Looking for a bargain? Now is the time!

30 September is halfway through the financial year. Because this day & 31 March are the days every business have to file a tax return, there are special things that happen. In business accounting, they close their account on the day by asking for payment for overdue invoices and calculate their expenditure. For relatively large companies which require an auditor, their bookkeepers and accountants struggle to decide what should be included in their reports. The major issues are sales & profit on the income statement and stock & debt payable on the balance sheet. All the records are then filed and have to be shown with explanation to the banks and shareholders, so finance control at this time is an important job.

Large car dealers have lots of cars in stock for their business activity. They have to have different types of cars in numbers, so they line as many used cars in a hot-selling line as possible. To collect good quality models, their purchasers go to auctions all the time. However, this time of year, to make their financial statements look good, they try hard to reduce their stock and lower their borrowings. It means that they try to get rid of old stock at auction to make cash to pay off part of their loan. So around this time, large dealers not only sell their stock but they are not purchasing a lot. If they win auctions on the last day of the financial period, the cars then will be shown as stock; they do not participate in auctions unless they have orders from customers. On the other hand, for dealers who want to get rid of their stock, this is the last day to do so and if they want to get rid of them badly, they do not worry about the price. This means for people who want to buy a car, their chances of getting a bargain come twice a year. Of course if you are in the business everyone knows this. As dealers are aware of what happens at this time of year, they do not sell cars that they expect to get a high margin on. So if you see a car you have been looking for, now is the time to buy it.

So I went to USS Yokohama today to get cars under their market prices. We had orders for a Cube, Hi-Ace, Skyline, Crown, Benz, BMW, etc. and we tried auctions in this order. However, bidders must have had a similar idea as us. Losing one to a slightly higher bidder, our bidding did not reach the reserve price, it was not looking promising. Then on the last car we had to bid, “Audi A6 3.2FSI Quatro 2006 Black”. Most of them in the market are models between 2003 and 2004 and price ranges from JPY2,400,000 to JPY2,600,000. Not many of the 2006 model have gone to auction and in the last 3 months there was one sold for JPY3,500,000. The client who had been looking for the car was originally targeting one in 2003/2004 because of his budget but wanted one with beige leather seats inside. We had been trying for a month but there was none with beige leather seats. They were all in black. Unfortunately this one also had black seats but it was a newer model and thinking it was a good chance of getting it cheaper, he decided to give up with the colour and set the maximum price as JPY3,000,000.

It was getting dark and we started bidding on our last car of the day. It started from JPY1,500,000 but went up to around JPY2,200,000 within a short time. Just when we thought it was the beginning of the real auction, we won it for JPY2,300,000! Because we were thinking it might go for around JPY3,000,000 considering its market price, getting it for JPY2,300,000 was totally out of the blue. Maybe the seller desperately wanted to get rid of it on the day and not many other bidders were around. I rang the customer to tell him about our success, he was very happy. He thought he might have used up all his luck for the year.

Although we knew it was a good opportunity, the auction is a fair system in which we cannot always get cars for the prices we set. But if you can get all the conditions right from the sellers’ intentions to lower numbers of bidders, you can take huge advantage. Actually, not only the last days of the financial half year but from about a week before the dates there are better chances of finding a bargain. So if you missed this time, please do not miss the next around: 31 March and the last week of that month.


★ Japanese used car stock : http://jpctrade.com/stock/index.html
★ JPCTRADE Home page : http://jpctrade.com/
★ JPCTRADE Blog : http://jpctrade.blogspot.com/

(Editor)
JPC TRADE CO.,LTD.
Kato building 4F, 1-1-2 Furuishiba, Koto-ku, Tokyo
Japan Used Motor Vehicle Exporters Association (JUMVEA)
TEL : +81-3-5245-7731
FAX : +81-3-3643-4955