In Japan, it is possible for foreign residents to buy a car in Japan, however, the process can seem complex at first. Buying a car involves meeting several legal and administrative requirements, such as holding a valid residence card, securing a certified parking space, and understanding insurance and registration procedures. While Japanese regulations may appear confusing, with the right information and preparation, the process can be straightforward.
This guide outlines everything you need to know to successfully buy and own a car in Japan as a foreigner.
Can Foreigners Buy a Car in Japan?
The short answer is yes, however a foreign cannot simply walk into a dealership to purchase a car, there are some requirements to satisfy first.
Here are the key requirements for buying a car in Japan as a foreigner:
Japanese-Issued Identification Card:
You’ll need a valid form of identification issued in Japan, such as a Residence Card (在留カード, Zairyū Kādo), which confirms your legal status and address in the country.
Proof of Parking Space (Shako Shomeisho):
Before purchasing a car, you must obtain a parking space certificate (車庫証明書, Shako Shomeisho) from the local police department. This certificate proves that you have permission to legally use a parking space. This parking space must be within 2 kilometers of your residence. Alternatively, an official lease can also be used along with your proof of identification.
Japanese Driver’s License or International Driving Permit (IDP):
To legally drive in Japan, you need either a Japanese driver’s license or an International Driving Permit (accompanied by your original driver’s license from your home country). However, an IDP is often only valid for one year, after that you may need to apply for a Japanese license.
Japanese Compulsory Car Insurance (Jibaiseki Hoken):
This mandatory insurance covers liability for injuries or deaths caused to others in an accident. It is a legal requirement to register and operate a vehicle in Japan.
What are the options available for buying a car in Japan
As a foreigner in Japan, you have several available options for buying a car, including direct purchase, financing through a loan, or a long-term rental. All of these options are available to non-Japanese residents, although the eligibility requirements and processes may vary depending on your visa status, length of stay, and financial situation.
Buying a car with cash
The most straightforward option is purchasing a car outright with cash. This involves paying the full price upfront. This is the simplest and fastest option, especially for those who can afford it. There are no ongoing payments or restrictions, meaning you sell or modify the vehicle whenever.
Buying a car with financing
Another popular option is buying a car through a loan (auto financing). Many dealerships and financial companies in Japan offer car loans to foreigners, although approval usually depends on things such as visa type, length of stay, employment, income level, and sometimes needing to have a Japanese guarantor. Long-term visa holders, including those with work or spouse visas, are more likely to be approved. Financing or getting a loan means there is a lower upfront cost, with the rest spread out over a period of time through monthly payments. However, the car will be registered under the lender’s name until the loan is repaid in full, and interest charges will increase the total cost.
Long term rentals
Long-term rentals or leasing is a convenient alternative, particularly for foreigners staying in Japan for a limited period. Many car rental companies offer long-term contracts, ranging from several months to multiple years. These leases will also usually include insurance, taxes, and maintenance. This option requires minimal documentation and is easier to qualify for than loans, making it popular among expats and temporary residents.
Common Misconceptions
While many assume that foreigners can’t buy a car in Japan, in reality they can, but several legal and bureaucratic requirements must be met first.
Common misconceptions include the belief that a Japanese citizenship is necessary, when in fact a valid Japanese-issued Residence Card suffices. However, foreigners must also obtain a certified parking space near their residence, have a valid driver’s license or International Driving Permit, and obtain mandatory liability insurance. These conditions can be challenging, but they are not impossible to satisfy for foreigners in Japan.
Should You Buy, Lease, or Rent?
Foreigners in Japan have several options when it comes to obtaining a car. The right choice depends on individual needs, including how long you intend to stay, your level of Japanese proficiency, and your ability to deal with administrative processes. While purchasing a car offers the most long-term stability, leasing provides a simple solution for those on fixed-term assignments. For short stays, long-term rentals may be the best option.
Buying a Car
Buying a car in Japan provides full ownership and owners have complete control over the vehicle, including the freedom to customize, sell, or transfer ownership at any time.
However, directly purchasing a car involves significant upfront costs, including the vehicle price axes, registration, insurance, and mandatory inspections such as the shaken. Administrative procedures are also more complex, often conducted in Japanese. Buyers are also responsible for ongoing maintenance and eventual resale or disposal of the vehicle.
Leasing a Car
Leasing is a popular alternative for foreign residents and usually involves lower initial payments and fixed monthly fees that often include insurance, taxes, and routine maintenance. Leasing companies also handle the administrative work which is more convenient for non-Japanese speakers.
However while leasing simplifies many aspects of vehicle use, it may be more expensive over time. Restrictions on mileage, customization, and early contract termination can also apply.
Long-Term Rental
Long-term rental provides the most amount of flexibility, making it ideal for foreigners staying in Japan for shorter periods. The duration of rental contracts can range from a few weeks to several months and often include insurance, taxes, and maintenance as part of the package.
Requirements and Documents Needed
When looking to obtain a car in Japan as a foreigner, the following documents will usually be required:
Valid Driver’s License
To legally drive in Japan, you must possess either a Japanese driver’s license or an International Driving Permit (IDP) accompanied by your original driver’s license from your home country.
Residence Card (Zairyu Card)
The Residence Card, or Zairyu Card is an official identification issued to foreign residents in Japan and includes information such as your name, address, visa status, and period of stay.
Certificate of Residence (Juminhyo)
A Juminhyo is an official document issued by the local ward office that verifies your current address in Japan.
Proof of Parking Space (Shako Shomeisho)
Before registering a vehicle, you must provide proof of a parking space, known as the Shako Shomeisho. This certificate confirms that you have obtained a legal parking spot within a certain distance from your residence.
Seal Registration Certificate (Inkan Shomeisho)
In Japan, a personal seal, or hanko, is often used instead of a signature for official documents. If you wish to use a hanko, you must register your seal at your local municipal office, who will issue a certificate of authenticity.
Japanese Bank Account
Having a Japanese bank account is required for purchasing a car in Japan. A bank account is for processing payments related to the vehicle, including taxes, insurance, and loan repayments.
Certificate of Employment (if applicable)
A certificate of employment may be required, but this depends on how you plan to obtain the car. A certificate of employment will be required if you are financing the vehicle through a loan, but less likely to be required if you choose a long term rental.
Tips for Non-Japanese Speakers
- Language Assistance: Consider bringing a Japanese-speaking friend or hiring a translator when visiting government offices or dealerships to help navigate language barriers.
- Professional Services: Some car dealerships offer services in English or have staff who can assist foreign customers. It’s advisable to seek out such establishments to facilitate the purchasing process.
- Preparation: Ensure all documents are correctly filled out and complete before submission to avoid delays. Double-check requirements with the respective offices or service providers in advance.
Where and How to Buy a Car
When purchasing a car in Japan as a foreigner it’s important to choose the right method based on your length of stay, Japanese language ability, and the level of support needed. Below are the main options available for buying a car in Japan as a foreigner:
Dealerships (New and Used)
Japanese dealerships are the most reliable option, offering both brand-new and pre-owned vehicles. New car dealers usually focus on a specific manufacturer (e.g., Toyota, Nissan), while used car dealers carry a variety of makes and models.
The advantage of using a dealership is that the vehicles are properly inspected and usually come with a warranty. Many dealerships assist with registration, insurance, and paperwork. However, the prices of cars on sale at dealerships may be higher compared to private sales.
Some dealers, particularly in major cities like Tokyo, Nagoya, and Osaka, may have multilingual staff or English-language websites.
Online Car Marketplaces
Websites like Goo-net, CarSensor, and BeForward provide listings of cars for sale across Japan. These platforms allow you to filter by price, location, make, model, mileage, and condition.
One important consideration is the potential language barrier, as some sites may be poorly translated, or not translated at all. Additionally, not all sellers offer delivery to other cities in Japan, and requirements such as registration and insurance may not be included in the sale.
Expat-Focused Services
Companies like Lease Japan and Asahi Motors specialize in offering services for foreigners. These businesses offer complete buying, leasing, and rental services,with English support, maintenance packages, and registration assistance.
Private Sales
Buying directly from a current car owner can sometimes save money, however while this may be cheaper, there are no guarantees/warranties or professional inspections provided by the seller.This means the buyer is responsible for transferring ownership and ensuring paperwork is correct.
The Buying Process: Step-by-Step
Buying a car in Japan as a foreigner involves a similar process to most countries but there may be some slight differences. Here’s a simplified step-by-step guide for your reference:
1. Research
Determine the type of car you need and the best options for obtaining it, for example will you be predominantly city driving or long distance driving? Do you need a regular compact car or van? Once you have decided, make sure to set a realistic budget that accounts for both purchase and ownership costs and then compare prices online or by visiting local dealerships.
2. Contacting Sellers and Visiting Dealerships
Schedule appointments or test drives to see prospective vehicles and see what deals are out there.
3. Test Drive and Vehicle Inspection
Always test drive the vehicle and check its maintenance history. Used cars should come with a valid shaken (vehicle inspection) certificate and mileage verification.
4. Negotiate the Price
Don’t hesitate to negotiate. Prices, especially for used cars, can often be reduced, or additional services (e.g., free shaken or warranty) may be included.
5. Finalize Paperwork and Payment
Once a price has been agreed, complete the purchase agreement. Available payment methods include:
- Cash
- Bank transfer
- Loan financing (for eligible residents with proof of income and long-term visas)
Important note, the buyer should make sure their name is recorded properly and confirm the total cost includes taxes and registration fees.
6. Registration and License Plates
The dealership usually handles registration, insurance, and number plate issuance. Required documents include:
- Residence card
- Proof of parking (Shako Shomeisho)
- Seal or signature certificate
- Valid driver’s license
This process takes a few days to complete.
Costs of Car Ownership in Japan
Buying a car in Japan comes with a variety of ongoing financial considerations. These costs can vary based on the type, age, and size of the vehicle, as well as your location.
Upfront Costs
When you first purchase a car, the following costs will apply:
- Vehicle Price: The cost of the car itself, whether new or used.
- Registration Fees: Includes number plate issuance, vehicle registration, and compulsory road tax.
- Weight Tax: Based on the car’s weight, this is paid at the time of registration or during shaken renewal.
- Compulsory Insurance (Jibaiseki Hoken): Required by law to cover third-party liability in the event of an accident.
Ongoing Costs
Once the purchase of the car is complete, the following costs will apply to the buyer for as long as they own the vehicle:
- Shaken (車検) or Vehicle Inspection: Shaken (車検) is a mandatory vehicle inspection that has been designed to ensure that all vehicles on the road meet strict safety and environmental standards. The inspection applies to nearly all motor vehicles driven in Japan and needs to be completed every two to three years. The shaken can cost between ¥100,000 and ¥200,000 depending on the vehicle and includes inspection, taxes, and basic maintenance.
- Voluntary Insurance: Strongly recommended to cover additional risks such as theft, fire, or damage to your own vehicle.
- Parking: A legal requirement in most cities. Monthly parking can cost anywhere from ¥10,000 to over ¥30,000 in urban areas.
- Annual Road Tax: Determined by engine size and age of the vehicle.
- Fuel and Maintenance: Regular servicing, oil changes, tire replacements, and unexpected repairs add to the yearly cost.
After Purchase: Registration, Insurance, and Maintenance
Once you’ve completed the purchase of your car, there are several legal requirements that must be completed before you can legally drive it in Japan.
Vehicle Registration
The vehicle registration process must be completed before the vehicle can be driven. If you purchase the car through a dealership, they will usually complete this for you. If the purchase was made privately, you’ll need to submit documents to the Land Transport Office, including:
- Your residence card
- Proof of parking (Shako Shomeisho)
- Seal or signature certificate
- Bill of sale or transfer document
Insurance Requirements
Another important requirement is insurance. Japan has 2 types of insurance: Jibaiseki Hoken (Compulsory Insurance) and Voluntary Insurance (Nin’i Hoken).
- Jibaiseki Hoken (Compulsory Insurance): Mandatory and must be renewed with each shaken cycle.
- Voluntary Insurance (Nin’i Hoken): Provides broader coverage and is highly recommended. Policies can include collision, theft, and personal accident protection.
Maintenance and Shaken
A shaken inspection is required after the initial purchase, and every 2 years thereafter. The shaken inspections are legally required and failure to complete them on time can result in fines or being banned from driving the vehicle.
The shaken will typically include the following services:
- Safety checks: brakes, lights, seatbelts, horn, and windshield wipers
- Mechanical systems: suspension, steering, tires, exhaust system, and fluid leaks
- Emissions and noise tests: to ensure environmental compliance
Used cars often require a shaken inspection sooner than new ones, so make sure to consider the shaken expiration date when buying.
Frequently Asked Questions (FAQ)
Can tourists buy a car in Japan?
Tourists on short-term visas such as 90 day tourist visas generally cannot buy a car in Japan. Owning a car requires a Residence Card, proof of a registered address, and a certified parking space, which are not normally available to short-term visitors. Long-term residents or those with appropriate visas (work, student, etc.) are eligible.
Can I use my international driver’s license?
Yes, if you hold an International Driving Permit (IDP) issued under the 1949 Geneva Convention, you can legally drive in Japan for up to one year from the date of entry. When using an IDP, you must always carry the IDP and your original driver’s license together. After one year or if you intend to stay longer, you must obtain a proper Japanese driver’s license.
What if I don’t have a parking space?
Without a parking space you will not be able to register a vehicle in most parts of Japan. If you don’t have your own space, you can rent one from a private provider and submit the lease agreement to local authorities. Please note, some areas may exempt certain small vehicles (e.g., kei cars) from this requirement, but it’s recommended to check with your local police station.
How do I sell my car when I leave?
You can sell your car through the following options:
- A dealership (trade-in or direct sale)
- Used car auctions
- Private sale to another buyer
When selling a car, make sure to complete the ownership transfer paperwork and cancel your insurance and registration.
Conclusion
When buying a car in Japan as a foreigner the key steps include having a valid residence card, obtaining a parking certificate, and having a proper license. Buyers should also be aware of the compulsory insurance and ongoing maintenance costs and requirements for owning a car in Japan.
When deciding whether to buy, lease, or rent, consider your length of stay and financial situation.
- Buying is ideal for long-term residents who want full control and ownership.
- Leasing suits mid-term stays with manageable monthly costs and less hassle.
- Renting offers maximum flexibility for short-term residents with minimal commitment.
