction in Japan
There are two ways to bid on a car auction in Japan. The most common type is getting dealers to bid for you in an open car auction. This is considered a “blind auction” since you personally can’t bid, and you will have to trust your dealer to bid on quality items.
These types of auctions happen almost daily in Japan, but not everyone has access. Only agents, car dealers and other registered individuals can bid at these auctions. The Second way to bid at a Japanese auction is through in-house bidding. Many people prefer in-house bidding, where big companies make their own auctions on their own websites and allow buyers to bid directly. This cuts out the need to go through a dealer as a “middle-man”. These websites essentially gather sellers and post the items on their website, where buyers can bid on their own.
Where to buy a car from a Japanese auction
Here are some of the best websites to look for Japanese cars being sold at auction:
These are just a few of the many Japanese car auctioneers out there. You can do your own research to find others that suit your needs or interest. Just remember that because this involves a significant amount of money, there are phishing sites that are after your money. Only trust websites and online auction houses with proper documentation that can really walk you through the bidding process.
It’s also smart to check reviews about certain websites and online auction houses before transacting with them.
Steps for buying an auction car in Japan
Buying a car from an auction of Japanese cars is not that difficult. But you, of course, need to do proper research and prepare a significant amount of money to pay for the car. I can’t emphasize enough how important it is to really get to know your chosen auction partner.
To help you better understand how the auction works, here is a simplified list of steps that you need to take:
Step 1: Look for a partner
As mentioned earlier, the first thing you need to do is to choose a RELIABLE auction partner. There are a few things you need to look for when choosing a partner:
- An auction dealer should have proper documentation about their business. If you are skeptical, always contact customer support and ask for government registrations and other proof of their business. While there is no guarantee that they will 100% provide these for you, it’s still worth asking.
- If it’s in-house bidding – meaning they have their own stocks of cars for bidding— they should be able to provide specific details about the cars available. For example, the car’s damage, car grade after inspection, engine grade, cosmetic damages, if the car has gone through an accident, etc.
For most auction houses, detailed car information is always shown during bidding. There’s a sheet that auction houses present when a car is in an auction. This way, you can see the details of the car and the remarks of the inspector about the car.
- They should be able to import the car for you. Make sure the dealer can ship the car to your target destination and that they are registered under Japan Used Motor Vehicle Export Association (JUMVEA).
While JUMVEA is not a regulatory agency, they are responsible for helping importers in shipping Japanese cars abroad. Being a member of JUMVEA greatly increases the level of confidence that you can have in auction partner/dealer being able to ship the purchased vehicle.
- They should be able to handle the customs clearance and provide the necessary documents for the importation in order for the car to be received properly in your country of destination. It’s also important that they can handle local delivery as well.
Step 2: Choosing a car
There are two ways for you to be able to buy a secondhand car in an auction house/ website:
- If you are bidding on a car through a website, they often have pictures and detailed information about the cars available for auction. First, you need to specify the make and model of the car you want to buy. You also need to indicate the budget range for your intended car.
If you are unsure about what you want and want to browse available cars, most suppliers will be able to offer you advice.
- There’s also a “blind auction” option where the auction dealer/partner will bid for you in an auction house based on your criteria, such as make and model, price range, inspection grade, and other specifications you prefer. However, the problem with this kind of bidding is that your chances of getting the car you want are much smaller than bidding in an in-house auction.
Step 3: Strike a deal and pay
For in-house auctions, both the dealer and the buyer should be able to reach an agreement for the deal to be finalized. Once an agreement is reached, the buyer will then be required to pay up. But before you agree on the deal, make sure you get all the quotations for the item and the shipping costs. Only when you can be certain of the total expenses that you finally agree to receive the billing or the purchase order for the said car.
Step 4: Monitor the progress until deliver
The last thing you need to do is to make sure that you get a tracking system for the shipment. This way, you can monitor the current situation of your shipment and confirm with the shipping company if the car is really on its way to you.
Is importing a car from Japan hard?
Buying the car and shipping it to your destination country is easier than you think. The difficulty arises when the car reaches your destination country.
Each country has specific laws for car importation. Specific requirements, such as permits, inspection documents, etc., should be provided for the car to get through your country’s customs.
Most problems would occur during custom inspection, especially if your dealer failed to provide all the necessary documents to customs. That’s why it’s very important to choose an auction partner/ dealer that is not only capable of shipping to your destination country but also has experience shipping to your country as well.
Experienced dealers often know what to do and how to ensure your shipment gets through most countries’ customs regulations. This doesn’t mean that new dealers can’t do the same; it’s just that it’s easier to trust those who have done it already.
Can a foreigner buy a car in Japan?
There is no doubt that foreigners can buy cars in Japan, whether brand-new or secondhand. However, it’s very difficult for foreigners to purchase cars directly from sellers or auction houses.
You have to remember that the Japanese are not a very inclusive type of people. They have difficulty trusting foreigners in business since foreigners can easily come and go. And the Japanese are a very risk-aversive type of people.
That’s why, when making transactions in Japan that involve a significant amount of money or a long-term transaction, you always have to go through a “middle man” to serve as a guarantor. This is true not just for buying cars and renting apartments in Japan but also for many businesses.
It’s great to have Japanese friends who can recommend businesses or do transactions for you, but you can always do things on your own if you don’t have any Japanese connections. It’s just that you need to put in more effort since you need to show that you are a trustworthy business partner, and you need to find a dependable business partner as well.
Is it cheaper to buy a car from Japan?
It is generally cheaper to buy cars from Japan than western cars outside Japan, especially second hand ones.
I have thoroughly discussed why Japanese cars are cheaper compared to most countries worldwide in another article. Check out this article about why Japanese cars are reliable.
How much tax do I pay to import a car from Japan?
There are four things you need to watch out for when it comes to shipping imported cars from Japan, and you need to pay for all of them: 1. Shipping cost, 2. FOB, 3. Import duty, and 4. Value-added tax.
You might ask, “I only want to know about the tax. Why do I have to know all these other things?” The answer is that you need to know all the costs incurred in purchasing and shipping your car to calculate the Tax and import duty you have to pay. It would be best to settle all of these before the car is shipped to your destination country.
The shipping cost refers to the amount the shipping company charges you or the dealer for transporting the car from Japan to the destination country. The farther the destination country is, the higher the shipping cost will be. The shipping cost doesn’t include any other services but the shipping itself.
The FOB means “Free on Board” or “Freight on Board.” The FOB indicates who is responsible for the damage that might occur during freight forwarding –usually by sea. It would help if you clarified this to your seller or dealer before agreeing to purchase the auctioned car.
The FOB is calculated based on: the selling amount of the car (based on the receipt), the agent fee (the middleman), the auction fee (payment to the auction house), and the paperwork in Japan (permits and other release documentation by the government of Japan). The total of all of that is the FOB.
You already paid for the FOB the moment you purchased the car. The FOB is just a declaration of the total value of the shipment.
The import duty that needs to be paid at customs is 10% of the FOB and the Shipping cost. Everyone has to pay import duty when sending items abroad, no matter how big or small the value of the shipment is.
The Value Added Tax (VAT) incurred in the shipment is 20% of the total value of the FOB, the shipping fee, and the import duty.
All of these must be discussed with your seller or dealer before you buy a car in Japan. You can negotiate with your seller or dealer about the fees, especially if the seller or the dealer provides a special offer for international shipping.
The exchange rate greatly affects the total value of tax you pay, especially since the value involves hundreds and thousands of JPYN. Make sure to check the exchange rate on the day you decide to pay to avoid problems with the payment
How can I avoid import tax/ Import duties from Japan?
Import tax laws vary from country to country. When importing products from Japan, both the value-added tax and the import duties are collected in the customs of the country of destination -aside from the VAT you need to pay in Japan for purchasing the car.
There is no way to avoid paying import tax for imported cars from Japan, especially since big shipments such as cars are high-value items that the customs can’t afford to miss. You probably could get away with paying import tax and VAT when purchasing small items such as watches, wallets, shoes, etc., if you have them sent via Japan post. But cars? There’s just no getting out of it.
What are the rules for importing cars from Japan?
Each country has its own importation law that all importers must comply with to successfully get a product to the destination country. Governments are very strict regarding compliance with such laws as it impacts an entire industry and the country’s economy. Because of this, customs are very astringent to contraband.
While it’s hard to determine each country’s law for the importation of cars, there are general rules that can serve as a guideline when importing cars from Japan.
- Age of vehicle. The age of a car is very different in Japan compared to any other country. In most countries, the age of a car is determined by the date or year they are manufactured. However, in Japan, the age of a car is determined by the date the first vehicle is registered.
This often is the cause of a problem when importing cars from Japan, especially in countries with strict rules on importing old cars, such as the United States of America.
When importing cars from Japan, make sure to have on the document when the car is manufactured as it will be required in the customs check as soon as the shipment for your car reaches the country of destination.
- Adherence to safety features. Some countries are also very strict when it comes to the safety features of every vehicle in the country. It’s very important that you know the safety regulations for cars in your country. Talk to your dealer about the safety features of the car you are purchasing in Japan, and make sure to include this in the specification documents of the car.
- Car configuration. You might want to check whether your country allows car importation without dismantling it. Some countries require imported cars to be dismantled first for inspection and other precautionary rules. Don’t worry if your country requires a dismantling of the car. You can have it reassembled later. However, it might cost the reassembly.
- Taxes and other regulations. It’s very important to know what additional fees you need to pay when importing the car. Some taxes vary from country to country. There could also be other fees that are incurred on high-value imported products. The most common fees you must watch out for are the VAT and import duties.
There could be other things you need to comply with before importing a car from Japan. It’s best to check your country’s Customs Bureau since they know the regulation for importing cars better.
Is it illegal to import cars from Japan?
It’s definitely not illegal to import cars from Japan unless you do it using back-door channels. Many countries are very strict in allowing imported products to enter their country. Following the rules and providing the necessary permits is crucial for your purchased car abroad to get through customs.
Should the customs of the destination country deem your shipment (the car) illegal, they will automatically impound the shipment and investigate everyone involved in shipping the said car. This includes the shipping company, the seller of the car, the auction house/ website, and the seller –which is you.
So please ensure you have all the necessary documents from the seller and make sure you only purchase from a legitimate auction site or dealer.
What is the best month to buy a car from Japan?
Spring is the best time to buy cars in Japan. It’s best to search for cars starting in late February or early March. The main reason for this is that many car businesses end their fiscal year at the end of March.
During this, they tend to force sell their old stocks to reach a certain quota or the target sale of a company. Many companies ramp up their promotions and offers before their books officially close.
Companies are also competing with each other through sales. This causes car prices to go down even further.
How long do you have to wait to import a car from Japan?
On average, it takes at least 93 days for all these processes to complete, given that there are no bumps along the way that could cause further delay.
There are a lot of factors that affect the total amount of time required before an imported car reaches you.
Some of the factors considered are the time consumed looking and bidding for your ideal car in Japan, the amount of time needed to process the documentation, the shipping arrangements, the distance between Japan and the destination country, how many ports the shipment will have to go through, unloading and customs checking, conversion and testing (for local regulatory requirements), and the registration (for some countries).
Overall thoughts on buying a Japanese car at auction in Japan
There are plenty of things to consider when buying cars through action, including your budget, the available car, the dealer, the import regulations, etc.
One important thing you need to find is an ideal auction dealer. They are responsible for everything on your behalf, from choosing the car for you to complying with documentation for the importation, shipping, custom duty, and so on.
Choosing your auction dealer could make everything as easy as 1-2-3 or make everything a nightmare experience. Make sure to ask everything, such as what the dealers can do for you, what they are responsible for, how far their services go, and how much they charge for everything. Clear things up before you go making deals with them.
It’s also very important that you know the traffic safety regulations that your car needs to comply with to get through checkpoints and other laws pertaining to car importations. This is not optional, as it determines whether your car on freight will get through customs or will be impounded by the government. You don’t want problems with the car you already paid for.
For the most part, it is generally safe to buy cars in Japan as long as you take precautionary measures and do your research before going through with it. Good luck with purchasing your new car from Japan!
Contributor
Article by John Salinas.
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