Big-city auctions v. regional car auctions
Here’s something I often hear from car importers:
“I’m not interested in any of those out-of-the-way auctions. I just want to buy from USS Tokyo or one of those big-city auction houses so that I don’t have to pay so much in transport to get the car to the port.”
Now, I can understand what these importers are thinking. Their point is that they want to keep as much of their budget to spend on the car itself.
If they can get they get the car at an auction near the port at auctions like HAA Kobe and spend just 8,000 Yen on transportation — that’s going to be 36,000 Yen more towards their budget for the car itself than if they bought a car up in Hokkaido, for example, and had it transported for 44,000 Yen.
So, yes, I get what they’re thinking. But I also know they’re missing out. They are missing out on good cars, and even saving money on their final FOB cost.
How so?
Well, think about the very nature of an auction. It’s all about competition. The more people competing, and the higher prices are likely to go.
Where do you find most competition?
The big city car auctions
Who do you find in these big-city auctions? First of all, you get a lot of local domestic buyers — Japanese car dealers looking to get more stock for their dealerships. Remember Tokyo isn’t just one city — it’s really a huge metropolitan area, an urban “blob” that merges with Yokohama, Kawasaki, Chiba and Saitama to name a few cities. This is one of the biggest urban areas in the world with 35 million people living there. That’s a lot of people — and a lot of local used car buyers.
And it’s not just the domestic buyers you’re up against in these big-city car auctions. There are the exporters as well. People in the same business as Integrity Exports buying cars for their overseas customers. In fact, many of our smaller competitors will only attend these bigger auctions in these large urban areas.
So where does that leave you? Well, buy in a big-city car auction and you’ll save on transport to the port, but you may well have spent more on the car itself because you’ll have had to battle more people to get it.
What about these regional car auctions in Japan?
The situation away from the urban sprawl is the opposite to how things are in big-city auctions like USS Tokyo. Okay, it's not all l the green rural idyll you can see in this photo. But there are fewer people around in general. Fewer people means fewer domestic Japanese buyers and not as many exporters either. Fewer competing bidders means weaker competition. The result? The same car is likely to sell for less than it would in a major city auction.
Then, on the other hand, these regional car auctions are further from the ports, so the cost of transportation is higher. Usually just a few tens of thousands of Yen — but higher nonetheless.
I remember one of the best deals I ever got for any customer was a Mini in Okinawa. Getting it back to the mainland for shipping was fairly expensive — but the car itself was so cheap the final FOB price still worked out to be a great deal.
So, what’s the takeaway — which auctions should I focus on?
That’s easy... all of them! Wherever you buy, there’s a trade-off. Either the car itself is going to be a bit more (but the transportation less), or the car will cost less (but the transportation be a little more). It all evens out in the end.
Our online bidding system helps you to take advantage of this opportunity: You get access to over 120 used car auctions all around Japan each week. From the colossus that is USS Tokyo on Thursdays, right down to tiny auctions in out-of-the-way places, like JU Okinawa.
Bid on the cars you want – don't worry about where they are. Tell us what you want to pay as the maximum FOB price, and we will calculate your maximum auction price bid. Easy, hey?
What do you care how much goes on the car and how much on transport? At the end of the day all that matters is getting the best car at the right price.
(Have any questions about buying cars at Japan’s car auctions? Email us and we will be happy to help.)
We find that the most successful importers really understand how it all works - from the auction to the ship and beyond. Don't get left behind!
