Imagine you are Mr. or Ms. Average living in Japan, like everything in Japan, getting a car is never as simple as picking one out, putting your money down, and driving your new motor home. Many people go past some used car dealers, see some good looking cars, (some for just £500) and wonder if they're really that cheap! Well, they are, but there's more to what you see. The real costs come afterwards, before you can call that car yours, you'll have to get a parking space for it, pay the taxes on it, get insurance, and then there's the mandatory periodic maintenance check.
First ask yourself why you want a car, and if you really need it. Where you live in Japan is a big factor, if you live in the mountains or a small town, it might not be a bad idea or you'll constantly need public transport. Plus, you won't be a slave to trains and schedules, which stop before midnight, and the fact that Japan has some of the most beautiful mountains in the world to view! On the other hand, if you live in a big city, the costs can be very discouraging, in fact, they're meant to be. Traffic jams 30 miles long aren't unusual, fuel prices are high, cities are clogged with cars, and the motorways are congested.
If you still want one let's look at what's involved in that car purchase:
You must have a registered parking space and submit certification of such (Shakoshomeishou) to the police. The rental of the space varies, from a couple of thousand yen/month in the sticks, up to maybe over 100,000 yen/month in the plush areas of Tokyo. To get a parking space, some are found through estate agents (fudosan), others are rented directly from the owners. If it's from the fudosan, except for the guarantor, most of the other terms for flat hunting apply.
When you buy a car, you'll have three main taxes to pay. One is an Acquisition Tax, another is a Weight Tax, and the third is an Annual Tax every May. The first two you pay when you buy the car. Basically, the bigger the engine, the more you pay. The Acquisition Tax is around 5% of the price of the car. The weight tax for cars with engine sizes up to 2 litres are about 56,700 yen, greater than that is 75,600. Passenger cars with a 300 something or 33 in the upper right corner of the license plate (including nearly all US cars) are the highest. A 50-something on the license plate indicates a medium-size car, and the "Kei" cars with an engine of 660cc have a yellow plate and are lowest. The May annual tax for Kei cars is the lowest as well at about 5000-yen, but for larger cars the tax quickly escalates to 34,500-39,500 yen for medium cars to 45,000 yen for 2.5 litre cars and 56,000 yen for 3 litre cars. You also need to pay consumption tax when you buy fuel, and many petrol stations don't display their prices. Prices can vary and may be up to 15 yen/ltr. cheaper at some stations, a big difference.
There are two insurance programs, one is the mandatory insurance (kyosei hoken) which just covers the car, and the optional insurance (jibaiseki hoken) covers injuries/damages you may get/cause. You can decide the extras, theft, vandalism, disaster damage, lost wages, etc. Getting it would be a good idea, if the person driving that Mercedes you just knocked decides to have a heart attack, you'd be in trouble. The costs vary according to your age, if your family also drives it, how many offences you may have had, if the car has an airbag, etc.
Many people come to Japan and are very surprised that all the cars are clean, well maintained, and always running efficiently. The sensitive Japan "experts" will tell you that it's because Japanese take such pride in their work, have such dignity to drive cars that only look like new, etc. All of which are true. But the real reason is different, and you'll pay dearly for it. Cars that are 3 years old have to have a mandatory maintenance check (Shaken), which is repeated every other year. The costs again vary according to the size of the car, but basically you'll be paying 120,000-160,000 yen or so for a smaller car, and more for a larger. Also, when the car is very old, it has an official value of zero and you may actually have to pay someone to take it off your hands! After that it'll be either scrapped or sold to dealers in Asia.
Not easy is it? Yet Japan has the second largest motor industry in the world!
(Adapted from an article by Robert Murphy)