How to Buy a Used Car in Japan

How to decide if car ownership in Japan is right for you and how to get your ride!

This is the TranSenz Guide on How to Buy a Used Car in Japan. The story of our car-buying experience is also available here, and we welcome you to add your comments below. Any useful comments we receive will be incorporated into this guide and credited to the maximum extent possible.

Deciding to Buy a Used Car

The Japanese lifestyle sometimes makes owning or using a car extremely inconvenient, especially in cities. However, it may be necessary for your job (teacher with multiple working locations), your community (hospital access), or your hobby (surfing or skiing). If you don’t have a go/no-go reason for buying a car, consider the following calculations, based on the formula found at this Japanese site, but modified for a 10-year old, used car that you purchased for ¥400,000 and will drive for four years.

• Purchase price/year: ¥40,000
• Annual tax (1.5L): ¥34,500
• Optional Insurance (任意保険): ¥ 50,000
• Compulsory Insurance/Inspections (車検, 自賠責保険, 重量税) annual estimate: ¥80,000
• Parking Space: ¥60,000
• Annual Maintenance Estimate (batteries, tires, washing: ¥20,000

You’re looking at about ¥285,000 per year, before you add gas.

Yes, these are rough figures, but roll with me for a minute. The website above then compares this figure to the cost of renting a car 20 times in a year at ¥90,000 per day plus 40 taxi rides of ¥1500. This is, of course, assuming that you use public transportation in both cases, whenever it is available, and that you only rent a car when it is absolutely necessary. (In the past year of living in Japan, I have never once found it necessary to rent a car). The rentacar/taxi fees add up to ¥240,000/year, ringing in ¥45,000/year below the before-gas price of owning. If you’re frugal, the thought of forking over the cash each time to rent or take the taxi will probably reduce your costs further.

Of course, if you’ve already decided on buying a car (we had a baby on the way when we decided to make the purchase, and cannot put a price on the safety benefits of having the ability to drive to the hospital any day or night), read on. This is, after all, a guide on How to buy a used car in Japan, not a manual on “Why you shouldn’t buy a car.”

Searching for your Used Car

In Japan, people seldom opt to sell cars directly to another person. Going through a dealer, usually as part of a trade, means that the dealer takes care of all the paperwork. Most sellers reckon that trading in their car at a dealership is worth whatever relative losses they might suffer, since the dealer takes care of the paperwork. There are a few possible exceptions: if you know someone at work who is upgrading, and you’re close enough to propose a direct purchase from them; or if you live near/ can get to a US military base in Japan, where the economy is decidedly more American-style, and servicemen and women tend to sell their vehicles directly. In either of these cases, this guide may not help you much.

Local business web presence is nearly non-existent in Japan, as of this writing, and local business presence in English is practically a dream. (Specifically, it’s TranSenz’ dream to sell business website translation services to help make Japan more accessible to foreign residents.) However, there are a few large search networks, including carsensor.net and goo-net.com. In Japanese, of course, so you’ll need a bilingual friend for this and several other steps in your purchasing process.

Warning: The price you see on the webpage is “just the car,” so it is significantly lower (¥100,000 – ¥150,000) than the final sale price, once all the taxes and registration are added in!

Once you’ve narrowed down your search on the big networks to a few cars, try to see if the advertising dealerships have their own website. The contact info listed on the network page is usually for the network’s phone banks and the access information is mediocre at best. Plug the physical address from the car details page into google to see if the business pops up, then get the direct contact info there.

Visiting the Dealership

Most dealerships are not conveniently located for customers who do not already have a car. If you do not have a ride, try calling the dealership to “ask for the best way to get there,” a tongue-in-cheek way to ask if they will pick you up at the station. I wouldn’t do this unless I was seriously thinking about making a purchase there, though, because it would increase my personal feeling of obligation.

Unlike an American dealership, you can roam around the lot on your own without being accosted by salespeople. Kick some tires, pop some hoods. If the car has seat liners and a paper mat by the pedals, sit inside, if you like. The salespeople are watching you, but if they don’t approach, you may have to go make eye contact with them to signal you’re ready to begin talking.

If you’re still outside, you’re not negotiating yet, you’re just building a relationship. You may not even be talking to the person that you will negotiate with later, so save your hard sell tactics for when you’re seated with tea. In most cases, you will not be able to test drive the cars, since dealerships acquire them with the shaken insurance runs out (a good time to sell) and don’t renew the insurance until the day you take it home (so as to give maximum benefit to the buyer). So, most cars on the lot cannot go be driven on the street.

What to look For

By this time, you should know what cars you’re interested in from your web search, and should know what features you want. The cars will generally be immaculate, inside, outside, and engine. Look for scratches that you weren’t able to see online. Double-check the features listed on the windshield, and try not to be distracted by features like shiny navigation systems (they’re probably out of date, anyway) or “fully aero,” which means the car body has extra bits of plastic to increase the aerodynamic flow, which might improve fuel efficiency, if you’re travelling over 100km/h.

Some dealerships will have detailed inspections of the car, including marks of where all the scratches are located, what parts have been replaced, and whether the car has been in an accident. The accident history is not always 100% accurate- your dealer should mention this (it’s a CYA mention for them, just disavowing responsibility for the accuracy of the report). To an American observer, Japanese cars seem to have an obscenely low mileage for their age, so don’t be too surprised there. But before you go thinking, “I can drive this car to 160,000 km, without breaking a sweat, keep in mind that 100,000 km is the prescribed point for changing the timing belt, which will add a nice extra ¥100,000 to your biennial shaken, at that point. (If your vehicle of choice is a “sport package” it might have a metal chain, which changes somewhat later).

A note on color: Silver is apparently a popular color for new cars in Japan (it hides dirt better), but black and white are the most popular used car colors. Bright colors are also popular for sporty cars. The color can affect the price, so a silver car in a competitive market, sitting back off the main viewing area, will probably be cheaper- or more negotiable- since it’s more challenging for the dealer to sell.

The Estimate and Negotiating

In general, Japan is not a negotiating society, but car purchasing is an exception, so do not be embarrassed to haggle. As with your realtor, the dealership will ask you to list your target price range, as well as make, model, and features. If you’ve already narrowed your options to one or two of the cars on the lot, this is merely a formality. But, if you weren’t able to find anything, you can still fill this form out so they can look through their not-quite-ready stock of vehicles and contact you if anything else comes in.

While you’re filling out the form, and working on your cup of negotiation tea (save some for poignant sipping pauses later), your salesperson will be prepping the 見積もり (mitsumori), or estimate. When this hits the table, it is the first salvo in the negotiation phase. The dealer has probably added several “recommended features,” and the price is about ¥150,000 higher than what you saw in the car window. Step one is to look through these features and separate the requirements from the chaff. In addition to the number that was on the windshield outside, here are some things you might see:

• Inspection Registration Proxy Processing Fee (検査登録(届出)手続代行費): Mandatory. Should be in the range of ¥20-25,000
• Parking Registration Proxy Processing Fee (車庫証明手続代行費用): Optional. Should be in the range of ¥10-15,000. For instruction on how to do this yourself, for free, see below.
• Delivery Fee (納車費用): Optional. ¥5000-6000. If you pick up your car yourself, this is free.
• Trade-in Processing Fee (下取車手続代行費): Mandatory. Processing fee for trade-ins, ¥10-15,000
• Vanity Plate (希望ナンバー申込手続代行費用): Optional.
• Car Tax (自動車税): All taxes are mandatory. Varies by engine size. See the left column for the annual rate for personal vehicles.
• Weight tax (自動車重量税): Set by vehicle weight. Should be ¥8800/2 years for a kei car and ¥12,600/half ton/2 years for others.
• Acquisition Tax (自動車取得税): 3% (kei) – 5% (others) of the purchase price plus all the fees listed above.
• Compulsory Insurance (自動車賠責保険): This insurance is mandatory, but covers next to nothing. About ¥25,000/2 years for a regular car and ¥22,000 for a kei.
• Registration (検査登録): ¥3000-6000. Not the processing fee above, this is the actual registration fee. More pricy for custom plates.
• Parking Registration (車庫証明): ¥2000-3000, depending on locality. (The dealer’s rate will probably be set by the highest city rate around).
• Recycle Fee: (自動車リサイクル料金): ¥10-20,000. You have to prepay the fee to recycle your car.
• Dealer’s Maintenance Package/ Extended Warranty: Beware of other sneaky fees. ¥16,000 for a year of oil and wiper blade changes is just silly.

At this point the car is probably sitting at ¥100,000 higher than the sticker price, if you’ve whittled the list above down to the minimums. If there is an additional charge for Shaken (車検), get up and walk out now. Any reputable dealer will include that, if it’s time to get it done. If you are buying a car with only one year of Shaken validity left, then use that as part of your reasoning for a lower price.

It is not unreasonable to try to get the price down by 10%, plus get some extras thrown in. The first time I purchased a used car in Japan (shadyish dealer by a US military base- buyer’s market), I talked a ¥350,000 car down to ¥300,000 plus a new CD deck. Most recently, I talked a ¥500,000 car down to &460,000 plus four new tires, despite protests that the company had a “one price” policy. Paying up front, in cash or bank transfer, definitely seems to facilitate dealers’ willingness to negotiate. I don’t know if this is a good or bad performance record, but it’s all I have to go on. Add your comments below!

Getting your new (to you) car home

Not so fast. Unless you already have your 車庫証明 (parking certificate), then you’re going to be waiting at least a week or two before you can pick up your car. Getting that certificate takes at least a week, regardless of whether you do it or the dealer does it, then registration takes a couple days as well. If your dealer waited until the sale is concluded to do the 車検, as they should, they’ll do that in the mean time, too.

車庫証明 Parking Certificate

Save yourself ¥10,000+ by registering for your parking certificate yourself. To get your parking certificate, first you need a parking spot. If you own a home with a parking space, this is no problem. If you rent a house with a parking space, you’ll need a letter of authorization from the owner. If your rental contract doesn’t include parking, you’ll need to rent a parking space from somewhere in your area and get certification that you can park there. You will also need a 実印 jitsuin, the most official level of seal. If you do not own a jitsuin, or have not registered it yet, this would be a good time to do so, as this can be useful for other necessary processes in Japan. Some places may accept a “certified signature” from your consulate (the equivalent, for non-stamp-carrying cultures), but the jitsuin is probably cheaper and easier to get. Here are the necessary forms:

• 保管場所使用承諾証明書: If you are renting a parking space or renting a mansion/house with a parking space, you need this form to demonstrate authorization from the owner. Make sure your name is written exactly as it is on your jitsuin registration or certified signature form.
• 自動車保管場所証明申請書: This is the actual application for your parking certificate. Again, your name must be in the same form as on your jitsuin or signature card.
• Map to your parking spot & drawing of parking spot with approximate measurements.

You should be able to get all the forms from your dealer and take them to your city/ward’s police station yourself. Once you turn them in, you’ll have to wait a week to pick up the certificate and sticker. Deliver/mail everything you got back from the police, plus a copy of your jitsuin certificate (get from your city hall or ward office) or certified signature card. Congratulations, you’ve just saved a nice chunk of change.

Other Insurance

You’re going to need another variety of insurance, as well, to have any real coverage at all. Your dealer can probably provide information about one or two recommended companies. Insurance companies are national and legitimate, so the rate will not vary much from place to place. It may change based on your coverage, though. For a couple, expect something in the ¥70,000 range per year.

Thank you for reading the guide. If you have any comments, we invite you to post a comment below.

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