
I’ll answer that burning question head-on!
Everyone—don’t you remember thinking, “Wow, Japanese used-car auction prices used to be dirt cheap”?
When you compare auctions from 20–25 years ago (the early 2000s) with today’s market—where cars often sell for more than their new-car prices—it feels like a different world.
In this blog, I won’t just compare sticker prices. I’ll dig deep into why they were cheap back then—through the lens of the value of money at the time and shifts in the global economy.
Back then, Japan was right in the middle of the “Lost Two Decades.” It was a Galapagos-like market, totally different from today’s globalized arena. That structural difference is the decisive reason behind the price gap.
All right, let’s time-travel—together we’ll uncover the real story behind those “crazy-cheap” prices.
The Lost Two Decades: The “backstory” of Japan’s used-car market in the early 2000s

Domestic deflationary pressure and the “if I wait, prices will drop” mindset
In the early 2000s, Japan was blanketed by the heavy air of deflation, with prices continuing to fall. Government data show the CPI at –0.7% in 2000, –0.7% in 2001, and –0.9% in 2002—down and down again.
What happens when prices fall? Consumers think, “No need to buy now—next month it might be cheaper.” For big-ticket items like cars, that psychology hits squarely.
Experts also point out that when the economy stalls and GDP dips, vehicle prices naturally tend to soften. This prolonged deflation is the single biggest reason used cars were treated as affordable practical goods, keeping overall auction price levels suppressed.
Structural oversupply: shorter vehicle lifespans and Japan’s “hand-me-down” culture
Cheap prices weren’t just a demand-side story. There was a big supply-side reason too.
Back then, Japanese cars generally had shorter service lives than today. The average was about 10 years, versus roughly 12 years now. Why?
Once you crossed 100,000 km, major components—like timing belts—often needed replacement, and many factory warranties had expired. Rather than pay for repairs, many owners simply bought a new car.
Result: a steady flow of relatively new, good-condition used cars pouring into the market—a state of oversupply. And because overseas buyers had not yet entered auctions in full force, price competition was mostly domestic, which kept prices low.
Globalization and structural change: Why today’s market feels “too expensive”

A macroeconomic flip: the one-two punch of yen depreciation and inflation
Today’s surge is the mirror image of the 2000s—especially historic yen weakness plus an inflationary backdrop.
Since around 2013, the yen has tended to weaken, making Japanese auctions super attractive bargains for overseas buyers. A weak yen boosts exporters’ profits and turbocharges export demand.
As a result, powerful buyers from around the world flooded Japanese used-car auctions. Fierce bidding between domestic dealers and overseas buyers pushed hammer prices up sharply. Prices no longer reflect only domestic conditions; they now move in lockstep with exchange rates and overseas demand.
On top of that, Japan has been shifting away from deflation toward inflation, making higher transaction prices easier for the market to accept.
Structural supply-chain issues and a decline in domestic supply
Another driver sits on the supply side.
Since COVID, global semiconductor shortages delayed new-car deliveries. Consumers who needed a car right away pivoted to used vehicles, sending used-car demand soaring.
Meanwhile, cars themselves have become more durable. Average service life has stretched to about 12 years. Instead of swapping cars at 100,000 km, more people keep them longer, which structurally reduces the flow of clean used cars into the market.
This short-term demand spike plus structural supply shrinkage created a perfect storm for price inflation.
A new wave of international demand: JDM culture and the “25-year rule” are wild

You can’t discuss today’s market without the global enthusiasm for JDM (Japanese Domestic Market) cars. In the U.S., the 25-year rule allows cars 25 years or older to be imported and driven with much looser safety requirements.
That rule—plus films like Fast & Furious and hit video games—turned Japanese sports cars into dream classics and investment assets worldwide.
Icons like the Nissan Skyline GT-R and Toyota Supra see huge price run-ups as they approach “25 years old,” with American buyers rushing Japanese auctions. Auctions have transformed from Japan’s domestic used-car marketplace into a global exchange for collectible assets.
Comparative analysis and testing the “value of money”
Then vs now in money terms: deflation vs inflation
If we compare prices, we also need to compare the value of money.
In the early 2000s, with deflation dragging prices down, a car hammered at ¥1,000,000 back then would feel even cheaper when converted to today’s price level. In other words, in real terms it was ultra-cheap, beyond the nominal figure.
By contrast, today’s high prices aren’t just inflation. The very structure of supply and demand has changed, and the weak yen adds fuel. Both “what ¥1,000,000 means” and the role of used cars in the market are fundamentally different now.
The decisive factors that separate past and present
Factor | Early 2000s (Deflation) | Today (2020s) |
---|---|---|
Economic environment | Deflation, weak purchasing power, stagnant economy | Inflationary tilt; historically weak yen |
Supply–demand balance | Short replacement cycles, ample domestic supply → oversupply | Longer ownership, new-car shortages → undersupply; excess demand |
Domestic demand | Practical, low-cost mobility option | Substitute demand due to new-car scarcity |
Overseas demand | Limited; mainly practical exports | Explosive growth via weak yen, JDM culture, and the 25-year rule |
Price formation | Driven mainly by domestic supply–demand; deflation kept a lid on prices | Linked to global supply–demand and FX; cultural/collector value surged |
Market positioning | Domestic market for “affordable transport” | International market for “assets/export goods” |
Conclusion and outlook
Why were prices cheap back then? — A comprehensive conclusion
In short, used cars were cheap because Japan’s market was trapped inside a deflationary domestic economy with a constant inflow of good-condition used cars, keeping the market contained within domestic demand.
Today’s high prices exist because structural supply shortages plus a historically weak yen have attracted powerful overseas demand, transforming Japanese auctions into a global marketplace for assets. The value of money, the value of cars, and the market structure itself are no longer what they used to be.
Where do we go from here—will this “bubble” pop?
When will these high prices ease?
New-car supply constraints (like chips) are gradually improving, and some segments are seeing early price normalization.
However—the weak yen persists, export demand remains near record highs, and more JDM models will qualify under the 25-year rule in the years ahead.
So it’s hard to imagine prices falling back to the “crazy-cheap” levels of the 2000s. Even if we see short-term corrections, the structural drivers—weak yen, global demand, shrinking domestic supply—remain intact.
Bottom line: expect used-car prices—practical models included—to stabilize at higher levels, while collector-grade JDM icons likely hold or climb further. In other words, price polarization will deepen.
Japan’s auction market no longer moves by domestic common sense alone. This is the new normal.

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