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Use of cars in Japan part 2.

Brand new is good, but used is not

In Japan there is serious stigma attached to using or acquiring anything "used". This originates from ancient beliefs and it still affects all commodities including home appliances, automobiles and even houses. Purchasing a new home in Japan, for example, will invariably result in its value shrinking by about 30% within the first five years and it will be considered equivalent to zero within 15 to 20 years. A similar attitude to cars exists. Even with the current economic slowdown and the newly acquired Japanese taste for bargains, the large majority of vehicles is still acquired as a new vehicle from a dealer by trading in a current vehicle, usually at Shaken renewal time after three, five, seven or nine years from new. Private cars sales are non existent in Japan because they are technically impossible. To pass from one owner to the next, the vehicle must pass through the hands of an authorised dealer or auction.

Constraints on the use of performance cars

Strictly enforced speed limits of 40 km/h in urban areas and 100 km/h on toll roads mean performance cars like the RV8 are very rarely used at even modestly brisk speeds. The consequence is low mileage, immaculate vehicles which have mainly been shown around by their proud owners. Car theft is virtually unknown in Japan and alarm systems are rare on Japanese cars. On the other hand, features such as power steering, electric windows and mirrors, climate control and car stereo systems are considered standard equipment. In recent years, owners of luxury or high performance cars like the RV8 have had little chance of enjoying their capabilities on Japanese roads and are most often recommended for export. Early depreciation is intense as this type of car commonly loses as much as 40% of the original value within the first three years.

Emphasis on production and consumption

Fierce competition between manufacturers and the introduction of new models every four years or results in strong incentives for new car buyers. The vitality of the Japanese economy depends on maintaining consumer appetite for its new products. Anyone with an ID, a job and a guarantor can drive any car out of the showroom with a zero downpayment and loan finance for the full purchase price with typical loan finance rates are 6% to 7%pa. In other words purchasing a new car is relatively cheap whilst owning is not.

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