Live Bidding
Most of the cars we buy from Japan’s car auctions are bought for our customers in live bidding. Although you may have a picture in your mind of a man holding a gavel and people raising their hands to make bids, or perhaps you will think of your experience using eBay in which bids are gradually added over a period of days, live bidding at Japan’s car auctions is not really like either of these scenarios.
Live bidding does happen through a computer system. However, it is not a long, drawn out process as it is on eBay. Instead, cars are displayed on the screen at a set time, in the order that they are scheduled by the auction, and we then bid on the cars that are customers have asked us to target using something like a computer game joystick.
Bidding is very fast. A typical vehicle auction will take anything between 10 to 45 seconds, during which time we and other bidders around Japan are putting in multiple bids by clicking on a button. As the button is pressed, the price increases in increments.
Of course, sometimes somebody else at the auction itself, or elsewhere in Japan, may click the button on their terminal at the same time, which results in the price seeming to jump up quickly. This is one reason why we have a unique guarantee which protects our customers in case bidding suddenly jumps over their maximum bid price. When this happens, we deduct the amount that we have gone over the customer’s bid from our own commission, so that you, as the customer, are never out of pocket as a result.
Some people bid live at the actual auction location. Larger auctions, such as HAA Kobe have many terminals for customers to use while they are there. However, there are many dealers and exporters like OIWA all around Japan who bid using the same kind of terminal but from their own offices.
Tendered Bids
Tendered bids (called sashine in Japanese) are a tool which we sometimes use to buy cars for customers. Since most auctions are live bidding auctions, we rarely use tendered bids as a default for buying. However, when live bidding is not available, we will submit a tendered bid at the customer’s maximum bid price.
So, how does bidding with tendered bids work? auction then figures out which one is the highest. The auction then awards the vehicle to that highest bidder at that maximum bid price.
As you can see, this is different to live bidding, in that if you do buy a vehicle using a tendered bid, you will pay the maximum bid price which you submitted to the auction. If the same car had been in a live bidding auction, it would have been possible to get it for less, perhaps. (Obviously, that would depend on the competition.)
The auctions that still use only tendered bids are quite small, so the number of vehicles we buy from them is also rather small.
There is another way in which we also use tendered bids. Sometimes, there are a lot of live bids which are going to be coming up at auction at a very similar time. Now, when that happens, it is difficult to keep track of which one is coming up when to make sure we can actually bid on all of them live.
In that case, what we do is to enter tendered bids for some of those cars to make sure that, if we aren’t able to get to them in time for live bidding, we still have our tendered bid there as a backup. The beauty of the system is that as soon as we start our live bidding for that car, the tendered bid is automatically cancelled.