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1. AUCTION GRADING GUIDELINE

2. AUCTION HOUSES

AUCTION GRADING GUIDELINE


QUICK SUMMARY OF AUCTION GRADES:

We consider Auction Grades 3.5 ~ 4.5 as a “grey area”. Condition can vary amount these grades depending on which auction and grading strictness at the auction. It can also vary by the inspector within a single auction. Best course is to discuss what conditions you want with your buying agent and rely on their experience.
GRADE MEANING OF GRADE
1

Multiple Meanings. Can indicate a heavily modified sports car (turbo added, piping, intercoolers, roll cage, etc). Can also indicated a Water Damage (submerged vehicle), Fire Damage, or other condition that not standard or acceptable and is therefore NOT being condition graded by the auction. It is likely the vehicle would NOT pass Japanese road registration inspection in the current condition.

2

Poor condition in need of mechanical and/or physical repairs.

3

Below Average for Car; Average Condition for Truck & Commercial Vehicles. Car will have significant body and/or interior work needed

3.5

Lower Range of Average for Car; Above Average for Truck & Commercial Vehicles. Car will have some body dents, scratches, and likely need interior cleaning. Important that your buying agent has good understanding of your condition requirements, and what work you wish to do on cars.

4

Average Condition for Car; Very Good Condition of Truck & Commercials. Average condition will still have some smaller dents and scratches on the car so if your panel work costs are the same regardless of the size of a scratch or dent, keep that cost in mind.

4.5

Above Average Condition for Car; Excellent Condition of Truck and commercial. While there should be only minor scratch or dent of smaller size, the car will not be perfect.

5

Excellent Condition for Car. There should be no flaws except only those of the most minor appearance and very difficult to find and identify. It's a "near new" condition.

6

Equivalent to New Car condition. Not commonly used, but should indicate a car that appears in like new condition, however has more than 2000km on the meter and could be more than 1 year old.

S

New Car Condition. While the condition is that of a new car, it IS NOT a new car. It should be less than 2000km driven and should be less than 1 year or at some auctions 6 months past the 1st registration in Japan. It does NOT mean the car will have all the same options or accessories as it would when rolled off new from dealership. It may have no audio head unit, and it may not have same number of spare keys as provided new. You should confirm installed options with your buying agent before placing a bid.

RA
Repaired Accident Above Average. Vehicle has been repaired, however the inspector believes it was a smaller repair done properly. These can be good cars, but condition varies by auction and inspector. Auction sheet comments MUST be read, and you should consult your buying agent before bidding.
R/A
Repaired Accident. There is no indication of how large or how well the repair was done from the auction grade itself. Auction sheet comments MUST be read, and you should consult your buying agent before bidding. Cars of grade R and A should be checked before buying.


QUICK SUMMARY OF AUCTION SHEET MARKINGS:

Auction Sheet Markings in the below table are generally indicated with a level of 1 to 4, the higher the number the worse the damage.
MARKING
MEANING OF MARKING
A
Indicates a scratch with A1 being a very light scratch, which usually means a graze that will polish. A3 will mean a bad scratch that needs paint, or can be a long this "hairline" scratch, but is given 3 due to length
U
Indicates a dent. A car may have many U1's which are pin dents that may be very small or even unrecognizable. U3 will be a significant dent about the size of your knee or more.
B
Indicates a repaired dent. B is a marking not used at all auctions and can vary in meaning. Generally it is a dent that was repaired, but still has flaws or is in need of further repair.
Y
Indicates a crack. Most commonly used on to indicate damage to front and rear light covers, but can also be used to indicate small crack or hole to aero parts and bumpers. Y1 will be small chip or crack, Y3 expect a significant repair or need to change the part.
W
Indicates wave in the paint. Area is showing signs of previous repair. W1 means a qualified inspector could identify a good repair. W2 is a repair that is visible W3 is a bad repair that will probably need to be redone.
P
Indicates fade in paint. Usually found on older cars and those of flat solid darker colors like black, navy, red, etc. P1 is common on side mirrors where paint sealant and waxing is less common. P3 will require a re-spray of the affected area.
XX
Indicates the panel or part has been replaced.
X
Indicates the panel or part is damaged beyond repair and requires replacement.
S
Indicates rust. S1 is common and minor on the underside of cars, indicating generally surface rust. S1 will also be used to indicate a paint chip (from a stone) that has rust color where the paint is chipped away. It does not mean the panel is becoming rusted. S and C are common on trucks for rear gates, rear fenders, bumpers, and underside. S3 and C3 should be checked by your buying agent.
C
Indicates corrosion. C1 is somewhat common to see on the underside of cars, and is a minor issue not affecting the integrity of the parts. S and C are common on trucks for rear gates, rear fenders, bumpers, and underside. S3 and C3 should be checked by your buying agent.
X/G on Windscreen
Indicates Chip on windscreen. If a number is grading the scale, a 1 will be small and likely repairable, 2 will repair but you will see the remnants, 3 will need a replacement windscreen. Usually the X or G will be indicated on the auction sheet in the same location as the damage on the windscreen.


CONDITION COMMENTS AND SALES POINTS:

Sales Points are indicated by the vehicle seller, and will draw attention to items the seller feels add value to the vehicle. They can be the type of key, alarm systems, after market audio, high spec audio or Navigation, aero and body kits, privacy or tinted glass, leather interior, heated sates, aftermarket parts, and other such items. There are guidelines as to what can be indicated as "vehicle original" sales points and seller comments. Generally the items listed below the PS, PW, SRS, ABS, and such checkboxes are original items installed on the vehicle. Items listed in the seller comment area (above the inspector comment area), or additional items which may not be original equipment.


Most important on the auction sheet are the inspector comments written usually to the left of the diagram image of the vehicle. This is where they will comment on mechanical issues if any, quality of repairs as they can see, sometimes the degree of the dents and scratches, and generally anything that can't be indicated by the markings on the sheet. Your buying agent should always read these comments before bidding to ensure car meets your condition requirements.


Before you start checking sheets and bidding based on the general grading system, it's very important to note that not all auctions grade with the same level of strictness, and it can vary even among the different auction houses in a particular auction group.

As a quick reference, these are the strictest auctions from our impressions:


1. JU Saitama: Although most JU Group auctions are not strict in their grading, we have noticed since about 2009 this auction in particular is extremely detailed and strict. An indicated A2 or U2 and even at times A3 scratch can be difficult to find even on a sunny day after washing the car. In general, a grade 3.5 here would match a 4 at other auction, and a grade 4 here would match a 4.5 at other auctions.


2. TAA Auction Group: Toyota Auto Auction group has long been considered both strict and consistent across auction locations in their auction grading. The general grade is usually determined by a set requirement of visible defects. Usually a grade 3.5 here will match a 4 at other auctions, and a grade 4 will match a 4.5. However, some remote TAA locations have started grading more similar to the other main auctions.


READ ON FOR MORE DETAILED UNDERSTANDING OF AUCTIONS AND GRADING
BACKGROUND SUMMARY OF AUCTION GRADING:

Auctions in Japan will list upwards of 40,000 vehicles each week. To handle this number of listings and sales the system has been highly automated and through years of refinement and improvements, it is to some degree standardized. However, the system is not completely uniform across all auction houses, and to effectively buy cars to meet clients' needs it is important to understand this point.


Auction Sheets are prepared for each vehicle being sold, and auctions have inspection staff to check and indicate flaws and defects on the vehicle. The initial specs of the vehicle, and its' sales points are filled out by the vehicle seller. The auction inspectors then check the vehicle's condition and notate any defects they find on the auction sheet. Inspectors will give a grade to the vehicle and it is then listed for sale at the given auction.


What is important to understand is that this grade is a subjective grade based on the opinion of the inspector looking at the car. Grades can vary depending who is inspecting the car. This is the "grey area" of auction grading we described above. Auction Grades can have between 1 to 3 parts;

  • General Overall Grade (usually a number 3 ~ 6, R, RA, A, or S).
  • Exterior Condition Grade (usually a letter A ~ E).
  • Interior Condition Grade (usually a letter A ~ E).

* Some auctions will provide only a General Condition Exterior Number grade and Interior Condition Letter. Also, some auctions will provide ONLY a General Condition (number grade).


It is important to notice how many grades are given on the auction sheet so you can have at least a minimum idea as to what part of the car is being graded.


While the General, Exterior, & Interior Grades provide an overall impression of the vehicle by the auction inspector, this does not necessarily include the mechanical condition. For this reason it is extremely important to rely on a trusted agent who has years of buying experience and knows how to read Japanese and comments on the auction sheets. A car with an Auction Grade of 4 CAN and DOES at times have comments such as "engine noise", "gearbox clunk", "cell motor needs change" etc.


Auctions do their best to describe cars correctly. If there is a significant error in the description a claim can be made by the buyer. However, the time limit for claim is usually 2 or 3 days after purchase and it can take longer than this to have a vehicle transported to the buyer's yard. Also, there are no claims on "subjective" condition items such as the size of a scratch or dent. The auction indicates a dent or scratch, but the rule for buying is based on the buyer's requirement to check the actual car physically to see the size or extent of damage. Grade R, RA, & 1 vehicles are also considered "No Claim" units. Therefore claims are rare and difficult.


Experienced buyers should be able to read and interpret the auction sheet, it's comments, and the intention of the grades given. It takes years of buying experience and years of attending the auction locations to understand how to do this effectively. Before the large scale deployment of high speed internet, and the advancement of online auction viewing and bidding, buyers had to attend the auctions every day to buy cars. But as the internet was more available and accepted the auctions wanted to develop a system where dealers in major cities could access vehicles for sale in more remote areas, and vice versa dealers located in the remote areas of Japan could gain access to the large number of vehicles for sale in major cities.


Auction sheets, auction grading, data access, and live online bidding were developed and continue to be refined to assist vehicle sellers and buyers in to have safe and reliable transactions. It is not a perfect system, but with a honest and trusted buying agent you can comfortably orders and stock requirements.