Auction
Information
How
We Work
Auctions
Searching at auction
Auction grading system
Factors affecting price at auction
The Kobe Auction
How
We Work
You may notice that we operate a lot differently to some others
out there. The sad fact is that despite all the promises, some
others in the industry take a long time to locate suitable vehicles
and often don't know what the vehicle is going to look like
until it arrives in Australia. Sometimes they will take a large
deposit up front to buy a suitable vehicle for you, then they
find the cheapest vehicle they can to suit you, then import
that and clean it up when it gets here. This maximises their
profit. It is only until you have waited 3 months for a promised
car to arrive and are having difficulty retrieving your $10,000
deposit that you realise your error. Of course, finding the
cheapest vehicle in Japan usually means that the quality is
not what you would choose yourself. We don't work this way.
We find our customers the quality of vehicles that they ask
for. We charge a small fee which is more than paid for by the
cost savings that customers make. We realise that circumstances
may change, so if a customer wishes to have a refund of the
$1,100 service fee at any point we will direct credit a 90%
refund to their account the same day, no questions asked.
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Auctions
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The
auctions are where almost all cars in Japan are sold.
There are few private sales due in part to the complexity
of vehicle deregistration paperwork. Most cars are traded
in at the local dealership, and the dealer then puts them
in auction if they are not suitable for his yard.
There are vehicle wholesalers as well, which sit in the
middle and sometimes sell direct to foreign buyers for
international export, but most cars still go to auction
to be sold. The auctions themselves are full almost entirely
of dealers and foreign buyers, some buying, some selling.
Few private people attend the auctions for the reasons
above, and to make bids you must have a buyer's licence
for which there is an annual fee.
The auctions don't work like they do in Australia, where
we have a week or at least a few days to look the cars
over before the auction happens, then an auctioneer runs
proceedings to take bids and sell the vehicles. Things
are done much differently in Japan. If you can imagine
more than 60,000 cars being sold in an average week in
all the auctions across Japan, this gives you some idea
of the scale, and how little time there is to act.
Thousands
of vehicles are parked in giant car parks around the auction
building and sometimes car parks near the auction are
used to which a bus service periodically runs to take
the buyers out to inspect the vehicles. The auction building
contains a large hall, filled with computer screens and
seats.
Some
of the larger auctions have more than 1,000 terminals
where bids can be made. Registered buyers have an electronic
card like a credit card, that they insert into the slot
at their terminal. They have a button to push, allowing
them to bid in 3,000 yen increments. A couple of auctions
now use 5,000 yen increments, which allows the price to
go up faster (and I suppose on average makes the auction
more money).
Bids
are made by pushing the button shown in the pictures.
There are different codes and colours used to denote whether
or not the car has reached it's reserve price, and the
screen shows when this occurs (usually by a red light
changing to green). Everyone then knows that the car is
going to be sold to the highest bidder.
Sometimes vehicles will pass in and not be sold that day
as they did not reach their reserve price - the minimum
price the seller wanted. Often the reserve price is secret
as the seller doesn't want anyone to know what it is as
this could affect the sale price.
As
soon as the reserve price is reached, bidding continues
and once the pace slows down and several seconds elapse
since the last bid, the person that pushed the button
last wins the car and the appropriate funds are withdrawn
from their account. (This is why we ask for our $1,100
service fee in advance.) After the auction the buyer can
get a print out of all the cars they bought that day.
Vehicles are split into different categories for auction,
for example there is a "European car" section,
and an "accident damaged" section. They also
have a "dress up" section for all the special
cars with modifications and big bodykits etc.
Most auctions work on two "lanes" of cars being
auctioned at the same time, which means that odd and even
numbers in a vehicle category are split between the lanes.
Some large auctions have 3 lanes and a small number have
4 lanes of cars all being auctioned simultaneously. This
is to allow the cars to be auctioned faster, and can be
very confusing if two or more cars that a buyer wants
to bid on come up all at the same time on different lanes.
As a matter of interest, the auctions are all competing
between one another to get the most cars, as they of course
charge an auction fee on each sale. Many auctions have
pretty girls in short skirts handing out the auction lists
and pencils for the day (sorry, I have no pics of these
!). Apparently this attracts dealers to one auction over
another ? Surely, men are not so easily persuaded....
Once the buyer has bought a vehicle for one of our customers
we provide the customer details for an invoice and advise
shipping instructions. They take care of all the paperwork
in Japan and transport to the wharf. The vehicle is booked
to sail on the next available vessel to the Port in Australia
nearest the customer.
Vehicles arrive in Australia within about 3 to 5 weeks
of being purchased, depending on shipping schedules. Customs
clearance, compliance and registration then take place
to get your car on the road. We recommend very reliable
contacts for all aspects of the process, that we use all
the time and take good care of our customers. Customers
have complete control at all times and pay all costs in
the process direct to the supplier involved, thus saving
as much money as possible.
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Searching
at auction
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Once
we receive the service fee and disclaimer then we inform all our
buyers of the description of vehicle you are looking for, and
the information will be provided to you for cars as they come
up at auction. Whenever possible we will provide you with pictures,
however much of the information during the week will take the
form of a full description only, relayed to you by telephone.
The best pictures we are able to supply from auction are for vehicles
at the Kobe auction on Saturday. Our buyer inspects the cars
on Friday and you receive details and pictures on Friday night
by e-mail. You then have all night to consider your options before
the auction on Saturday. This is the most time you will get to
consider auction vehicles, and during the week things will happen
much more quickly when vehicles come up.
We
have numerous buyers covering nearly all of the large auctions
across Japan. Click for details of AUCTION
COVERAGE. Buyer’s or agent’s fees range from 75,000 to
95,000 yen, payable to the buyer by telegraphic transfer together
with the auction cost of the vehicle (auction price + buyer’s
fee = FOB price)
within 3 working days of purchase.
While
you are searching for the right car we are helping you to determine
where you will obtain compliance, and priming the customs agent,
compliance workshop, and others in the chain to expect your vehicle.
Once the vehicle has been purchased we will ensure that all the
paperwork that needs to be completed ahead of time is addressed,
so that your car can be cleared from the wharf as soon as possible
after arrival.
We
will keep you informed along the way and give you plenty of warning
as to when payments are due and to whom. We will provide guidance
as necessary to ensure that the process goes smoothly and you
understand the things that you will need to organise (e.g. collecting
the vehicle from the wharf, compliance, registration and licencing).
We
are also available to supply any assistance you need, 7 days per
week, 9am to 9pm WST.
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Auction
grading system
All
cars sold at auction are given a grade. This ranges from 1.0
to 5.0, with 5.0 indicating ‘as new’ condition and 1.0 indicating
‘very poor’ condition. In reality, condition ratings seen at
auction generally range from 3.0 for cars that are pretty rough
to 4.5 for something in immaculate condition. Often interior
and exterior condition are graded separately, and sometimes an
A, B, C, D system is used for interior grading, with A being the
best. Rated 0 cars are those that have been accident damaged
and repaired. For more information, see ACCIDENT DAMAGE.
Each
auction has it’s own variation of the grading scheme based on
these basic guidelines, for example, a grade of C in relation
to the exterior can mean that some bolt-on panels or spoilers
have been changed. While it is important to recognise that grading
systems vary widely across Japan, some general grading guidelines
are provided below for reference:
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Exterior
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Comment
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Interior
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Comment
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5
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As
new with no condition faults
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A
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As
new with no condition faults
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4.5
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Very
clean, one panel affected by minor paint blemish
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B
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Slightly
dirty
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4
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One
to two panels affected by minor paint blemishes
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C
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Clean
but with cigarette burn/s
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3.5
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Two
panels affected by paint blemishes and minor panel work
required
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D
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Cigarette
burns or dirty interior
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3
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Rough
overall condition with numerous blemishes on several panels
and work required
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2.5
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Rough
panels and paint all round
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2
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Some
serious panel damage
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1.5
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At
the absolute limit
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0
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Accident
damage and repair
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For
cars over 5 years old you just don’t see many grade 4.5 examples.
This is because it can take only a scratch or a pin dent to mark
them down to a 4.0. Grade 4.0 is considered in very good condition,
with a couple of minor interior and / or exterior blemishes.
Grade 5.0 you only tend to see in vehicles no more than six to
12 months old with very low kms because it denotes a vehicle in
virtually new condition with no condition faults whatsoever.
Grade 3.5 means several blemishes inside or outside, and these
can consist of small dents or scratches, cigarette burns or requires
cleaning. Grade 3.5 vehicles are often very good, yet they require
several items repaired or some minor attention to paintwork.
Auction grading varies also, with some auctions grading hard and
others easy. Something else important to note is the fact that
a large number of aftermarket modifications can mark a vehicle
down in the grading. Having a large number of modifications can
mean that a professionally modified vehicle with intercooler,
blow-off valve, bodykit, mag wheels, boost controller, momo steering
wheel, additional gauges and aftermarket sound system etc. may
be marked down from a 4.0 to a 3.0. The car may be excellent,
and in this case relying solely on the grading would be deceptive.
Accident
grade cars (or grade 0) can also be very good, providing the damage
has been only minor and has been repaired to a high standard.
Sometimes auctions will give a further rating for grade 0 vehicles
out of 150 points, where the lower number means a less serious
accident. The fact that a car has been damaged and repaired,
even though possibly minor, means that it is graded 0 and does
not receive a normal grading. For example, an otherwise grade
4.0 vehicle may have suffered a 10km/h rear accident rendering
it a grade 0 due to having the rear bumper and lights replaced.
This car may be straight and very clean all round, with no residual
evidence of the accident, however it is graded 0, and (on average)
this will reduce the auction sale price. In any case, we always
supply the customer with complete information about the condition
of vehicles at auction, and they are then able to make an informed
decision on a case by case basis.
There
is much more to buying a nice car than the auction grading. This
is where the experience of the buyers comes in, and their overall
impressions of the vehicle and whether blemishes that have marked
down the grading are minor or serious.
Sometimes
vehicles in stock available through our suppliers in Japan have
been obtained wholesale direct from Japanese dealers, and have
not been bought at auction. These have never been graded and
do not have an auction sheet, yet are still excellent cars.
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Factors
affecting price at auction
Main
factors on price are transmission type, previous accident damage
and repair (we can locate vehicles that have had only minor damage
and have been very well repaired so that you can't tell from normal
visual observation), condition, and kms. Buying something with
close to 100,000 kms is also a good way to save several thousand
dollars at the end of the day.
The
colour makes virtually no difference to the auction price except
if there has been a full colour change and the engine bay is a
different colour. Accident damage and repair and exterior paintwork
blemishes definitely reduce the price, however by the time the
cost of paintwork is factored in it is usually more cost effective
to buy a vehicle with better paintwork originally.
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The
Kobe Auction
Pictures
and details of vehicles from the Kobe auction are sent out to
the mailing list each week, showing a sample of the cars coming
up for auction, and what they sell for. An update showing the
actual sale prices is sent to the mailing list within a few days
of the Saturday auction. It's all about demystifying the auctions
and the process, and demonstrating to our customers that we know
what we are talking about and really can find vehicles to suit
their specifications at excellent prices - we're not just saying
that.
More than that, we are concerned about educating the public and
being entirely honest about what cars cost. We put the choice
in their hands as to what they want and how much they want to
pay. Our service fee is fixed and transparent, so it is then in
our own best interests to find the best vehicle we can to suit
the customer's requirements and budget.
The Kobe auction happens each Saturday with inspection possible
on Friday. Our buyer goes to the auction on Friday afternoons
to check over the vehicles and take pictures and details for anything
that matches the specifications of our customers. He also takes
details and pictures of any other vehicles that look interesting
for Australian buyers, and we send these to the mailing list on
Friday night or Saturday morning. We speak to customers before
the vehicles come up for sale and determine which ones they are
interested in. We then have the buyer reinspect these on Saturday
and clarify any points that the customer wishes to know. We discuss
the bid limit with the customer and how this fits with their budget
in Australia, as well as our best guess of what they may have
to pay that day to win the car. The bid limits are then relayed
to the buyer and he bids on the vehicles as they come up. If the
vehicle is won for less than the customer's bid limit, of course
they only pay the lower amount.
We
are able to send pictures for the Kobe auction because the buyer
inspects the vehicles on Friday, allowing time to take them and
send them out. Pictures are generally not possible for the other
auctions we cover during the week however, as there is simply
no time. Our buyers check the auction listings the night before
to determine which auctions they will attend the following day
based on the vehicle orders they have. They then inspect the vehicles
on the day of auction and contact me to discuss. I then relay
the complete descriptions to the customer and determine a bid
limit as above.
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All
vehicles offered to customers are physically inspected by
our buyers except for a couple of "TV auctions"
held remotely where the cars cannot be physically inspected.
The customer is advised when an inspection is not possible,
and it is entirely their choice whether to rely on the auction
report alone. Often the grading system is more strict on
the TV auctions simply because inspection is not possible.
The
Kobe auction examples represent only a small fraction of
the vehicles that we can give our customers access to across
Japan. The updates of stock with suppliers are also only
a small number of good cars compared to the choice and personal
attention that our customers receive.
Customers are often surprised at the number of vehicles
that we offer them each week once they have paid the service
fee to start actively searching. Most customers are able
to buy a suitable vehicle within 2 to 3 weeks.
The Kobe auction is just one of the more than 30 auctions
we cover each week through our excellent buyers across Japan.
We have hand picked our buyers with respect to reliability
and auction coverage, and have buyers in each major area
of Japan covering the large auctions as well as some one
the smaller ones in their region.
The buyers are all good friends of mine with the same very
honest attitude to business as we have, and we get on very
well which is crucial when considering the logistics of
locating a good vehicle in Japan, international funds transfer,
and shipping the vehicle to Australia.
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TV
AUCTION
ODOMETER
TAMPERING POSTERS DISPLAYED AT AUCTIONS |
~
Geoff Risbey, Manager
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