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Why Japanese Used Cars Are Cheaper Than Others

By guest blogger Brett Phillips

Ten years ago, a large family might’ve felt limited to either a high-ticket people mover, a budget Kia Carnival, or perhaps even a second car - and not a great deal else. Yet, patiently, in the deep dark shadows... the mysterious magic of grey imports has been simmering! Today the lid will be lifted on why now Japanese used cars are cheaper than others, and why there’s a boom (and a scepticism) in the grey import trade - especially for people movers.

If you’ve been paying careful attention in the local supermarket car park in recent times, you might have noticed a sharp increase in unusual car models, such as the Toyota Estima, Nissan Elgrand or Mitsubishi Delica.

Toyota Estima, Nissan Elgrand, Mitsubishi Delica

And you’ll never see an ad during the Footy or Cricket for one of these vehicles, because they’re not even made for the Australian market - they’re produced for the Japanese Domestic Market (JDM), and they’re becoming super popular in Australia as “grey imports” - a somewhat mysterious term that seems to have lost its origins. Perhaps it’s in reference to the grey area into which they seem to fall when it comes to mundane tasks such as rego and insurance.

So what are grey imports?

Basically, they are foreign-produced motor vehicles intended for their own local market, but sold and exported to another country. But it’s a little more complicated than that - there’s a bunch of boxes to tick, red tape to unravel and bribes to pay… (just kidding). This article won’t go into the finer details of that procedure, but rather zone in on what seems to be the question everyone’s asking - why ARE Japanese imports so much cheaper than those (sometimes near-identical) models on our local market?

Destination: Japan!

Japan

Japan is the main point of interest here, and for one excellent reason - QUALITY! It’s fruitless to argue, Japan is producing some of the absolute best machines ever to grace the world’s highways and private garages, and this is the number one reason JDM cars are so sought after in Australia.

Sure, there are other countries from which grey imports arrive, but usually these are special interest vehicles, such as vintage collectables.

Next, it’s time to unpack five factors that make these Japanese used car imports so much cheaper:

  1. SHAKEN!

    That’s right… Shaken is a Japanese word that sends shivers down even the toughest sumo’s spine. It’s the Japanese vehicle registration system, which includes some very strict requirements for used vehicles.

    Shaken requires cars to undergo a super stringent inspection after three years (for passenger vehicles) and every two years after that.

    Chuck in the fact this renewal process involves around ten different fees and taxes, often costing in excess of AUD$1000, and you might start to get a sense of why the average Japanese car user opts to cash in and upgrade to the newest model.

    Consequently, some even think Shaken is the government’s clever ploy to encourage citizens to buy new cars, and thus keep the motor industry booming.

  2. SWEET DEALS

    Closely related to Number 1 is the fact that new car prices in Japan are reportedly somewhat lower than what we can expect to pay for the export models.

    To make the deal even sweeter, those JDM models often have luxurious extras and funky/quirky gadgets that don’t make it into the export models. (Maybe you’ve heard people referring to the Tarago as the Australian Estima with “povo pack” - i.e. a poverty version of Japan’s Estima)

  3. THE MIGHTY YEN

    Did you know that Japan has the third strongest economy in the world? Should the Japanese economy falter, it could potentially bring the grey import market crumbling to the ground. However, at the same time, grey imports/exports are an integral part of that robust economy - as are cars in general.

    Can you guess what the top 3 Japanese exports are? Yes - Cars, Integrated (computer) circuits and Car Parts.

    It would be safe to say, Japan’s global reach of both new cars, grey import/export used cars and car parts is in a healthy position to continue that way for a long time.

  4. USED CAR TSUNAMI

    With all those new car sales in Japan, where are all the used cars going? There must be millions, you say! And you’re right. There are millions, and that’s why there is a long list of countries importing used cars from Japan.

    Used Car Tsunami

    You would imagine only right-hand drive countries would import those cars, but this time you’re wrong. In Russia’s Far East for example, Japanese grey imports (i.e. right-hand drive) make up a huge portion of the car population in that left-hand drive nation.

    The same can be said for many other countries, as Japanese grey imports swell in popularity in places like New Zealand, Ireland, UK and even Thailand.

    So while there is an abundance of used cars available in Japan, their popularity overseas continues to absorb that supply.

  5. AUSSIE HABITS

    Who doesn’t like a good bargain, right? Aussies are an op-shopping nation - they aren’t too proud to slip into someone’s old jeans or sweat it out on someone’s old exercise bike.

    The same can certainly be said for used cars in Australia. Brand new is great, but used is always another top option if a buck can be saved. If you can get that Hilux for $10k cheaper than new, with only 20,000kms on the clock, then it’s a done deal. Agree? Most would.

    So, what if your local used car lot has a Toyota Tarago for $36k, 80,000kms on the clock and you notice a Toyota Estima for $18,000 and 75,000kms? What’s a bargain-hunting Aussie’s first thoughts? Probably scepticism, then curiosity, Google research and maybe a test drive.

    In general, Aussies love a bargain and are willing to take a risk.

Aussie Habits

So, now to address a couple of those risks:

  1. Odometers - those KMs are fake!

    It’s true, there have been, and probably still are, scammers tampering with odometers. This can happen locally as well as with imports.

    In fact, the tampering often happens here, and there have been some major stings in recent years busting these shonky dealers with Japanese car imports in Sydney and elsewhere.

    But the Japanese auction system is as stringent as their Shaken rego system. The paperwork is meticulous. All you need to do is make sure you select a trusted, honest dealer who can give you original documentation and auction reports.

    (Check out this concise guide to verifying odometers on JDM vehicles: https://www.bestpeoplemovers.com.au/mileage-verification/)

  2. Insurance - it’s ridiculously high!

    This is one of the first hurdles when you get the keys for your grey import. If you try to use online forms to obtain an insurance quote, you’ll often be frustrated that your car model doesn’t exist in the database or gobsmacked by a quote which is farcical.

    Advice: ring or email. Join an enthusiasts Facebook group and ask. There are always insurers who understand the grey import market and are able to offer a fantastic, realistic insurance policy.

  3. No parts / Local mechanics won’t touch them!

    In regard to parts, it is often only ignorance on the part of dealerships that tell you they can’t get parts for your grey import. Nonsense! Many if not all parts are available locally for the local versions of several models.

    If in doubt, Google is your friend, and a Facebook group is your homie.

    As for mechanics, you might get a blank look and a head scratch when you introduce your car. Once you reassure them that your vehicle is equivalent to local models, if they still act dumb or want to charge unreasonable prices, tip your hat and kindly bid them good day - find another mechanic.

    Again, it’s a great idea to turn to the friendly enthusiasts on FB for recommendations.

  4. Unsuited for harsh Australian conditions!

    There have been articles written in opposition to the grey import market, arguing that Japanese car imports / people mover cars are built for the smooth, pleasant, pristine highways of Tokyo, and are not suited to Australia’s “harsh” conditions.

    This laughable argument is almost not worth addressing. Firstly, it is worth noting that a car driven in such an environment as the Japanese streets and highways is going to be in top condition when it arrives in Australia. Clean underneath and minus the kangaroo impact damage.

    Secondly, unless you are driving your people mover or supercar offroad (for which the Delica is purpose built) there aren’t really many “harsh” conditions in Australia.

    Thirdly, many of the export models use the exact same parts as the local JDM vehicles - the same parts that Japan manufactures and exports.

    Finally, compared to Africa and Russia - other countries where JDM exports are hugely popular - Australian streets and highways are heavenly.

So there you have it. Five reasons why Japanese used cars are cheaper than others, and four myths debunked!

Will these Japanese grey imports always be cheaper than our local models? There can be only one answer for that… Yes.

Why? Because once they are no longer cheaper, demand will dry up and there won’t be Japanese grey imports.

So… allay your fears, enjoy them now, and save a pretty penny at the same time!

Happy Customer


Xo,
Natalia
Your JDM addict