Japanese Used Car Auction related costs

Most Japanese companies exporting cars to different countries add FOB to the final price of the car to be shipped. For the Japanese companies exporting cars, FOB means “Free on Board” and includes all expenditures of the Japanese car dealer. Same applies to the used Japanese cars purchased from Japanese car auctions

In general, a total cost for a used vehicle or other machinery purchased from Japanese car auctions is comprised of the following fees:

1. Car successful bid price at the auction
   Prices at Japanese Car Auctions are unpredictable. Even if three-month statistics provide data for average price of the specific vehicle actual successful (winning price) may differ depending on demand, seasonality and other factors. Car successful bid price is the last highest bid made by Japanese Car Dealer. It may be lower or higher than the “wish price” of a customer.
2. A 10 % Japan’s sales tax
   The Japanese Government imposes 8% sales tax which is calculated as a percentage of the final price of any transaction/purchase made by final consumer. In case of a car purchase it is 8% of successful bid price and is added to FOB price
3. An auction fee (depends on Auction House)
   Every single Auction House in Japan charges auction fee for sales and purchase of the car to be auctioned on that specific Auction house. Payment amount varies from one Auction House to another one. Japanese Car Dealer who acts as an agent for its customers pays the fee and includes to FOB price.
4. Recycle Fee
   According to the Japanese Law on Reclamation of Reusable Resources from End of the Life of Automobiles to prevent unlawful dumping and improper disposal of end-of-life vehicles. Fee amount depends on size, age of a vehicle and other factors and it is bigger for the western-made vehicles
5. Delivery cost from the Auction House to dealer’s office or parking lot
   There are over 100 Auctions throughout Japan. The distance between two remote Auction Houses (JU Sapporo and JU Okinawa) is over 3000 kilometers and delivery of vehicles from Auction Houses may vary from few thousand Yen to tens of thousands Yen. Japanese Car Dealers try to buy vehicles from the nearest Auction Houses to make the final price for vehicle a bit cheaper
6. Deregistration of the car and an issuance of Export Certificate for each vehicle takes a lot of time rather than money. A person should go to the company registration’s local district road police headquarters to fill out several documents and within an hour or so obtain needed document. PLEASE NOTE, that Individuals cannot have export certificate issued as only companies which have export license are entitled for issuance of export certificate
7. Vanning and loading into container
   Price for vanning and load into container depend on availability of infrastructure, machinery and equipment and existence of own container terminal. While some Japanese Car Dealers do it by themselves, some other Dealers outsource this operation. In most of the cases it is safer, faster and cheaper if everything is done by Dealer itself.
8. Cost of delivery to a port of shipment
   Again, if the dealer own its own carrier trucks then cost of delivery to a port of shipment is cheaper. Sometimes outsourcing can be cheaper than doing it on your own when economies of scale kick in
9. Load onto the vessel
   Cost of load onto the vessel is almost standard around all ports in Japan. Lead time is crucial where companies with large volume have more flexible arrangements with forwarders and customs
10. Japanese Car Dealer’s commission
    Japanese Car Dealer’s commission/profit highly depends on frequency of the shipment to the specific customer and number of vehicles to be shipped to the specific customer
11. Sea/Ocean Freight cost and insurance (It is not firm who bears these payments. Large companies may pay them and include it in the final price of the car)
    Sea/Ocean Freight cost and insurance are totally depend on distances covered and shipping line prices and may vary from on line to another one

Final cost for the car shipped to other countries may include (note that Japanese Car Dealers do not bear these costs):

• Unload of container/car from the vessel
• Storage in container/customs terminal if unloading is suspended due to the customer’s fail
• Payment of customs’ fees and other import dues and payments
• Transportation from port of unload to the final destination
• Registration of the newly arrived vehicle in the customer’s country

Regular way of calculating total for purchases from the auction would be 1. Car price  + 10% consumption tax  + 2. Auction related costs ( auction fee, recycle fee, delivery from auction to the port or place of loading = roughly 60,000 yen (550 usd) depending on the distance from the auction + 3. FOB and Shipping cost to your country (actual fee charged by shipping company together with customs and export documents from Japan side + 4. Agent commission 45,000 yen ( 400 usd).  Volume discounts are available for bulk buyers