Sunday, 6 November 2011

Exactly Why Japan’s Car Auctions Trump Sourcing from A Car Exporter’s Stock

Now, if you have done any amount of research into getting used cars from Japan then you will surely have come across these two models.

There are the Japanese car exporters who have used vehicles in their yards ready for people to buy. Then there are the other kind of exporters that get vehicles straight from the Japanese car auctions. Obviously, there are some that have both stock cars and also buy from the auctions, but even these companies usually have their focus on one of these sources rather than the other.

So which is right for you? This is exactly what we are going to look at below.

By focusing on how the Japanese car auctions are different, I expect the difference between these two methods of getting cars from Japan will become clear.

Before we go any further, let’s be clear precisely what we are discussing here. I am certainly not talking about a traditional auction where all the bidders are together in 1 room before an auctioneer with a gavel. However, these car auctions are also in no sense like the auction format popularized by online corporations like eBay that can take days to run their course.

The car auctions in Japan are a unique blend of the speed of a traditional auction – accelerated even more using modern technology – with the freedom from geographical constraints that the Internet affords.

Bidders could be present at the auction itself, or they may be far away in a completely different area of Japan. Also the bidding is incredibly fast, with each person bidding either making use of a joystick-type device or a PC mouse to place bids.

Cars are sold every few seconds – and a large auction like USS Tokyo may have as many as 10 “lanes running simultaneously in each of which bidders are bidding on multiple cars.

Now you are clear as to how these ##LINK## operate, let’s move right on to why you should be interested in getting together with a used car exporter who will get your cars from them.

Assuming you have been paying attention at all, you should have gained some idea of the incredible scale and speed of these auctions. Remember cars are sold every day six days a week and these cars are being auctioned every few seconds throughout Japan.

So, as I am sure you have now figured out, we are talking about 10.000s of used cars being sold daily.

So, what does this mean for you as the potential buyer? Well, it means a gigantic amount of options. Why is choice important? Well you get a variety of benefits.

First, it means you are more likely to find the perfect car.

Even a car exporter with a large amount of stock could have just a thousand or so cars available. Of these, maybe 20 are the model you are looking for. But then try to narrow down further to a particular year, a particular mileage, or a particular color, and you will quickly find that it is almost impossible to find this precise car in this company’s stock. You are much more likely to find it in the auctions where the variety is bigger.

Something else about choice is that it gives you the chance to skim off the best cars at the lowest prices. This is especially valuable if you are buying in bulk.

Just think about it: Say you are after a car particular year which has up to a certain number of kilometers on the odometer. And let’s suppose that there are typically between 10 and 20 cars in the auctions each day that meet these requirements. You also know, that cars of these specifications usually go for 345,000 Yen to 515,000 Yen.

So, what do you do? Simple: You bid on all these cars each day, but you set your maximum bid at, say, 380,000 Yen. This is a low bid, but it will have a possibility of the occasional successful result.

It is enough for you that you buy the lowest price ones that reach your specifications – and this is how the diversity at the auctions can help you do it.

Each day you may lodge ten to twenty bids and still end up with just one car bought. But, there lies the beauty of this system as every car you get will be in the bottom 5 to 10% of the price range.

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