How to Buy a Car from Japan: An Insider’s Guide

James Reeves here with Aaron. You guys have seen Aaron before. He's my exporter. We're here in Tokyo right now in Shibuya. Shibuya. Aaron, I want to buy a car from Japan. Why would I do that? The main reason people buy cars from Japan is because they're looking to buy something that they couldn't get in their home country. Whether it's a dream sports car like a Japanese JDM Skyline or a Euro car that didn't come to the United States or it was maybe a model that did come to the United States like a Land Cruiser, but they didn't have diesel, so they wanted specific engines or just things that they couldn't get is generally the main reason why people buy cars from Japan. Not only do you have a broader selection, but the way cars are treated in Japan, it's a little bit different both from a personal owner perspective and a governmental perspective, like a regulatory perspective. So firstly, cars do have to have an inspection. Generally as they get a little bit older, it's every two years. So they are going through a certain process to make sure that they're growing legal. So that's one aspect of it. The other aspect that really makes it special, A, Japan, especially through the 80s, 90s and 2000s was a very rich country. Their big booming economy. So there was a lot of money being spent on cars. People in Japan really, really love cars. If you live in one of the big metropolises, you can't drive it every day to work because you have to take public transportation. There's really nowhere to park in certain areas of downtown. So you have a lot of special cars that had a lot of low mileage because they just weren't used except for maybe the weekends. So those two things combined make Japanese exports very appealing. All the cars I've ever bought from you have all been exceptionally low mileage, great condition. I haven't bought anything over 50,000 miles. Super easy to do, actually. I mean, it's relatively common to see cars that show up that are 25 years old, therefore importable in the U.S. that have super low mileage. But on top of that, there's a little bit of arbitrage happening because right now, especially 2024, the dollar is extremely strong to other currencies in the world, especially the yen. I'm saving money whenever I'm buying in a foreign currency. I got my Porsche 911 993. I could get one of those in the U.S., but like you said, I buy it from here. It's a rest of world model. It's better in other ways than the U.S. models, but at the same time, I'm paying less because I'm going through the hassle of exporting it, importing it. Everyone's convinced they want to buy a Japanese car or a car from the Japanese market. How do they do it with step one? Step one would be to obviously figure out what you want to buy and reach out to me and start a dialogue and we can, you know, see what your budget is, what your timeframe is, see what model you're looking for, and see if it makes sense. You know, if you want to buy a Porsche 993, but you have $20,000, probably should keep working for a couple of years and come back when you can, you know, when you can afford a realistic budget. Or you get a 924 or 944. Yeah, you might be able to change it up for something else. So, you know, that is the first step, get in contact with me. Let's talk about what your needs, what your wants are, what your budget is, what your timeframe is, and then we can see if it's realistic or not and makes sense and we can provide something to match that. I think this is a good point to talk about how the Japanese auction system works. It's tens of thousands of cars every week. I would say that there's probably 100,000 cars a week going through auction. And that's also what makes it attractive is you're not going to Craigslist, you know, you're not going to Yahoo. It's all available at the centralized location. Like online, you can see everything that's coming up for auction and you have access to that for you, somebody who's been doing this for a while. It's not that hard for you to find if it's available. Obviously, the more obscure model you're looking for, the more specific requests you have. If you want a Ruby Stone Red Porsche 964, it has to have red interior. It has to have less than 10,000 miles. It has to have this, this, and this. The more specific requests, of course, always it's going to be a harder sort of thing. But yeah, we have access to all the auctions in Japan. There's probably 100 different auctions, 100,000 cars a week. And sometimes it's luck of the draw if you have something rare, if you're looking for something more run-of-the-mill, you're going to have more opportunities and targets. It really just depends on what you're looking for. And if they put you on the hunt, it comes up for auction, you're going to see it. How much notice do I have? Whenever there's a model that comes up, that's exactly what I want. How much time do I have to make my mind up? So what ends up happening is the cars are uploaded daily for auction, but some cars could be uploaded as soon as just the night before. So you might have legitimately 10, 12 hours before they come up. So that kind of goes back to what we were talking about before, like how the process works. So once we start the dialogue, and what makes sense, we would need a deposit ahead of time. And once we have a deposit in, we can start actively searching and then inspecting and then bidding on cars for you. Once we find the car you're looking for, whether it's from auction or some other thing, especially from auction, they're more time-sensitive because they're all on a schedule. It's going to be on this day at this time. We discuss the car, the auction sheet, look at the merits of that car at that time. If it makes sense and you want to move forward even still on auction day, we can inspect the car, get photos, provide those to you, further discuss the car. And then if it makes sense, we can bid. Sometimes they're up late in the afternoon and you have more time to operate. Sometimes they're up really early. And then we can only get there so early, so we relay the information to you and you have to decide pretty much immediately, do you want to bid on this car or not? And here's where I'm going to brag on you a little bit because, I mean, we're personal friends. I mean, there's no, for what it's worth out there, you guys know, you guys know I'm sensitive about this. Like, you know, there's no financial relationship here between Aaron. He's just a good guy and he is, he is the best at his job. We were at the auction house yesterday. You're literally, literally on your hands and knees with your stupid ass hat and your knee pads checking customer cars. A lot of companies just rely on the auction sheet alone to bid on cars. What's the auction sheet? So the auction sheet is, is, is what ends up happening is all cars, when they enter the auction and almost all instances, they are graded by the auction and the grades might start from S, which means essentially showroom, new car, grade six, which essentially is also still showroom, five, four and a half, four, three and a half, three, and down to two. And some accident grades, which are stars. Not all cars match the auction sheet. So inspectors are human, they're busy just like anybody else. They're 70% accurate, but in some instances there have been definitely discrepancies that we found with the auction sheets versus what we see on the ground. So us checking the cars is an added layer of insurance to ensure that the car is what you're looking for. It matches the sheet, the condition is what you expect, and we just want to make sure that you have accurate information so you can decide. They do a pretty good job with those sheets, but there have been times where, I mean, especially you'll, you'll get like a three and a half, they'll grade it as a three and a half. You're like, well, that doesn't sound so good. You know, three and a half out of, out of six, it's not really that great. And you go and look at it, it's ----, man. This almost looks like a new car. The grading is subjective. Also some cars or some auctions, once they reach a certain number, certain number of miles, they can only get certain high of a grade. You're not going to have, you know, four and a half generally with over a hundred thousand kilometers. So they're going to be four or better or four or worse anyway at that point. So you have to just really judge each one on their own merit. And sometimes the auction grading is just sort of vague and generic. It might just say surface or rust underneath. Well, that could run the gamut from just a couple of specks of really insignificant rust to, oh, this thing's quite rusty and quite heavy. So because of the vagueness of it, and it's not super descriptive, these guys are pumping through a thousand cars. So they're just jotting down little notes. They're taking notes and they're generally pretty good, but they don't have time to write in this, you know, a paragraph of info about specific data points on the car. It's just rust, seat wear, you know, whatever it is. And we need to determine what is the level of that. It could be minor. It could be very, very bad. So we just need to make sure that it's good quality and we inspect ourselves or pay for inspections on every car that we buy. And I think that's a very, very important thing because relying on the sheet alone is a little bit of a dice roll. You're going to get bit. At some point, you're going to get bit. We find a car that we like. You inspect it. I look at it. I'm like, Aaron, this is good. And it's funny, I'm saying this because we've done this like three or four times, you know, so I'm familiar with this process now. I say, Aaron, it looks good. We go through that process. I buy the car. I've got the car. What's the next step? Once you win, we will invoice you within a day or so. Once we invoice you, we would really like payment within three business days. Once the payment is in, then it's a wire. I mean, there's no credit card. You are wiring money. Yeah, it has to be a bank transfer. There's no credit cards or anything like that. So once we get the money and we can verify that, generally, we could have most cars on a boat within a few weeks, maybe a month. How much does it cost to ship a car? It's going to depend on two factors. Where are you and what is the size of the car? It's going to be a lot different price if you're shipping it somewhere proximal and it's a small car versus a big car far. I'm buying a Corolla from LA. Yeah, if you're buying something like that, like a smallish passenger car and you're going to ship it to, let's say, LA port, it might run 130, 140,000 Japanese yen. If it's a bigger Land Cruiser or something like that, you're going to be over, you know, 200,000, 250,000. It depends on the height. If you have a standard height one or it's got racks on it, all that stuff comes into consideration because it's based upon the size of the vehicle. Shipping depends on your location, but you're two weeks to six weeks, depending on where in the world you are. So once it's booked for shipping, we ship it. The pertinent documents are provided to you. We send you the documents via DHL with tracking. And then you have your documents, your car will arrive, and then it's up to you and your area to obviously get it cleared, pay your taxes, registration. That's all on your side. I'm going to do you a favor here and talk about the first time you and I had a phone conversation when I bought that Subaru Sambar, man, I'm about to wire you, dude, I've never met before my wife. I'm about to wire you cash. I bought a cheap car, you know, but I think I'm sending you like $9,000, you know, because we've got a nice Sambar and, you know, it's like, how can I trust you? We have to make money, of course. This is a business to make money, but I want it to be a reasonably priced thing where people feel good at the end of the sale. I'm just whacking fees on top of everybody like some dealers do. People kind of remember that stuff if they're being nickel and dime, but we try to make it very, very simple. You know, it really, you're paying three different things when it comes to the purchase of the car. You're paying the price of the car, you're paying for our service, which includes inspections, courier fees, auction fees, some taxes, and of course, some profit. And then the shipping, we try to make everything very, very simple. The internet's out there. I mean, you know, so if you do something bad, people will f*** your ship. You know, I Googled you as well, you know, and I found that there are people that had used you. I'm like, okay, this guy, he seems legit. Once it's on the boat, it's literally out of the country, it's out of your hands, it's in the control of the shipping company, and it falls on the buyer, you guys, if you're buying one, to fulfill the legal requirements to get it in their country. So I, this is me stepping in as the lawyer in the United States. If you're buying a car in the U.S., make sure that it's federally legal, make sure it's legal in your state. In a lot of states, K cars are not legal. You cannot register them, you cannot title them, and that becomes a huge problem, especially if you ever want to sell it, or if you want to use it on the road. So I'm giving this info to you guys. Also, you have to do a lot of paperwork in order to import. So Aaron's the exporter. What does he do? He exports. You also need an importer. Now, can you import yourself? Yes, you can, you can do the paperwork. I am a contract litigator. I do not touch that ship. I don't do my own. I pay someone else to do it. You're going to pay fees, you're going to pay taxes whenever you go register it, sales tax at the local DMV, blah, blah, blah. So there are some things here that kind of add up. In the grand scheme of things, especially if you're buying an expensive car, it tends to be less of the overall proportion of the purchase, and that's also why I would like to encourage you guys out there, if there's a car you got your heart set on, Aaron finds one for you that maybe could be a little bit like the upper limit of your budget, you have all those costs that are going to be pretty much the same, no matter what. If you're buying a Land Cruiser with 100,000 kilometers or one with 40,000 kilometers, you're probably going to have the same amount of fees and paperwork and everything else. Yeah, it really is going to depend on the cost of the car and stuff like that you buy. Of course, a car that's $5,000 versus $50,000, you have some tax implications that are going to compound because it's more expensive. But yeah, it really is really important for you guys to know the laws and the rules of where you're buying. California is very different from other parts of the country. United States is very different. If you're watching from Canada, the rules are different. Like he said, even state to state, they're going to be very, very different as well. Just make sure you understand what you're buying. That's up for you guys to figure out. I'm an exporter. I'll sell you whatever you want. You're going to have a problem if you try to bring something in that's illegal, though. Well, Aaron, you're a wonderful exporter and a wonderful friend. Thank you for being on the program, talking to everybody, even though I do kind of hate you right now because I have got a soju-induced headache by ... What did we do last night again? We went to a ... house and they were doing ... jousting in a ... up ... hole with very large ... and it was quite entertaining. We had a great time. We drank too much and I'm looking forward to doing it again tonight.