Buying a car and vehicle insurance in Japan

I recently bought a car and insurance in Japan. At first, it can seem quite daunting and quite confusing, but with the right information – it should go quite smoothly. Here are a few things I learnt that may be useful to you.

 

What’s different about buying a car in Japan?

  • Many people buy from and sell directly to used-car dealers. It’s very rare to see a car for sale on the roadside (there isn’t even a place to park on the roadside).
  • There are two main types of cars. Your standard car and your Kei-car. Kei-cars are small with small engines, but are cheap, have low tax/insurance, and have great mileage.
  • Standard cars have a white registration plate, kei-cars have a yellow one.
  • To buy a car, you may need a juuminhyo (a certificate from your city hall with your name and address on it.
  • Even if you go in with cash, it could take over a week until you actually get the car. 
  • There are services to get the car driven to your house when you buy it. 
  • You may need to inform your kanrigaisha or landlord, the company/person responsible for the building you live in that you bought a car. 
  • By law, you have to have shaken on your car. This is not insurance but is similar to a very expensive MOT that must be done every year for old models, once in five years for a brand new car, and every two/three years for cars in between.
  • Most cars in Japan are automatic. 

 

What insurance to go for?

We went to a place called “Hoken no Madoguchi”, which isn’t an insurance company, but a company who explained how the insurance works and gives a few recommendations with a discount.
You’d be surprised but there are a ton of options you can add/remove from your insurance to alter the price, so if you know Japanese or have a Japanese partner, it’s worth a visit.
Even if you’re a native Japanese speaker, it’s unlikely you’ll know what each and every option does (there’s a surprising amount).
For example, one option is to insure you for repairs that surmount the cost of the car you hit. 
What this means is… if you crash into a car worth $1000, but the owner loves this car and chooses to repair it for $1500. Since $1500 exceeds the value of the car, your insurance will only pay out $1000, leaving you with a $500 bill to pay. 
If you wish to, you can choose to increase the amount your insurance will fork out, regardless of the value of the car.
Vandalism insurance, medical insurance, third party insurance, theft insurance, maximum and minimum payouts… the list goes on. You can make your insurance incredibly cheap (but with less coverage) or incredibly high (with incredible coverage). 

 

All about Toukyuu.

Toukyuu decides how expensive your insurance will be. It is the equivalent of a no-claims bonus. You start at around tier 6, each year you will raise a tier and the price will drop. Make a claim, and the cost will rise. Apparently, if you drop to tier 4, insurance will sky-rocket.
So unless you have a few tiers to spare (e.g. you’re on tier 25 and dropping down to tier 20 won’t hurt too much), then it’s best to avoid making a claim where possible. 

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