Why Japanese Salvage Cars?

 

We believe that Japan is the best place to buy salvage cars mainly because cars in Japan are very carefully maintained and the Japanese roads are renown to be the best in the world.

Firstly maintenance standards for cars driven in Japan are one of the highest in the world.

Secondly Japanese government discourages people to own cars more than 5-6 years through a tier based "shaken" (technical car examination) system - the older the car is the more "shaken" tax you have to pay. Basically this system encourages people to buy new cars since shaken taxes vary greatly depending on the age of the car.

Thirdly Japanese roads indeed are the best in the world. There are a lot of SUVs in Japan but most of them hardly saw any dirt. Usually, suspension is only at about 90% of its original (new condition) after being driven on for 6-7 years! And lastly repair costs in Japan are very high making customers buying a new car rather than repairing a damaged car even if it is easily reparable, has low mileage or in a good technical condition - making Japan a very attractive salvage car market.

Tips and advices

Once you consider to buy a mpv car, here are a few advices for you.

1. Warranty - Some car sellers provide warranty, such as Naza. They provide 1 year warranty on your recondition cars albeit a bit higher price. Some does not, which you may need to spend a little more or a much lot more if there is something wrong with the car, especially the internals. The internals I am referring to is the engine internals, which cannot be seen with the naked eye. Remember, sports car are sporty. Usually comes with turbo or high revving, these cars are prone to abuse. Better be safe than sorry. It is also extra wise to have extra cash in hand for emergency repairs. If the car is bought from support of local manufacturer, like Honda, BMW, etc, usually 1-3 year warranty are given. Grey imports does not, with a few exception, refer FAQs no.5.

2. Research - Do some research on the sports cars that you want to buy. If you are not savvy and does not know what is a ball bearing turbo, it is wise to ask a junkie friend/mechanic to go along with you. Also, I have noticed that some of the dealers are faking the year of manufacture. Be very sure that the car is manufactured the year that the dealer is claiming. Some of the models sold have been facelifted, but they are selling the old models by renewing the AP year. For example, the car is 2003. Law says it cannot sell more than 5 years old, by changing into another AP or recycle it, the car suddenly becomes 2004 unregistered. Some of the cars have facelift version, like the DC5 Integra type R. Year 2003 and below, the bumpers have the round shape below the headlights, but after the facelift on 2004, it is now flat. If you see the cars still appearing next year, that means it is a year 2003 or below car but renewed with a 2004 or recycled AP. Buyers who are not savvy, just bought it without knowing.

3. Parts - Often, parts can be obtained from direct manufacturer of the car make, but it cost a bomb to get them. Another cheaper solution is to find half-cuts or the parts itself in chop-shop or known as kedai potong. However, these parts offer no warranty and often does not last as long as the original items. Another method is also to source from performance shops which supplies performance parts. For the same price or a bit higher, you can change it to performance items. The last solution if there is no parts at all in our country, you might resort to ordering online with a heavy shipping cost from the US or other countries.

4. Affordability - Consider all of the cost above before your first purchase. Know what you can afford or what you cannot afford before buying. Always make sure that you do not need to top up the bank just in case you need to sell your car in case of any financial difficulties.

Let me do a basic calculation for you based for example, a Toyota Wish year 2005 facelift. Just a rough calculation.

*Car price - RM118,000.
*Downpayment - RM18,000
*Bank loan - RM100,000 over 7 years at lets say 2.7-2.9% - RM1400++
  per month.
*Petrol - RM400 or more perhaps.
*Insurance - 1k+ depending on NCB. Let's say 1,500.
*Roadtax - RM300+ because it's 1.8cc.
*Repair - Let's set it a 5k a year just in case.
*Depreciation estimated - RM10-20k a year. First year depreciation
  confirmed at 20k+, as car dealer is buying at 90k or less, unless you
  manage to find a direct buyer which they may offer at RM100k or more.

*Total estimated cost = Monthly installment + Petrol + (Insurance /12
  months) + (Roadtax/12) + (Repair/12)
*Total estimated cost to own a RM118,000 mpv car a month is around =
  2k+ for a 118,000 car.

*Total cost if you sell your car first year = RM18,000 gone if you sell at
  RM100,000 + 24k for running it on the road, which is you lost a total of
  42k.

5. Willing buyer, willing seller - Always remember this term. Only if there is demand, there will be supply. I have noticed a lot of sellers are selling at the original cost or less a bit than the cost they bought, because they are not willing go lower. Why you may ask, is simply based on the calculations above. If you do not pay a high downpayment for the car, if you would to sell it maybe 2-3 years later, you will have to top up the bank. So the sellers die die must sell at that price. But buyers do not want to buy at the price. What happens? No sale. As a buyer, always judge whether the car is worth your money. That is why affordability is very important.

6. OK, I WANNA BUY! - Finally, everything is settled and now you can buy the car.

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These are some of the common questions asked by buyers

 

1. What does it re-cond means ?

Re-conditioned/Refurbished/Re-whatever cars is a term where used cars from countries of origin are brought into malaysia, get clean up from the messy state if there is any (for example a grade C or D car) where the seats cushion are torn, engine bays are dirty, paints chipped off and they clean up the whole car. Re-wrap cushions, cleaning of engine bay etc. After reconditioning the car, it is now ready to be sold as unregistered cars.

2. What does it unreg/unregistered means?

Unregistered means the car is not registered yet in Malaysia (means car were bring in from other countries/imported), there is no owners yet in Malaysia for that car. However, unregistered is not NEW. The car has been used or maybe abused in the original country before reaching Malaysia, they have the original documents from the country it originates from. Usually like countries from Japan, they have a document stating the mileage before it leaves the Japan shore. (Easy to say re-cond is unregistered car).

3. What the different means for used cars?

Used means the car has been registered in Malaysia with 1 or more owners (no matter even if the car is re-cond/import new/local brand). Subject to further mileage and further abuse. Interest rates is between 4-5% or more depending on the year.

4. How about imported new, what does it means ?

Imported new cars are directly imported from the origin manufactured countries. These cars are never driven on the road before by one except maybe transporter. An example would be the new Honda Civic Mugen-RR direct from Japan. Normally in Malaysia the importer that bring imported new car is a official franchise or we call it distributor for the brand new cars they bring in. Like a Naza Italia is a official importer for brand new Ferrari & Maserati from Italy. Other like Bermaz is a distributor for brand new Mazda from Japan & etc. In other way also a rich owner order it to be shipped here and pay all the tax and duties himself with an AP. No AP, no import. (Imported cars normally called CBU cars)

5. I heard about grey import & what is the differentiate?

Grey importer refers to dealers which imports car that is not a franchise holder of the car model and does not carry manufacturer warranty. For example, Toyota Caldina, which UMW Toyota will not service nor provide parts for the car. Grey Import does not provide warranty for the cars sold usually with the exception of a few big ones like Naza. Grey import imports car from brand new to reconditioned.

6. How about the resale value for this re-cond car ?

Banks refer your value of the car by the year of make or year manufactured, not the year of your registration in malaysia. This serverly impacts your resale value of the car, especially sports car. For example, you bought an unregistered 05 car, hence you are the 1st owner. This post is year 2010, so your car will be registered as 05/10. And remember, your car is considered as a 5 year old car if the manufacture date is 2005 from the bank point of view.
So you drive it for 7 years (finish installment), your car is now 12 years old. Bank will still provide loan albeit a bit high on the intrest, maybe around 4%-5% or more, but the value of the car maybe will hover around 40-50K depending on the market and demand. If you take on a 9 year old, the car is 14 years old, may not qualify for bank loan and you will need to find a cash buyer. Cash buyers usually mark down your car price 10% or more due to small amount of potential buyers.
For example, if you bought a car lets say 130k, tommorrow if you sell it, it is worth 110k if you trade in to a car dealer. Instant 20k vanished. Why? Because your car is now a 2nd hand car and the interest is higher. So if you sell it as 10k less, there will still be no buyers because they would prefer unregistered ones because of the low interest.

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