In several previous posts, commenters expressed an interest in the costs of purchasing and owning a vehicle here in Japan. Here’s a short summary; from purchase price to annual expenses.
New Car Cost. I’ve found new car prices here and in the US are pretty similar. Obviously exchange rates can make comparisons difficult, especially since we’re at a ten year high for the dollar now at 150 yen. Using the ten year average of 128 yen to the dollar, prices on new cars are mostly equivalent. A new 2024 upper-level Corolla Cross here in Japan goes for 3,459,000 yen or $27,023, while I found one listed at a Toyota dealer’s website in Ohio for $28,385. There is one exception – foreign European makes; Mercedes, BMW, Audi, Porsche, even Volvo are much more expensive here than in the US. A Mercedes C Class starts around $48,000 in the US, in Japan it’s over $55,000. This isn’t due to government tariffs or import restrictions – those were dropped years ago. These makes are more expensive because the Japanese consumer is willing to lay down their hard-earned yen for one – European luxury models still have significant brand cachet and prestige here. The manufacturers are certainly not doing anything to discourage that. On the other end of the scale are the “Kei-class” minicars, which there is really no US equivalent. Brand new Kei car prices range from $10,000 for a basic model to around $18,000 for one fully tarted-up.
Used Car Cost. I consider Japan a used-car paradise, for several reasons. 1) There’s excess inventory vs demand – Japan exports tons of used cars to Russia, the Middle East, and other parts of Asia, yet there are still plenty left over for the home market, which makes for low prices. 2) Japanese that live in major cities typically use the country’s efficient mass transportation system during the week, and only drive their cars on the weekend – most used cars have very low miles. 3) Japanese tend to meticulously follow the recommended maintenance schedule – and coupled with the rigid biennial JCI inspections, most are extremely well cared for. For the equivalent of $5K to $10K in yen, you can pick up a nice, dependable, nearly-new used car that would likely go for double or triple that in the US.
Maintenance and Service. Prices between the US and Japan are pretty much the same. The old adage that you’ll pay more at a dealer vs an independent garage applies here in Japan as well. Fortunately Japan still has quite a few small “Mom and Pop” type garages. For minor work and oil changes, I take my Volvo to a small, one-bay mechanic that specializes in European makes a couple blocks over from our house. The wife’s Toyota goes to a nearby Big Box “Home Depot” like store that also does vehicle service. Replaceable items such as tires, batteries, etc., are also equivalent.
Japan Compulsory Insurance (JCI). JCI or “Shaken” is both a vehicle inspection and the purchase of government-mandated insurance. New cars in Japan come with a three-year JCI policy included – thereafter, inspections are required every two years. A few decades ago, only a small number of government-owned facilities could conduct the inspection. Thankfully that was changed and now dealers and large/small garages are permitted once certified by the government. There are even “Shaken only” shops that do nothing else. The choice of going to a dealer or local garage, or just having your insurance company handle everything usually boils down to cost and convenience. I’ve been using my insurance company for years as they’re convenient and quick – drop it off, they take it to a local garage, then to the Land Transportation Office to update the forms, then back to me the next day.
The inspection covers eight major areas; exterior compliance, VIN check, emissions test, chassis alignment, odometer inspection, headlight alignment, functional brake test, and lastly a thorough inspection of the vehicle’s underside. The check typically takes about three hours. Any failure has to be corrected before a new inspection certificate is issued. The inspection also verifies that all road tax and other fees have been paid. If it passes, the car’s paperwork is taken to the nearest Japanese-government Land Transportation Office – these are essentially regional vehicle registration centers. A new “Shaken-sho” or registration form is issued along with a new insurance policy form, and a small sticker with the new expiration date is then affixed to the right side of the windshield.
The insurance policy is personal liability only, in the amount of 30,000,000 yen, or depending upon exchange rates, between $200-$300,000 for death, and $80-$120,000 for injury. All other insurance coverages are considered “voluntary”, though most Japanese purchase them, such as additional personal liability above the JCI minimum, property damage liability, collision, comprehensive, etc.
In addition, the national government collects a “tonnage” tax during the inspection – which varies based on the vehicle’s overall weight. It ranges from 10,000 to 100,000 yen.
Typical costs for JCI and the inspection are; 1) 30,000 yen for the insurance policy, 2) between 20,000 and 40,000 yen for the inspection and processing fee, and 3) the tonnage tax. Let’s say a total around 65,000 yen – maybe $450-$600 based on exchange rates.
Annual Expenses and Fees. Annually the prefecture you’re living in will send you a bill for “road tax”; this is a tax for road maintenance and upkeep, and is based on engine size. It applies to cars beyond the 660 cc cutoff for “Kei” vehicles. Here is an example from one prefecture:
- Total displacement equal to or less than 1000cc: ¥29,500
- Total displacement more than 1000cc and equal to or less than 1500cc: ¥34,500
- Total displacement more than 1500cc and equal to or less than 2000cc: ¥39,500
- Total displacement more than 2000cc and equal to or less than 2500cc: ¥45,000
- Total displacement more than 2500cc and equal to or less than 3000cc: ¥51,000
It continues to go up correspondingly.
If you have a “Kei” minicar, you are taxed by your local city or town, not the prefecture, and pay significantly less – about 10,000 yen.
Any vehicles used for business-only are taxed at much lower rates.
Miscellaneous. If you’re forced to get your initial license in Japan, or have one from one of the countries not recognized by the government, then you’ll be required to take a mandatory drivers training course. These courses aren’t cheap – one near our home charges 374,500 yen – about $2900 for 45 hours of instruction. Prices can be cheaper outside of Tokyo. Then there’s parking – in major cities there is a requirement to show proof of parking before you can register your vehicle. If you don’t have a space, you’ll be forced to rent one – downtown Tokyo’s rent-a-space parking prices are similar to New York and London. We live in Tokyo but on the far outskirts and the monthly fee for a spot is about $50.
Summary. So in terms of operating cost, excluding gas, maintenance, etc., each April I pay 51,000 yen in “road tax” for my Volvo C30 and 29,500 yen for my wife’s Toyota Roomy. We also have additional insurance above JCI on both cars, which is around 100,000 yen annually. Every other year, in addition to these costs, we pay approximately 65,000 yen on each car for JCI. So using the 128 yen to the dollar average, we pay about $1400 in taxes/fees for one year, and around $2400 the next.
Bottom-line: New car prices in Japan are pretty much equal to those in the US, though you’ll pay a lot more for European luxury and sports models. Used cars are a definite bargain. In general operating costs are significantly more expensive.
Thanks to my Tokyo cohort and tomodachi Tatra87 for some key suggestions and input.
Wow, great stuff Jim. And people here in the People’s Republic of Maryland complain… Comparatively, we get off pretty easy regarding operating costs.
Vehicle prices however, especially used ones lately, are a whole different thing, but that is starting to calm down now, thankfully.
Great! What about taxes going higher as the car gets older? Is it true?
It used to be true – I can remember when I first came to Japan a car older than 10 years required a JCI inspection each year – at full price. That changed and in the prefecture I live in there is no tax/fee for having an older car. I have heard that in some prefectures the road tax may be slightly more for older vehicles.
I’d long wondered about all this, and had no friends/relatives who’d ever participated in it all. Thanks for an entertaining and very informative post today!
There (from my very limited experience as a tourist) would seem to be fairly little reason to actually own a vehicle within the greater Tokyo area, or at least the more central area, yet if there is a house or dwelling with a spot of land to park one in, there almost invariably is a car in it. Within those environs public transportation appears to be excellent and inexpensive (both subway and bus), never mind bicycling which is enormously popular (but somewhat maddening as a foreigner when trying to rent one until you somehow magically “get it”, except I can’t turn off the emails from them that are all in Japanese, not sure what to click…Hopefully they aren’t telling me they can’t seem to locate the last bike I purportedly returned.).
The flipside to the expenses would seem to be that there are no derelict hoopties rolling around town, everything seems quite well maintained in the mechanical sense, runs smoothly and quietly without belching smoke, and I’d have zero concerns about being in an accident with an uninsured motorist. Note that insurance prices in the US at least seem to have been increasing significantly over the last couple of years for all types of vehicles.
My recurring note/surprise was that gasoline itself seemed surprisingly inexpensive when looking at the prices at the nearest gas station I constantly walked by in the heart of Tokyo, at under $5 a gallon in successive stays four years apart if I did the math correctly.
An excellent post on one of the more mysterious aspects of Japanese car ownership clearing up a lot of misinformation that circulates, thank you.
It is more than a bit surprising how many own cars that don’t get used much, or only perhaps on weekends. From some reading on the subject some years (decades) past, it seems one quite significant factor is/was the prestige factor. It seems that once your job/income was at the level where you could afford a new car, the social pressure to buy one was quite strong. And then to keep buying a new one every three years or so thereafter.
I remember reading that it was common to have a long term relationship with a specific car salesman, and that he would come to visit one every three years to discuss the replacement car. This salesman was well armed with the details of your job and income (based on the job). And that he would put quite a bit of more than subtle pressure to make sure that the new car was commensurate with your latest wage increase.
This is/was really the key source as to why so many immaculate 3-year old cars were constantly feeding into the used car market; much more so than the Shaken, although it of of course convenient for the car industry that the original Shaken certificate was good for three years.
This explains why there were so many nicer/upscale sedans sold, even though they often got rarely used. It was all part of a complex system that benefited the car companies, which then of course ultimately benefited the country at large, by keeping industry strong and growing. And Japanese social mores are very much oriented to work for the overall good of society at large.
Admittedly this may be somewhat outdated now to one degree or another. The huge growth of kei cars/vans tends to undermine that somewhat, although they still tend to get traded in after 3 some years or so. Which makes them incredible bargains. Jeez; I’d love to buy one of those little vans for $5-10k.
One more factor: there’s a major stigma in Japanese culture about not having relatively new things, which is very much the case with houses. Older houses (30+ years) have a huge negative stigma, and are typically torn down, no matter how well maintained they are and the quality of materials were used.
Children of parents who have died will often just let their parents’ houses sit empty for years, as they also feel an obligation to keep them, even though they are empty and not being properly maintained, out of respect for the parents. The result is that many Westerners are snapping up these older homes for cheap, and there’s now a whole little industry catering to foreigners who want to buy these and move to Japan. Thanks to the very low yen, it can be a huge bargain, and then living costs are low and schools are very good.
Japanese will generally not buy these older houses, and that’s why they commonly get torn down and new ones built, even if the new ones aren’t really any bigger or more grandiose.
It’s not surprising that the same cultural factors affect both the car and real estate markets. And that foreigners are eager to take advantage of them.
Jim Brophy seemed to indicate that the three year Shaken INCLUDES insurance for that same term, which would seem t(to these eyes anyway) to be a huge boon and of course then creates a large new expense three years post-purchase.
Ducking into a couple of dealerships the last time I was there showed and looking at the floor model showed what a good value a new domestic Kei car was – A Mitsubishi Hybrid-engined mini-minivan for example was well under US $20,000 and equipped with all the necessary creature comforts (and more, i.e. not a stripped out penalty box at all, plenty of room for four and their cargo). Combine that with minimal gasoline usage, virtually no other expenses for the first three years, and even if it’s worthless three years hence (which it is of course not) would make it absolutely competitive with what is paid here for a small vehicle for example once everything is added up.
There is though perhaps a bit of a subculture regarding old(er) things, T87’s posts for example aren’t literally of every old car he sees with a scramble to find something/anything to post, while he surely does a lot of wandering about to find interesting subjects there are definitely MANY older vehicles about, with the proviso that they are usually immaculately maintained/preserved.
I walked by several new residential houses being constructed mid-Tokyo and the construction practices and materials seems first rate. Structural wood beams and posts were multilayered solid wood affairs, predrilled/prenotched and lifted into place via crane, i.e structural members that you would be proud to actually show off as finished pieces/components instead of them later applying finishing materials over them. Workers straddled them mid-air and using rubber mallets carefully aligned them in place, then bolted them together. I can’t even begin to imagine the costs of something like that over here, but it was fascinating to watch and everything on the building site reeked of the same level of attention to detail and care (and cleanliness) that seems to suffuse most other things in Japan. I guess the word for it is “respect” as in respect for ones surroundings, environment, others, and the future.
Yes, there is of course a very substantial car culture that treats older cars as art objects, for the most part. And of course that very much fits into the Japanese mentality. And of course there are inevitably exceptions to all stereotypes.
Guess where all those beautiful timbers come from? Oregon. We export shiploads of logs to Japan regularly. When I drive to Port Orford, in Coos Bay I drive by the harbor where log trucks deposit mountains of logs which are then loaded on specialized log-hauler ships every few days.
My PC is about to burst for all the classic car photos I keep snapping up, especially on Sundays (today was a massive haul!). I currently have over 350 potential posts, of which 95% I photographed here. Every week, I can expect to find 3 to 10 new full CC subjects. It just never stops.
There is a huge car culture here and the classic car niche within that is substantial, particularly for the exotic stuff. But don’t forget the old-timers who bought their pride and joy — be it a Mark II, a Cedric or even a Mercedes — back in 1989 and just never let go of it. There are plenty of them about too, and boy do they take care of them.
Naturally, after the 20th white S140 Crown sighting, some models fade into the background a bit. But there are always others just around the corner. Today’s “one owner classic JDM sedan” was a Daihatsu Charade, for instance.
As far as wood construction for houses, it’s true that nearly all the wood is imported: despite ample acerage of domestic forests, it’s nearly all impossible to harvest, due to the mountainous terrain. I’m sure the US supplies some, but from what I understand, the largest share hails from Russia.
Given the three year initial relatively cost-free ownership of a new car and the social pressure to trade in for a new car every three years, is there anything to the idea that Japanese cars get a major styling or re-engineering makeover, say, every three years?
I have no idea on the answer, but I am throwing the question out there…
I haven’t seen that Dutch – maybe several decades ago but not recently. What the manufacturers do however is follow a typical 4 year major update, with some styling change on the same platform at the two year point. Usually this styling change (front or rear fascia) is more extensive than that for their US or other market models.
It doesen’t seem possible, to make those boxy Kei vans look much different than they already are.
What about quality and honesty of service in Japanese garages? Are dealerships honest and mechanics morally and integrally as impeccable as vehicle owners are to following maintenance schedules?
Presently owning 1 1/2 Keis (My Suzuki Wagon R isn’t a true Kei. But the three passenger doored Wagon Rs sold on the Asian market truly are), they seem unforgiving, not long after maintenance schedules get ignored. Daihatsus tend to start burning oil, for example, once unchanged oil begins varnishing the piston rings into staying in a fixed position.
Japanese inexperience with western salted roadways show manifestation, rustwise. Although, much of that has become history on newer vehicles
Very interesting about the negative stigma regarding older houses. I read an article recently that looked at the high (and growing) vacancy rates among Japanese houses, it attributed that phenomenon largely to families hanging on to properties for sentimental reasons, though a social stigma such as what you explained wouldn’t surprise me. Even that article pointed out that many of these vacant homes become derelict.
But I’m curious whether that same stigma extends to multifamily residences, which I assume account for the majority of housing units in the big cities. Do folks shun older apartment & condo. complexes as well? Or do the management of nicer multifamily buildings update their facilities constantly to keep up the perception of newness?
It appears that the regulations and other factor results in an unusually high degree of constant redevelopment of such units. The result is Tokyo has the highest vacancy rates and the lowest rents of any major global city. They do not have a housing shortage! They just keep redeveloping and building new apartments and condos where smaller old buildings once sat.
If you want to forward the bike emails to me Jim, I can see if there is a way to turn them off.
Thanks, I’ll forward the next one! I didn’t even think of that…There’s also one from Kawasaki somehow…
One huge thing to consider about buildings in Japan is all the earthquakes. Might be a big reason why older homes/buildings are seen in disdain and torn down. They dont conform to modern earthquake codes and its easier/cheaper to just raze the building than to renovate.
I live in a well built small 1960’s brick ranch that I really adore. NO WAY IN HELL would I want to live in that house or something like it built in that era in Japan.
Additionally you need to think back to 1945 in Japan. We had leveled many of their cities with bombs or just burnt them to the ground with napalm like Tokoyo. The push was to rebuild quickly/cheaply, thus a lot of what was built in the late 40’s/50’s/60’s was done very shoddily on the cheap. These buildings collapsed in earthquakes, the modern earthquake building codes were written in blood.
Here’s the NYT article that opened my eyes on these abandoned old houses. And they seem to be very well made.
https://www.nytimes.com/2023/04/17/realestate/japan-empty-houses.html?searchResultPosition=1
It seems that I ought to move to Japan. Between beautiful inexpensive older houses, abundant used cars in excellent condition, and toddlers who are able to run errands for you, I’m not sure what’s not to like. 🙂
The fact that the older houses are available kind of by definition means they didn’t fall over during an earthquake. 🙂 There are lots of older construction homes and buildings/temples in Japan. Fire seems to a bigger danger for some of them, yet a structure built of wood is inherently pretty flexible structurally, comparatively speaking.
But yes, unreinforced masonry is about the worst kind of thing to live in during an earthquake. And the US seems to be experiencing far more earthquakes in previously assumed “safe” areas due to fracking etc., such as in Oklahoma.
The fact that the older houses are available kind of by definition means they didn’t fall over during an earthquake.
Bingo, Jim-san.
And the fire thing too. Of the four elements, the earth(quake) is the least problematic. Fire, water (flooding or tsunami) and air (typhoons) are the bigger threat and the bigger killers. That said, though the earthquake themselves cause limited damage, they do trigger tsunamis and can cause fires. The 1923 Tokyo quake was a killer because it occured at lunchtime, while folks were busy cooking. The ensuing fires destroyed and killed a lot more than the initial tremor, not unlike San Francisco a couple decades before that.
Tokyo — and most larger Japanese cities, i imagine — is now set up with “fire resistant zones” where all buildings are meant to use thicker walls and isolation, serving as fire breaks. We actually built a house in one of those zones, so I have some first-hand knowledge about it: it costs more to make and you get less interior space, but the extra insulation makes those houses a lot more energy efficient than the average Japanese house.
Energy efficiency in housing is quite poor here, certainly compared to European standards I’m more familiar with. If you get one of those cheap old houses, be prepared to fry in summer and freeze in winter — and rack up substantial TEPCO bills no matter when. Newer houses are better, but still not very good from that point of view.
Thank you for writing this! These types of perspectives are among my favorite CC articles. As someone who works in the fields of economics and urban planning, topics like cost comparisons such as this are endlessly fascinating to me.
I never realized that the Shaken was tied to mandatory insurance – interesting since here in the US, the (most less stringent) annual safety inspection idea was originally an insurance industry push. And it’s amazing that the Shaken inspection takes three hours to complete. In many US states, the inspection takes about 10 minutes – folks typically wait for a turn longer than the inspection actually takes.
Between US states and regions, many of these issues tend to offset each other, but insurance costs as gas costs are two that vary greatly among localities.
This is a very interesting article. I was aware of some aspects in a very general sense, but it is great to see the details explained. In Canada, it seems similar to the US in that regulations vary by province, as do insurance and fuel costs. In Ontario we have not had annual inspections for a long time. I believe they are only required on a change of ownership. A couple of years back they dropped the annual registration fee. It was done around election time, but it seems very short sighted, especially with mor electrics, where we will need to replace the revenue from gas taxes. I believe that annual registration fees are significant in some jurisdictions.
I too would love to be able to get a kei micro van. What a great “around town” vehicle.
Its about $100 annually to register a car in Tennessee, they did away with emissions testing a couple years ago. We never had a safety inspection. Insurance isnt cheap, mine runs $650 every six months for a 10 year old Lexus and I have a clean driving record.
What Id really like from Japan that they dont sell here is a diesel 4×4 Toyota. All of the newer 4×4 Toyotas sold in the states really suck the gas and are stupid expensive new or used.
One of those tall/narrow kei vans would be fun for the novelty factor but I bet you get blown around something fierce doing 75mph on the interstate. Also doubt that it would maintain that speed going up a hill. Not ideal for how I commute/travel around Nashville.
I love reading about this stuff. Thanks for putting in the time.
For others wanting more, I recommend searching for Thom Kreutzer’s account of what it took to import his Chrysler T&C into Japan when he wrote for TTAC.
Speaking of cars for sale in Japan, I’ve attached the sales paper I got in 2014 when I stopped at a small used car dealer across from Yakota Air Force Base and looked at a 1996 Skyline GT-R V-Spec. I was fortunate to be able to sit in it and start it up. If there was any possible way for me to buy it and keep somewhere, I would have.
Take a look at the price listed (poorly translated by my phone), keeping in mind the yen was about 106y to the dollar at the time, and compare it to the price of a similar car being sold in the US today.
I visit Japan quite a lot studying and building traditional wooden boats. I was there almost six months last year building boats in a small, rural village where my business partner runs a cabinet shop. I drove a kei pickup with about 60,000 miles on it that was given to my partner because he considered is worthless. It WAS worthless in the Japanese market.
In 2003 I did an 8,000 mile road trip around Japan with my wife in a leased Mazda diesel van that we slept in most nights. It was tremendous. The profusion of hot springs and public baths made car camping a dream. That van had probably 75,000 miles on it and a Tokyo firm leased it to us for six months for $600. I am sure they considered it junk. I creased the fender just before getting back to Tokyo and was prepared to pay for the repair. The company owner laughed it off. I am sure he junked it and was more than happy to have made $600 on it.
I had a brand new kei van at my disposal during a project in 2016. My wife and I made road trips every weekend. I discovered to my chagrin that mileage wasn’t great at all, about 30 mpg, when we took the highway to Kanazawa. Those things are just hopelessly underpowered but would be great around town.
Studies show there are currently eight million abandoned homes in Japan. In the countryside the young people leave and Mom and Dad shoulder on in the family home, probably the last generation to care about it. The presence of the Buddhist alter in the home is very significant. I know people who rented homes but were forbidden to enter the room with the alter, called a butsudon. But once Mom and Dad are gone there is no market for the house. It costs almost nothing to hang onto it, however, and they are not torn down because of enormous disposal costs. Also raw land is taxed much higher than property with a house, so you see places just slowly falling apart. I admired a nice house recently next to the one I was staying in (mine was abandoned and rent was zero). It had land, a barn, and even came with a kei truck. It sold to a young couple who started farming the land. They bought it for one million yen, which at 150/dollar is $6,666. The consensus in town, where half the houses were empty, was that it was an absolutely fair price.
This is one of the best article you will find on the phenomenon of the short lifespan of contemporary Japanese houses: https://www.nippon.com/en/views/b02314/?cx_recs_click=true
What is tragic is even today’s Japanese homes are often built on a solid timber frame with added metal bolts for earthquake, but then the outside and inside are sheathed with the crappiest paneling imaginable. They age terribly, and given the economics mentioned above and by other posters, there’s almost no incentive to remodel. People become tired of them and build a new house or they get abandoned. Real estate companies actually tell people they will arrange their thirty year mortgage and when that is paid off arrange for demolition and a new house.
There is a group of foreigners trying to save classic old homes. They are called Kominka Collective and they will ship a house frame anywhere in the world. Others have done this kind of thing because generally you can get a house for free if you will take it down and remove it. Not long ago I saw an ad for an exquisite Japanese inn that was free for the taking, otherwise it was going under the bulldozers.
I think used car prices are now the highest I’ve ever seen. Given decades of a moribund economy Japanese have given up on the stigma against pre-owned vehicles. When I first came to Japan in the early 1990s I was stunned at how cheap used cars were. Wandering around car lots looking at mileages I came to the conclusion that most drivers got rid of their cars when the original tires wore out, or about 30-40,000 km.
That was an interesting article. Thanks
+1
In the Entitlement Mindset state of Louisiana, the real killer is auto insurance, especially liability. I pay over $850 each six months, drive the most common type car (Ford Escape), and live in an unincorporated suburban setting. If I lived in the city, the same policy would be $1,200 each six month. To get an umbrella that exceeds the $250k cap on my auto insurance, I’ve been quoted an additional $650 per annum.
Louisiana is among the top 5 most expensive states for auto insurance. There are 23,000 attorneys in the state of just over 4.6M inhabitants which works out to 1 attorney per 200 individuals. No wonder!!
Inspections are annual (~$30) and very rudimentary (horn, lights, brakes, proof of insurance, proper registration and valid license, etc.).
Repairs are reasonable (dealership for flashing lights on the dash board, all other at a repair shop) considering the age of the car.
One benefit is the lack of salt during the winter.
Fascinating post, Mr Brophy. Quite a few myths busted, I think.
The biennial Shaken process seems labyrinthine and slow – though I understand it CAN move quickly – and a Gordian Knot for foreigners, as some overseas scoundrels found out years ago when they tried to register a fabulous but illegally-imported Martini-Porsche 908 in Japan.
Believe me, when they got the car to the Land Transportation Office quite ill-prepared, the Martini’s Shaken Knot stirred.
🙂