Risks of NOT purchasing from the Japanese car auctions

Some people consider buying through Provide Cars cars from the Japanese used car auctions as a risk.  How do you know the cars in the auctions are alright?

Personally, I would find buying from a dealers stock list as a greater risk!

Is the appraisal of the car exporter unbiased?

Is there something the exporter doesn’t want you to know about the car?  It may be major, it may be minor!

Are you sure the car has done 53,766kms not 153,766kms?

The obvious point in this argument is that of course a Japanese used car dealer is always going to be biased about his stock that he is selling to you!

Now, the important question:  is the appraisal of a car purchased through Provide Cars in the Japanese car auctions unbiased?

Although the appraisal system in the auctions is not perfect, it needs to be excellent, or at the very least, “good”, for the whole process to work.

You need to understand that the majority of vehicles sold in the Japanese car auctions are bought and sold for the Japanese local market.  Exports are a minor in the whole process.  If the appraisal system of a certain auction was biased in favor of the seller, unsatisfied buyers would stop buying from that auction, the auction would have no income from commissions from the sale of vehicles and then would fail to be a viable economic entity for the owners.  For an auction to function and exist, there needs to be happy buyers.

Secondly, there is a claim period after purchase (usually about 4 days) where the purchaser of a vehicle can claim to the auction about defect unlisted on the auction sheet.  If the fault that is listed on the auction sheet can not be claimed on.  Any fault that is NOT listed on the auction sheet can be claimed on.  It is in the interest of the auctions to reduce, or even better, have no claims involved in cars sold each week.

Finally, odometer readings.  The auctions run together a computer system recording all chassis numbers of vehicles and odometer readings at time of sale in any auction.  If any vehicle appears that has differing data (kms reduced) to that which is on the systems history, the auction “pounces” on the seller demanding to know an explanation.  If a good explanation is not given, the seller can be banned from purchasing from that auction.  Worse still it could involve being investigated by the police.  I have known of a dealer who spent 6 months in prison for altering odometers.

No such case with used car exporters selling their stock.

It is common for exporters selling from their stock to adjust the odometer.  A car with 53,000kms on the clock is worth a lot more than a car with 153,000kms on the clock.  The exporter knows that in certain countries it is not possible to sell an adjusted odometer reading vehicle (like New Zealand), so they make you “Log In” to your region before viewing their stock page.  If your region is New Zealand, you will see the stock listed as 153,000kms.  If your region is not like New Zealand then they will show you the stock as having 53,000kms.  As they are not sure which region will buy the stock, they do not adjust the odometer until the car is sold.  If it is sold to New Zealand, it is not adjusted.  If they sell it to another region with 53,000kms odometer reading, they adjust it.  If there happens to be a whistle blower, informing the Japanese police about the crime, then they can claim it was an input mistake on their stock page.

Differing companies may vary their tricks like above, but their motivation is the same: deceiving you!

To make it clear on odometers:  used car exporters can modify and deceive at will, auctions can not.

So I ask you:  which is riskier to buy from?  A used car exporters stock list or by purchasing through the auctions through Provide Cars?

The car export timeline. Which is faster? Buying from the auctions or from a dealers stock?

The export timeline. So which one is faster? Buying from a dealers stock or buying from the auctions.

First of all we need to understand the process of exporting a used car out of Japan.

  1. A car is purchased by an exporter, agent, Japanese used car dealer, and in our examples case, Provide Cars.
  2. The documentation is usually sent and arrives at Provide Car’s office within a week of purchase. Let’s say a week, though there are exceptions.
  3. The car’s deregistration document (or registration document if it is still registered) needs to be changed to an official “export deregistration document”. This means some documentation writing then a visit to the local “Rikunkyoku” or local city car registration office, with documentation in hand and number plates in hand (if it was still registered). If you have a dot missing or a “t” uncrossed then forget about any success that day! In Japan there are no exceptions, every “t” crossed and every “dot” dotted. If you manage to succeed in getting your “export deregistration certificate”, then you are ready for the next step.
  4. Ship booking. Yes, Provide Cars can only book a car on a ship if you have your “export deregistration certificate”. Plus, you must book at least one week before the boat leaves. Some countries there is only one boat per month, so if you miss this by a few days… well that is a pity!
  5. Send documentation to the export yard for customs clearance. The cars export certificate must be sent to the shipping line’s agent to clear customs on the Japan side. Included with this a various other documents.
  6. Nothing goes wrong and the car is sent/exported to your port.
  7. Documentation is received back from the export yard to Provide Car’s office.
  8. The original “Bill of Lading” is received from the shipping line.

Now what in this process differs from buying from a dealers stock and buying from the auction through Provide Cars?

The dealer has usually purchased his stock a few days to weeks or even months before he sells it. This means most times he has the de-registration document available.

Compared with buying directly from the car auctions, the delay will be perhaps a week after the decision to purchase from a car dealer.

Now add onto this payment. A Japanese used car dealer will not book a car for export until the car has been paid for. Often a TT transfer will take a few days, even up to 5 days, that is basically the time it takes to purchase a car from the auctions and have that cars documentation arrive at Provide Cars office.

So essentially, the time it takes from the moment of purchase, whether from a used car dealer’s stock or from the auctions, to the moment of export, is the same.

So in terms of time saved, there is no issue between purchasing from a dealer stock or purchasing from Provide Cars through the auctions in Japan.

The advantages and disadvantages with buying through the auctions

Advantages:

  1. Price
    You will get the best price, especially if you are patient. Exporters, Japanese car dealers all buy from the auctions for their stock as that is the cheapest place to purchase a vehicle in Japan. It is purchasing at the wholesale rate, rather than the retail rate as through a dealers stock page.
  2. Large Selection of Vehicles to Choose From
    The larger the selection of vehicles there is to chose from the better it is for the buyer. Getting 10 vehicles the same colour with a variety of kms on the clock means you have a variety of prices being sold and hopefully finding the one that fits into your budget. Having the same model in a variety of years also helps to gain the right vehicle into your budget. For example a 2005 Toyota Estima is the same model as a 2006 Toyota Estima, though with all other factors the same, the later will sell at a higher price in the auctions. Basically the more to choose from, the better the vehicle will be.

Diadvantages

  1. Time frame
    Because we can only see the vehicle 2 or 3 days before it sells, the time frame to decide whether to purchase or not is limited.
  2. Photos
    Most auctions only show 2 or 3 photos of a car before it sells, often these are at a distance. Compare this to a dealers stock, where he may have up to 20 photos of a vehicle on his stock page.

A lot more has to rely on the auction sheet when purchasing from the auctions.

So there are the advantages and disadvantages for purchasing from the Japanese car auctions. For price and variety, definitely the auctions. If convenience is a strong value of yours over savings then your best bet may be to purchase from a dealer stock page.

How to negotiate the price when a cars has passed in the Japanese car auctions

Car passed. Negotiation, what to do?

The whole realm of “negotiation” after a car has passed in the Japanese used cars auctions not many bidders seem to understand the whole process. Some of them want to:

  1. Offer a bid under the passed bid price! (No sorry that will not work, (the auction will not even receive such an offer)).
  2. Offer a bid AT the passed price. Getting closer now, BUT, every Japanese car auction has set RULES that state at what price negotiation can start from.
  3. Ask to negotiate the next day or even the next, next day after the auction. The Japanese used car auctions have set rules on exactly what time limits you can negotiate from.
  4. Some customers would like to negotiate through the auctions and then perhaps withdraw their offer if they “change their mind” afterwards. Sorry not possible, negotiation purchased cars, unlike normal purchasing through the auctions, can not even be cancelled!!

Here are the basic rules.

After a car has passed in the auctions, you are allowed to negotiate, however, you must negotiate according to the rules of the auctions. This means in USS auctions you must negotiate at least 30,000 above the pass price. Other auctions, we ring and ask what price the seller wants to start negotiation from. Other auctions it is 10,000yen above the pass price. Every Japanese used car auction has it’s rules, and there is no compromise from those rules.

Order of negotiation. You may be willing to negotiate higher than another bidder. However, if the other bidder has their negotiation in BEFORE you, they have buying rights OVER you.

Time limits. Some auctions allow up until 12pm the following day for negotiation. However, if the auction can not contact the seller, there is no negotiation. Other auctions in Japan only allow until the end of the auction and others only a certain amount of time since the car passed.

Contract.

Unlike most purchases in the Japanese used car auctions, where you can cancel a car purchased within the first hour of purchase or sometimes before the auction closes, for a large fee, negotiated cars can not be cancelled. You negotiate, you own, period.