How Japanese car auctions work

1. What a Japanese car auction is

Most of the used cars that leave Japan are sold at auction, but not the kind of auction a private buyer can walk into. Japan's car auctions are wholesale sales between licensed members of the trade. Dealers, leasing companies and rental fleets consign their cars to an auction house, and other members bid on them, in the hall or over a member terminal. Nobody outside the membership bids, which is why buyers abroad, including you, buy through a member.

There are many houses, each with its own yards and its own inspectors. USS is the largest network, with Tokyo, Nagoya and Yokohama among the biggest single sales anywhere. TAA, HAA Kobe, JU, CAA, BAYAUC and ARAI make up most of the rest. Each house sells to a weekly calendar, so a car you miss this week has a counterpart next week, and a lost bid costs days rather than a season.

The rest of this guide follows one lot through the week: how it is listed, who inspects it, what a member sees before the sale, how the bidding runs, the four ways it can end, and what happens to a sold car before it boards a ship. It stops at the port. The Malaysian side, from the ship to your keys, is the how-it-works page.

2. How a car is listed

A seller consigns a car to a house, 出品 in Japanese, on a form that becomes the top half of its auction sheet: identity, mileage, colours, equipment and sales points, in the seller's own hand. The house gives the car a lot number and a lane, コーナー, which groups it with similar stock so that bidders working a lane know roughly what is coming. A regular lane carries ordinary trade stock; other lanes are set aside for particular kinds of car, and their names differ from house to house.

The seller also sets two prices. The start price, スタート価格, is where the bidding opens. The asking price, 希望落札価格, is the figure the seller will let the car go for, held by the house and not shown to the hall. The gap between the two is what the sale week is really about: a car whose bidding stops short of the asking price is not sold, whatever the last bid was.

Where the car is sold matters as much as what it is. A yard in Hokkaido or along the Sea of Japan coast sells cars that have driven on salted roads, and the corrosion that leaves is under the car, where no photograph reaches. We avoid the snow-region houses, Sapporo and Gunma among them, and the sheets guide explains the codes that give a salted car away.

3. The house inspects before the sale

Before a lot is offered, an inspector employed by the house, not by the seller, examines it and writes the bottom half of the sheet: the overall grade, 評価点, a letter each for the interior and the exterior, a panel diagram marked with damage codes, and free-text notes. That is the document the whole trade prices from, and buyers abroad bid on it because they cannot see the car.

An inspector has minutes with each car, so the sheet says where to look rather than whether to buy. Reading one is a skill of its own, and it has its own guide, from the grades down to the shorthand in the notes box.

4. What happens before a bid

Lots reach members ahead of the sale, with the sheet and a set of photographs behind each one. This is the window in which the work is done. Your advisor searches the week's lots against your brief and shares the ones that fit, and everything that follows happens before the car is called.

Two rules are applied before anything reaches you. We generally bid on grade 4 and higher, and we skip R and RA cars, because repair history follows the car to its next sale in Malaysia and the quality of the repair cannot be judged from a sheet.

Then someone looks at the car. Our buying agent inspects the shortlisted lot at the auction house before we bid, with the sheet in hand. The sheet says where to look, the walk-around confirms it, and a car that does not match its sheet is dropped.

Last, the number. You price the landed cost before you set a limit, not after, because the hammer price is only the first line of it. The calculator does the sum in about 30 seconds from the fields on the lot, and your advisor does the same sum with you. Then you agree a ceiling, and the deposit that puts your bid in the room.

5. How the bidding runs

On sale day the lanes run in lot order. Each car appears in turn, the bidding opens at the start price and rises in the house's set increments, from bidders in the hall and from members on terminals across Japan. When the bidding reaches the asking price the seller signals 売り切り, sell-through, and the car will go to the top bid. A lot is over in moments. There is no pause to think and no second chance on that car that day, which is why the ceiling is agreed before the sale and not during it.

Your limit holds. We bid up to it and never past it, and if the car goes higher it goes to someone else. Because the number was set with the landed cost in front of you, losing a car at the ceiling is the system working, not a failure of nerve.

6. The four ways a lot ends

Every lot leaves the sale with one of four results, and the Japanese term for each is what you will see on a result slip or hear from your advisor.

You hear the same day. When a bid wins, the hammer price reaches you in writing the day the auction closes. When it loses or the lot is passed, your deposit comes back in full and nothing else is owed. The next sale is a week away, so a new limit on the next matching car is a message, not a restart.

A passed lot can sometimes be reopened through the house, when the gap to the asking price is small and the car was right. Your advisor will tell you when one is worth it; most are not, because the seller who set the price will set it again next week.

7. After the hammer, still in Japan

A sold car does not leave the house that afternoon. The member settles the lot with the house, and the car is released from the yard once it has. It is then moved to the port of departure, and its Japanese registration is cancelled for export, 輸出抹消. The certificate that produces travels with the car, and it is the document that proves the car's identity and history in Malaysia later.

The recycling fee the seller deposited in Japan, the リサイクル line on the sheet, is refunded when the car is exported, which is why the amount is printed on the sheet at all.

Sailing and marine insurance are booked as soon as the car is yours, and you get the schedule the same week. Most cars reach their owner within 8 to 12 weeks of the winning bid, and the count starts here. How long a car spends between the yard and the ship depends on the house, the port and the next sailing, so your advisor gives you dates rather than a rule.

This guide stops at the ship. Clearance, duty, Puspakom and registration are the Malaysian side, covered step by step on the how-it-works page.

8. Not every lot is bid on

The auction networks also carry stock that is not auctioned at all. Beside the live lanes sit fixed-price listings, marked one price, where a member takes the car at the stated figure without waiting for a sale, and internet lanes that run to a deadline instead of a lane on the floor. Our own catalogue marks each lot with its type, because the type changes how you price the car and how fast you have to decide.

A fixed price means the number is the number: take it, or leave it for the next member. An auction, live or online, means a limit, a deadline and a result. Which route fits a given brief is a comparison rather than a rule, and the Japan page sets the two side by side.

9. Where a Malaysian buyer stands

You cannot join a Japanese auction house, and no amount of browsing will surface its lots. What you can do is everything else: set the brief, read the sheets, price the landed cost, agree the ceiling, and decide. The membership, the inspection at the yard and the bid itself are done by a member on your behalf, which is what your advisor is for. On the timeline above, this is how it runs.

• Before the sale: grade 4 and higher as the rule, R and RA skipped, and our buying agent at the house with the sheet in hand.
• At the sale: a ceiling agreed with you, bid up to and never past. A 10% deposit puts the bid in the room, and it comes back in full if the bid does not win.
• After the sale: the hammer price in writing the day the auction closes, the sailing booked as soon as the car is yours, and most cars home within 8 to 12 weeks.

The auction week is the part of an import we care about most, because it is the last point at which walking away costs nothing. Every car on your shortlist comes with its sheet, translated, and a number you have already seen.

10. Auction-day terms

The words on a result slip and in an advisor's message, in the order they come up. The inspector's own vocabulary, the codes and the shorthand in the notes, is in the sheets guide's glossary.