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Buying Auction Vehicles

Auto Auction in Japan

When people in Japan want to buy a vehicle, they have two options. They can either get one from a dealer's lot or from an auto auction. Of the two, buying from auctions is the most popular.

Below we will show you the benefits of buying via auctions and how to buy from auctions. Knowing what to do and what to watch for can make it a more enjoyable experience and you'll more likely be able to get what you want.

It is important for anyone seeking to buy from auctions to know that they cannot buy directly. Auto auctions legally can only give membership to those with trading licenses for used cars. (i.e. Dealers or Exporters)

Related Pages

List of Agents
List of Japanese Auto Auctions
Map of Japanese Auto Auctions
Inspections Sheet Examples
Export/Import


BENEFITS OF AUCTIONS

When buying a vehicle in Japan you must consider how you will buy: from a dealer's lot (called Stock) or through auto auctions. Auto auctions (or simply AA) have advantages because they:

  • Save you time on searching because there is huge selections available.
  • Are a safe way to buy - you're getting independent reviews of a car's condition.
  • Often give much more competitive prices.

AUCTION PROCESS

Here's some guidelines of what happens at auto auctions and what you should do to purchase vehicles from them. Knowing what will happen will help you avoid pitfalls and make better decisions when searching, bidding, and purchasing.

Vehicle Has Inspection

All vehicles must be first inspected by the auctioneer before they can be auctioned. Because the reputation of an auction house is in its accuracy of assessing a vehicle's condition, they strive to give fair inspections.

When they inspect, they use a form called an 'Inspection Sheet'. In general, you will find the following:

  • Vehicle's Data (registration, chassis number, etc.)
  • Any structural damage.
  • Any cosmetic damage.
  • Any mechanical damage.
  • The vehicle's Rating (eg. 4.5)
  • The vehicle's Equipment (eg. alloy wheels)
  • Assessor's Notes (written in Japanese - you should get them translated)

Take the time to look at Inspection Sheets for more information. Remember to make sure you bidding agent takes the time to double check a car you want to bid on. Auto auctions allow members to examine cars on the day of the auction before bidding begins.

Vehicle Is Listed for Auctioning

A auction house will then assign it to an auction date and add the vehicle to its database for members to view. Members of the auction can find this vehicle via internet or fax. For an example, visit this demo site (external link).

If your agent is searching for you, he/she will notify you of possible candidates. If you are planing to look yourself, on the internet there may be auction listings available.

Buyer Picks a Vehicle

There are many ways to find vehicles but before you begin, you must choose who will search. Either your agent will which may cost extra. He/she will need to know what you want and how flexible you are. Or, you can search yourself which could become time consuming and you will be unable to access all places your agent is able.

If you choose to use the agent to search, you must express exactly what you're looking for and clearly. You might find a exporter/agent doesn't really know English very well. Make sure you either work with him/her in very simple terms or hire another one that speaks English better. With all agents, have them repeat what you say to know if they understand your terms. Also get things in writing whenever possible.

If you choose to search yourself (some exporter will give you access to listings), you may want to prepare for the task. Check out the Glossaries for definitions of any terms you might not know (eg. FOB, PS, FAT, etc). Also in the Glossary section is Japanese to English Translations for any words not in English found on Inspection Sheets.

When you are looking for cars, there are two common ways to locate a car:

  • Browsing - look through lists of cars. -or-
  • Searching - some website have search engines to narrow down your ressults.

Important things to watch for when considering a car:

  • Mileage
  • Ratings (Overall, Interior)
  • Manual or Automatic Transmission
  • Gas or Diesel
  • RHD or LHD - if not mentioned, it is RHD (Right Hand Drive - driver sit on right side of vehicle).
    • Some LHD (Left Hand Drive) countries require conversion. Very difficult to do in Japan.
  • Year - it can be the production year or first registration year. Knowing both is good for importing reasons.
    • Check production year by chassis number.
    • Or check through your exporter (bidding agent).

You should find a few vehicle you like before you stop searching. With a few choices to choose from it will make it easier and quicker for your agent to get you a car. Try to get a selection narrowed down to about 3-6 cars. If you use a search function, it's possible to narrow and widen you choices to what is most appropriate.

Buyer Prepares a Bid

Once you find what you like, contact your agent to place a bid. There are a number of different methods that a bidding agent (usually your exporter) may use to bid. Auction houses use anything from a advance automated bidding system over networks to simple email and fax.

At the time of placing a bid, you usually must either place a deposit of ¥100,000 to ¥200,000 or pay 100% in advance. Both charges are common among exporters. If a bid fails, you should be either refunded or given the opportunity to use this money for another bid. Expect your bidding agent to charge around a minimum of ¥1000 for a failed or successful bid because this is what is charged by the auction house to enter bidding.

Remember to clearly convey which car you want and what your maximum bid is to your agent. Communication can be difficult if your bidding agent doesn't speak English very well. Fortunately, some exporters are providing both automated systems that can translate your input into Japanese and/or native English speakers.

You must remember that you are simply bidding which is not the same as purchasing. When you are buying an auction car, first you place your bid. If your agent wins the bid and fulfill all other conditions, then you can begin purchasing.

Bidding Agent Bids at the Auction House

This is where you're exporter (acting as bidding agent) is especially needed. Auction houses are usually opened once a week on a pre-selected day. Those who wish to participate must come a few hours earlier to inspect the cars they will bid on. After inspections occur, the auctioning begins.

If a vehicle is as you want, your agent will bid up to your maximum. If you have the highest bid, you will most like be able to continue on to purchasing. If some else outbids you, your exporter will try to find another car. If necessary, you should be refunded.


PURCHASING AFTER A SUCCESSFUL BID

At this stage, you'll be required to pay the remaining balance. Depending if you are using FOB, CFR / C&F, CIF or another agreement, you may also need to pay freight charges, marine insurance, and possibly other charges/fees.

Most exporters will use only wire transfer (often called Telegraphic Transfer or TT) for payments. Buying by credit/debit card is usually not possible due to large fees the seller must pay to the banks.

Once everyone is in agreement, you will receive a purchasing agreement and invoice. Some exporter may want you to sign both and fax back copies for security reasons.


Going Further

Export/Import

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