- May 28, 2025
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Are you planning to buy used car in Japan? Before you start, it’s important to get a clear picture of the current market. Recently, vehicle prices have been rising across the country due to inflation and raw material shortages, making car ownership tougher for many foreign residents.
This article outlines the recent changes in car prices in Japan, the key differences between new and used vehicles, and practical tips to help you buy a used car in Japan at a more affordable price.
Table of Contents
Profile of Writer
Masamichi Takayanagi
Financial Planner & columnist;
An independent financial planner with extensive experience as a financial columnist, specializing in a wide range of topics including asset management, life insurance, inheritance, loan products, and credit cards. Over 1,000 articles and projects have been contributed to the field.
1st grade Certified Skilled Professional of Financial Planning, Certified Financial Planner®.
If you’re interested in other articles about finance in Japan, such as NISA and taxes, you might find this article helpful.
Chapter 1: Current Trends in Japan’s Car Market
Before exploring how to buy used car in Japan at a lower cost, it’s important to first understand the current state of car prices in the country.
1. Trends in Car Prices
Building a car requires a wide range of materials, many of which are imported. With the recent depreciation of the yen and rising costs of raw materials, car prices in Japan have been on the rise.
The cost of purchasing a new vehicle has steadily increased since 2017. According to the 2023 Passenger Car Market Trend Survey released in 2024 by the Japan Automobile Manufacturers Association, the average purchase price for new cars bought within the past two years continues to climb each year.
| English | New Car Purchase Price (in million yen) |
|---|---|
|
2015 |
¥2.32 million |
|
2017 |
¥2.31 million |
|
2019 |
¥2.45 million |
|
2021 |
¥2.55 million |
|
2023 |
¥2.64 million |
2. Used Car Market Prices
Used car prices have also been rising significantly for various reasons. The main factors contributing to this increase include:
A decline in new car production
Semiconductor shortages
Growing overseas demand, among others
According to the Used Car Market Price Index published by AUCNET INC., the index value in April 2025 was 2.156, using July 2008 as the baseline value of 1.0.
This means that used car prices have roughly doubled since 2008.
Source: AUCNET INC.
Chapter 2: Key Differences Between New and Used Cars
When considering buying a car in Japan, the two primary options are a new car or a used car. Below is a comparison of their advantages and disadvantages:
New Cars
Pros:
Eligible for certain tax benefits, such as eco-car tax reductions
Lower risk of mechanical issues immediately after purchase
Lower maintenance costs in the initial years
Access to the latest models and technology
Customization options for features like trim level, interior, and color
Cons:
Higher purchase price compared to used cars
Subject to a 10% consumption tax on the full vehicle price, resulting in a higher total cost
Used Cars
Pros:
- Lower purchase price
- Lower consumption tax due to the reduced vehicle cost
- A wide selection of vehicles across various years and models
Cons:
- Limited or no customization options
- Potential for mechanical issues depending on the vehicle’s condition
- Possibility of needing repairs soon after purchase
Chapter 3. Tips to Buy Used Car in Japan at a Lower Cost
Outside of major metropolitan areas like Tokyo and Osaka, owning a car is often essential for daily life in Japan. If you’re planning a temporary stay or need a vehicle quickly, a used car may be a practical option. Used cars are generally more affordable than new cars and often available without long waiting periods.
This chapter outlines key tips for buying a used car in Japan at a lower cost, along with important points to keep in mind during the process.
1. Timing of Purchase
Adjusting the timing of your purchase can help you buy a used car in Japan at a more favorable price. Below are the periods when used car prices are likely to be lower:
March (fiscal year-end) and September (mid-year closing)
Dealers often aim to hit their sales targets around these times, making it easier for buyers to negotiate prices.April to May
After the surge in car trade-ins before March, the used car market sees an increase in available inventory. At the same time, demand tends to slow down, creating favorable conditions for lower prices.Before or after a model change
When a manufacturer releases a new model, demand for the older version of the same vehicle typically drops. As a result, dealers may lower prices to clear stock, giving buyers an opportunity to purchase at a discount.
2. Choosing Where to Buy Used Car in Japan
When looking to buy used car in Japan, there are two main types of sellers to consider: certified dealer networks and independent used car dealerships. Each option comes with its own set of advantages and disadvantages.
Certified Dealer Networks
These are dealerships affiliated with major car manufacturers and primarily sell vehicles taken in through trade-ins.
Pros:
Thorough inspections and maintenance based on strict safety and quality standards
Vehicles often come with warranties and after-sales service
Greater reliability in terms of vehicle condition and history
Cons:
Mostly limited to their own brand’s models
Fewer options in terms of variety and customization
Prices tend to be higher compared to independent sellers
Independent Used Car Dealerships
These dealerships offer a wide range of vehicles from various brands and years.
Pros:
More variety across different makes and models
Lower prices in general compared to certified dealers
Easier to find unique or older vehicles
Cons:
Greater variation in vehicle condition
Warranty coverage and support may be limited or unavailable
Requires more careful inspection and research by the buyer
3. Vehicle Condition Checklist
When planning to buy used car in Japan, don’t just focus on the price—it’s equally important to check the condition of the vehicle. Here’s what to look for:
Key Inspection Points
When comparing used cars, always review the following:
Mileage: Lower mileage often means less wear and tear.
Repair History: Check if the vehicle has been in any accidents or undergone major repairs.
Valid Shaken (車検): A longer remaining period means fewer immediate inspection costs.
Maintenance Records: Look for a complete service history to assess how well the car was maintained.
Most dealerships list this information on their official websites under each vehicle’s page. You can also see:
Whether a warranty is offered
What kind of coverage the warranty provides
Related Post
Warranty terms
Warranty terms vary widely between dealerships. Choosing a seller that offers longer and more flexible warranties is recommended. Some dealers offer a fixed 3-month warranty. Others allow you to choose from different coverage options, with warranties extending up to three years.
Taking the time to check these points will help ensure that the car you choose is not only affordable but also dependable.
Chapter 4: Consider Alternatives to Purchasing
If you don’t drive often or find it difficult to manage a parking space, owning a car might not be the best option. In Japan, car leasing and car sharing are two practical alternatives worth considering.
1. Car Leasing
Car leasing lets you drive a car for a set period by paying a fixed monthly fee.
Pros:
The monthly payment typically covers taxes and other costs, so there’s no need for a large upfront payment. The leasing company also takes care of tax payments, meaning you don’t have to worry about things like annual vehicle tax. In some cases, you can even buy the car at the end of the lease.
Cons:
Most lease agreements can’t be canceled early. If you need to end the contract ahead of schedule, you may have to pay a cancellation fee. Also, if the car’s value at the end of the lease is lower than expected, you might be charged for the difference.
Best suited for:
Leasing is a good option if you want to avoid high initial costs and prefer consistent monthly payments. It’s also ideal for those who’d rather not deal with surprise expenses like taxes or maintenance fees.
2. Car Sharing
Car sharing lets members use cars together rather than owning one. When it’s your turn, you head to the car’s station, unlock the vehicle you reserved, and drive it. When you’re done, you return the car to the same spot and drop off the key to finish.
Pros:
Car sharing is great if you want easy access to a car without the hassle of owning one. There’s no upfront cost or monthly fee, and you can rent a car anytime—even for just a short trip. You don’t have to worry about maintenance or inspections, so you only pay when you actually use the car.
Cons:
You have to bring the car back to its original station—it can’t be left elsewhere. Also, you need to set a return time when you book, and since the car is shared, there are strict rules about how and when to use it.
Best for:
It’s ideal for people who don’t drive often but want the flexibility to use a car occasionally for short trips.
Chapter 5. Be Aware of Additional Costs
When buying a car, many focus only on the purchase price. However, there are several other costs to keep in mind. It’s important to understand the total cost of ownership.
Additional costs to expect when purchasing a car
Automobile Weight Tax (自動車重量税)
This tax is based on the car’s weight and category. You pay it upfront at new registration or during vehicle inspections, covering the entire inspection period.Compulsory Liability Insurance (自賠責保険料)
This is a mandatory insurance by law. You pay it in a lump sum when buying the car or during inspections, covering the insurance period. For example, the compulsory insurance costs around 24,190 yen for 37 months on a new regular passenger car, and about 24,010 yen for the same period on a light vehicle.Voluntary Insurance (任意保険料)
Since compulsory insurance coverage is limited, most people buy additional private insurance to cover full liability. Basic coverage usually includes unlimited personal injury and property damage. Adding optional coverages like collision insurance raises the premium.Vehicle Inspection Fees (車検費用)
Car inspections are required every two years. Inspection fees don’t vary much between new and used cars.Statutory fees: These include the automobile weight tax, compulsory insurance, and administrative fees (stamp fees). These fees are fixed regardless of the inspection shop.
Basic inspection fees: These vary by shop and cover the inspection itself, maintenance, and administrative service charges.
The total cost depends on the car’s condition and age, but expect to pay over 100,000 yen for a standard passenger car.
Chapter 6: Tax Breaks & Subsidies When You Buy Used Car in Japan
When you buy a used car in Japan, don’t overlook the financial perks. While most incentives are aimed at new cars, some benefits still apply to newer used models—especially eco-friendly ones.
1. Environmental Performance Tax（環境性能割）
Tax rate is based on the car’s CO₂ emissions and environmental performance.
Some fuel-efficient used cars may qualify for reduced tax rates.
Example: Cars meeting 95% of Japan’s 2030 fuel-efficiency standards and bought between April 1, 2025, and March 31, 2026, are exempt from this tax—even if pre-owned.
2. Local Government Subsidies
Many local governments offer unique subsidies, especially for electric or low-emission vehicles.
Example: Kamisu City, Ibaraki Prefecture
Offers up to ¥200,000 in subsidies.
Available to individuals or businesses using electric vehicles registered in the city.
Applies even to used electric vehicles under certain conditions.
Chapter 7. What to Check When You Buy Used Car in Japan
When buying a used or new car in Japan, it’s important to carefully review the contract and prepare the required documents in advance.
Key Points in the Contract
Before signing, confirm the following:
Warranty details: What is covered and for how long
Return policy: Conditions for returning the vehicle if problems arise
Additional costs: Check if any fees are not clearly stated
Terms vary by dealership, so review everything to avoid issues later.
Documents You Need
Whether buying new or used, you’ll typically need:
Japanese driver’s license
Registered personal seal (inkan) and seal certificate (inkan shomei)
Parking space certificate (shako shomei)
Vehicle inspection certificate (shaken)
Compulsory insurance certificate
Power of attorney, if the dealer is submitting paperwork on your behalf
Ask your dealer for a full list and prepare early to ensure a smooth process.
For Foreign Residents
If you’re not a Japanese citizen, additional documents may be required:
Valid Japanese driver’s license
Residence card or passport
Proof of employment or visa status
Proof of parking space
Registered seal and certificate
Japanese bank account
Since more paperwork may be required, begin preparing as soon as you decide to purchase.
Chapter 8. Summary
Car prices, whether new or used, have been going up lately. For foreigners living in Japan, finding ways to buy a used car affordably is especially important.
By choosing the right timing and making use of available subsidies and tax breaks, it’s possible to get a good deal on a reliable vehicle.
If you have any questions, please don’t hesitate to ask in the comments.
