Everyone loves a bargain. Who doesn’t? We’ve all seen footages of what some people will put themselves through for Boxing Day Sales; sub-zero temperatures, snow, sleet, rain and wind to queue for umpteen hours through the night so that they are in prime-position for those bargains buys. Some have been even been killed in the stampede precipitated by the bargain-hunting frenzy. In short, we love our bargains, and by bargain, I mean acquiring something for less than their market value.
Most of us will be well-versed in finding great buys for everyday goods, such as clothes, electronics, and groceries, but what about cars – not the ones you see being sold locally, but the others that are being sold online from the other side of the world in Japan? Probably not as much. Read on for some inside information from the industry.
There are hundreds of car exporting companies in Japan, all exporting altogether thousands of vehicles every month to countries around the world. They source their vehicles from online Japanese auction houses where tens of thousands of vehicles are auctioned every day for bidding. They try to outbid the other, and the vehicles are bought by companies that bid the highest. They are then listed on the car exporters’ websites, sold to buyers overseas, shipped, and are then found whizzing around streets near you. So just how do you buy these vehicles at bargain prices?
Let’s start by comparing the Japanese market value of used vehicles with other developed countries’. You will find that Japan’s is remarkably lower, especially compared to Europe and USA. Take a 2005 Toyota Passo for example. One of these with very low mileage in excellent condition can often be sourced from Japanese auction for under $600. Yes – $600! How is it possible that such sought-after machinery can be purchased at that kind of price? The simple answer is, because the Japanese don’t want them. No demand means no value. Any vehicles that are older than 5 – 6 years are seen as “old”, and they are summarily sold to fund their next purchase of new vehicles.
Used vehicles from Japan are also favored for their pristine conditions too. The Japanese take very good care of their vehicles, and they also have to be put their vehicles through industry-leading safety and maintenance tests every few years to keep them on the roads. As such, Japanese used vehicles are cheap, reliable, and generally in very good condition.
How much you pay for a vehicle will obviously depend on various factors, such as manufacture year, brand, mileage, condition, model, among others. A 2005 Harrier will obviously cost much more than a 1998 March. But as mentioned previously, excellent condition 2005 model compacts such as Passo, Demio and March can be purchased at very low FOB (vehicle only) prices of under $1,000, and these will undoubtedly suit those who are working on limited budgets.
Let’s also talk about the timing of your purchase. If you time your purchase right, you can get a fantastic deal and get a bargain in a true sense of the word. All car-exporters purchase their vehicles from the auction with the premise of getting a healthy profit per each vehicle sold. However, their profit margins have diminished steadily over the years due to fierce competition from rival companies and market saturation. The average profit for a sedan-sized vehicle like Corolla is now only $100 to $200. If the vehicles fail to sell within two months or so, they start slashing prices aggressively to force a sale despite the loss. They do this because a) the market price will likely go down even further with time, and b) they incur even more loss in paying for storage.
A vehicle can become difficult to sell when it’s deemed as not-so-desirably by buyers. However, a perfectly good vehicle in very good condition and price might not sell, simply because of bad luck, or it’s not listed on a website that enjoys heavy user-traffic. The vehicle will then go unnoticed until a lucky buyer finds it being sold at a very attractive price. When you see a car exporter trying to sell-off a vehicle at seemingly below market-price, they are quite often making a heavy loss. Nevertheless, they persevere in order to limit further losses in storage and market devaluation.
One important advice to anyone who’s looking to import vehicles – be very selective of which company you buy from. The rapid rise in popularity of importing vehicles from Japan has unfortunately been accompanied by many cases of fraud, where fake “car-exporters” would suddenly go offline once they’ve received the funds from the senders. Some have lost tens of thousands of their precious savings as a result, so please take extreme caution when sending your money. Try to buy from trusted names – if you haven’t heard about them, search the net for their reputation, and try to find others who have purchased from them. A company’s reputation is very important, because there are many less-than-honest exporters out there who will purposefully hide the defects of their vehicles for the sake of profit. You will then go through hell when you eventually receive the vehicle, and be left out of pocket after paying for maintenance and repairs. An honest car-exporter will be fair and transparent with the exact condition of the vehicle before you make your purchase.
There really are great bargains to be found in the used car market, especially for compact hatchbacks as mentioned previously. Search and compare many sites for cheap Japanese used cars and you are bound to strike gold. Stay vigilant, patient, and order your dream car!