Are Cars Cheaper in Japan

Are cars cheaper in Japan? It depends. While new cars often cost less due to lower taxes and strong competition, import fees, shipping, and compliance can add up. Used cars, especially compact models, are typically more affordable than in many Western markets.

Key Takeaways

• New cars in Japan are generally cheaper upfront: Lower sales taxes, manufacturer competition, and government incentives help reduce sticker prices compared to the U.S. or Europe.
• Used cars offer the best value: Japan’s strict inspection system (shaken) and high turnover rate create a large supply of well-maintained, low-mileage used vehicles at competitive prices.
• Import costs can offset savings: Shipping, customs duties, and modifications to meet local safety and emissions standards may erase initial price advantages.
• Compact and kei cars dominate the market: Smaller, fuel-efficient vehicles are popular and affordable in Japan, making them ideal for city driving and budget-conscious buyers.
• Right-hand drive is standard: Most Japanese cars are built for right-hand traffic, which may limit usability in left-hand drive countries unless modified.
• Research and planning are essential: Buyers should compare total ownership costs, including insurance, maintenance, and registration, before deciding to import.

Are Cars Cheaper in Japan? A Complete Buyer’s Guide

If you’ve ever browsed Japanese car listings or watched videos of sleek, low-mileage vehicles selling for a fraction of their Western counterparts, you’ve probably asked: Are cars cheaper in Japan? The short answer is yes—but with important caveats. While Japan offers some of the most affordable new and used vehicles in the developed world, the real cost of owning a Japanese car depends on where you live, what you’re buying, and how much legwork you’re willing to do.

Japan’s automotive market is unique. It’s driven by strict regulations, high consumer turnover, and a strong cultural preference for reliability and efficiency. This creates a perfect storm for bargain hunters—especially those interested in compact SUVs, kei cars, and well-maintained used models. But before you start dreaming of importing a dirt-cheap Toyota RAV4 or a tiny Suzuki Jimny, it’s crucial to understand the full picture.

In this guide, we’ll break down why cars are often cheaper in Japan, what types of vehicles offer the best deals, and what hidden costs you might face when importing. Whether you’re a first-time buyer or a seasoned car enthusiast, this information will help you make a smart, informed decision.

Why Are Cars Cheaper in Japan? Understanding the Market

Lower Taxes and Government Incentives

One of the biggest reasons cars are cheaper in Japan is the tax structure. Unlike many Western countries, Japan doesn’t impose a high sales tax on new vehicles at the point of purchase. Instead, it uses a combination of annual taxes and fees tied to engine size and emissions. This means the upfront cost of buying a new car is significantly lower.

For example, a new Toyota Corolla in Japan might cost around ¥2.2 million (roughly $15,000 USD), while the same model in the U.S. starts closer to $22,000. That’s a $7,000 difference right off the bat. Additionally, Japan offers incentives for eco-friendly vehicles, including hybrids and electric cars, which can further reduce costs.

High Competition Among Manufacturers

Japan is home to some of the world’s largest automakers—Toyota, Honda, Nissan, Subaru, and Mazda—all competing fiercely for domestic market share. This competition drives down prices and encourages innovation. Unlike in markets where a few brands dominate, Japanese consumers benefit from a wide range of affordable, high-quality options.

This is especially true in the SUV segment. Compact SUVs like the Honda Vezel (known as the HR-V overseas), Toyota C-HR, and Nissan Kicks are priced aggressively to appeal to young families and urban drivers. These models often come well-equipped with modern safety features, infotainment systems, and fuel-efficient engines—all at a lower cost than their Western equivalents.

Strict Vehicle Inspection System (Shaken)

Japan’s mandatory vehicle inspection program, known as shaken, plays a major role in keeping used car prices low. Every car must pass a rigorous inspection every two to three years, covering safety, emissions, and roadworthiness. The cost of this inspection can be several hundred dollars, and older or poorly maintained vehicles often fail.

As a result, many Japanese drivers sell their cars before the next inspection is due, flooding the market with low-mileage, well-maintained used vehicles. This high turnover creates a steady supply of affordable used cars, especially in the compact and subcompact categories.

New vs. Used Cars: Where the Real Savings Are

New Cars: Lower Sticker Prices, But Not Always the Best Deal

While new cars in Japan are cheaper upfront, they may not offer the best long-term value—especially if you’re planning to import. New vehicles depreciate quickly, and the savings you gain from a lower purchase price can be eaten up by shipping, import duties, and compliance modifications.

That said, if you’re living in Japan or a nearby right-hand drive country, buying new can be a smart move. You’ll get the latest technology, full warranty coverage, and peace of mind knowing the car has never been driven hard or poorly maintained.

Used Cars: The Sweet Spot for Savings

For most international buyers, used cars offer the best value. Japan’s used car market is vast, transparent, and highly regulated. Auctions like USS, TAA, and JU provide access to thousands of vehicles, many with detailed condition reports and low odometer readings.

For example, a 2018 Toyota RAV4 with 40,000 km might sell for ¥1.8 million ($12,500 USD) in Japan, while the same model in the U.S. could cost $20,000 or more. Even after adding shipping ($1,500–$2,500), import taxes, and registration fees, you could still come out ahead—especially if you choose a smaller, more fuel-efficient SUV.

Kei cars—tiny, lightweight vehicles with engines under 660cc—are another budget-friendly option. Models like the Suzuki Jimny, Daihatsu Tanto, and Honda N-BOX are wildly popular in Japan and often sell for under ¥1 million ($7,000 USD). While not ideal for highway driving or large families, they’re perfect for city commuting and offer incredible fuel economy.

Hidden Costs of Importing a Japanese Car

Shipping and Logistics

Shipping a car from Japan to the U.S., Europe, or Australia can cost between $1,500 and $3,000, depending on the destination and vehicle size. Larger SUVs and trucks cost more to ship due to weight and space requirements. You’ll also need to factor in port handling fees, insurance, and customs clearance.

Working with a reputable exporter can simplify the process. Many companies offer door-to-door service, handle paperwork, and even arrange for modifications to meet local standards. However, these services come at a premium, so it’s important to get multiple quotes.

Import Duties and Taxes

Import duties vary by country. In the U.S., for example, most passenger vehicles are subject to a 2.5% import tax, while trucks (including many SUVs) face a 25% “chicken tax.” This can significantly increase the total cost of importing a larger vehicle.

Some countries also charge value-added tax (VAT) or goods and services tax (GST) on imported vehicles, calculated based on the car’s value plus shipping and insurance. In the UK, for instance, VAT is currently 20%, which can add thousands to the final price.

Compliance and Modifications

Not all Japanese cars meet the safety and emissions standards of other countries. In the U.S., vehicles must comply with Federal Motor Vehicle Safety Standards (FMVSS), which may require modifications like adding side markers, adjusting headlights, or installing airbags.

These changes can cost $1,000–$3,000 or more, depending on the vehicle. Some older models may not be eligible for import at all under the 25-year rule, which allows vehicles over 25 years old to be imported without modification.

Best Types of SUVs to Buy in Japan

Compact and Subcompact SUVs

Compact SUVs are the most practical and affordable option for most buyers. Models like the Toyota C-HR, Honda Vezel, and Mazda CX-3 offer modern styling, good fuel economy, and advanced safety features—all at a lower price than in Western markets.

These vehicles are also easier to ship and modify, making them ideal for first-time importers. Many are available in both gasoline and hybrid versions, giving you flexibility based on your driving needs and environmental concerns.

Kei SUVs: Tiny but Mighty

If you’re looking for maximum affordability and efficiency, kei SUVs are hard to beat. The Suzuki Jimny, for example, is a cult favorite among off-road enthusiasts. Despite its small size, it offers impressive capability, low running costs, and a fun driving experience.

While not suitable for long highway trips or large families, kei SUVs are perfect for city dwellers, weekend adventurers, and anyone on a tight budget. They’re also exempt from many of the taxes and fees that apply to larger vehicles in Japan.

Hybrid and Electric Options

Japan is a leader in hybrid and electric vehicle technology. Many SUVs, including the Toyota RAV4 Hybrid and Honda CR-V Hybrid, are available with excellent fuel economy and low emissions. These models are not only cheaper to buy in Japan but also cheaper to run, thanks to lower fuel and tax costs.

Electric SUVs like the Nissan Ariya are also becoming more common, though they tend to be pricier. Still, with government incentives and lower maintenance costs, they can be a smart long-term investment.

Tips for Buying a Car in Japan

Use a Reputable Exporter

Don’t try to navigate the Japanese car market alone. Work with a licensed exporter who can help you find the right vehicle, handle paperwork, and arrange shipping. Look for companies with good reviews, transparent pricing, and experience with your destination country.

Inspect the Vehicle (or Get a Report)

Always request a detailed condition report, including photos, mileage, and any accident history. Some exporters offer virtual inspections or can arrange for a third-party inspection before purchase.

Calculate Total Ownership Costs

Don’t just focus on the purchase price. Factor in shipping, taxes, modifications, insurance, and maintenance. A cheaper car isn’t always the best deal if it ends up costing more in the long run.

Check Local Regulations

Make sure the vehicle you’re buying can be legally registered in your country. Some models may not meet emissions or safety standards, and older vehicles may be subject to restrictions.

Conclusion: Are Cars Cheaper in Japan?

So, are cars cheaper in Japan? The answer is a qualified yes. New cars are often cheaper upfront due to lower taxes and strong competition, while used cars—especially compact SUVs and kei models—offer exceptional value. However, importing a vehicle comes with hidden costs that can erode those savings.

For buyers in right-hand drive countries or those willing to do their homework, Japan can be a goldmine of affordable, high-quality vehicles. But for others, the total cost of ownership—including shipping, taxes, and modifications—may make local options more practical.

Ultimately, the best approach is to research thoroughly, compare total costs, and consider your long-term needs. With the right strategy, you can find a great deal on a Japanese car—and enjoy the reliability and efficiency that Japanese automakers are known for.

Frequently Asked Questions

Are Japanese cars cheaper than American cars?

Yes, Japanese cars are often cheaper in their home market due to lower taxes, strong competition, and high turnover. However, import costs can reduce or eliminate these savings for international buyers.

Can I legally import a Japanese car to the U.S.?

Yes, but vehicles must be at least 25 years old to bypass strict safety and emissions standards. Newer cars may require costly modifications to meet U.S. regulations.

What is the cheapest SUV to buy in Japan?

Kei SUVs like the Suzuki Jimny or Daihatsu Taft are the cheapest, often selling for under ¥1 million ($7,000 USD). Compact models like the Toyota C-HR offer more space and features at a slightly higher price.

Do Japanese cars have lower maintenance costs?

Generally, yes. Japanese vehicles are known for reliability and longevity. Parts are widely available and often cheaper than for European or American brands.

Are Japanese used cars reliable?

Yes, especially those with a clean shaken history. Japan’s strict inspection system ensures most used cars are well-maintained and roadworthy.

Can I drive a right-hand drive car in the U.S.?

Yes, right-hand drive vehicles are legal in the U.S., though they may be less convenient for daily driving. Some states have specific requirements for lighting and visibility.