Why So Cheap!

Japan has the second largest domestic automobile market in the world, with the five premier manufacturers (Toyota, Nissan, Honda, Mitsubishi and Mazda) competing passionately for business through large and far-reaching new and used car networks.

To encourage domestic sales, most automobile models undergo a complete model change every four years with slight front and grill changes every two.

All new Japanese cars are sold with a three-year "shaken" (warranty of fitness) which must be renewed after expiration at an average price of US$1,500. A renewed "shaken" is then valid for 2 years, but must be renewed every two years for the life of the vehicle.

Therefore, most vehicles available on the used market are 3,5,7 and 9 years old as they are commonly traded in or sold by the user when the "shaken" expires. Acquiring vehicles with 6 months or more valid "shaken" boosts the value of the vehicle domestically and conventionally is more costly than cars with no "shaken" left.

Consumers in Japan are required to provide proof of parking space for every vehicle when registering new and used cars. This is compulsory and scrupulously controlled to the extent that in most areas police will physically measure the parking space to ensure it is appropriately sized for the intended vehicle.

Due to acute land shortages in Japan, private parking costs anything from US$100 to $500 a month for those who don't have space at their homes (a majority don't!).

These types of expenditure make two-car households the exception and severely limit the number of cars on the road. All these elements and others (including strict taxes) make new car purchases very appealing to consumers and contribute to sharp depreciation rates on used cars domestically.

It is this very steep depreciation which make used cars in Japan economical enough to be viable for export throughout the world.