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Is it Worth Using Your Oleh Discount to Purchase a Car?
An Oleh (new immigrant) receives a discount (off the taxes), up to 12% approx, when purchasing a new car. No matter how long you have been living in Israel, the opportunity to save money is enticing.
To use your Oleh rights, the following restrictions apply:
1) Only two (2) drivers are permitted to drive the vehicle
2) You have only three (3) years to use your Oleh discounts to purchase a car
3) Four (4) years must elapse from the date of purchase before you sell to an Israeli citizen or you are heavily penalized.
4) Within four (4) years of owning the car, it can be sold to another Oleh. This is called “Passport 2 Passport.”
We are asked daily, what seven (7) seat cars we have to offer with Oleh discount. We at Zvi Cars have seen a large drop in sales of P2P cars in recent years. We speculate the reason for this is the following:
1) As other discounts are available (see below) there has been a drop in sale of cars purchased using Oleh rights. (It is possible to use two (2) discounts).
2) Most families that own a seven (7) seat car, keep it for many years.
3) An Oleh who is leaving the country and wants to sell his vehicle expects “top dollar” for it and the discount offered is not substantial.
Dreams of a Minivan?
Jeremy Clarkson (popular English car journalist formerly Top Gear presenter) jokes, life is over once you purchase a minivan. If a car is an extension of ones clothes, then it may appear he has a point. BMW, Ferrari and Porsche make sport cars that are a thing of beauty, but not seven-seaters. But, most that read this article have large families and therefore need a vehicle that can move them around. The high cost of new cars in Israel makes, for most of us, buying a one, out of our range. That’s why minivans perform so well in the used market, often selling higher than book price. The king of the road is he/she who has the most seats, and anyone who lives in Israel and has more than three kids can’t help but desire the minivan.
Because of the Mazda 5’s Rock solid build quality, it is Israel’s most popular seven-seater. But it isn’t fuel efficient as a Toyota Verso or Mitsabushi Outlander, which we prefer. For moving your family, Toyota Siena is almost a flawless minivan, sure it is held in higher regard, especially for those that come from the USA. Both Ford SMax and Galexy are desirable and fairly reliable. Post 2012 models had fewer problems. Nissan Qashqai +2 is a very accomplished car but because they cost more than the other mentioned her, there are fewer on the used market. The Verso and the Outlander are the only seven seaters that are currently being made that have no known issues and are fairly affordable. A 2014 Verso starts around NIS 90,000 while an Outlander will set you back NIS 115,000. Being very fuel efficient as these are, don’t be alarmed if they have been driven a lot. 25,000 km per year is normal for Israel and doesn’t do any harm to such a well made vehicle.
The Outlander may have seven seats but only children can sit in the back row. The trunk isn’t huge, 308-litre, only 22 more than the Mazda 5. Lots of pockets and cup holders that makes the cabin a nice place to be in.
The Mitsubushi Outlander tops our list of recommended minivans for 2013 till 2017. This practical and luxurious Minivan is roomy enough for most families, with enough space to comfortably seat seven people. And it doesn’t drives like a van either – the Outlander is responsive and comfortable to drive, with very little body roll, it does feels like a quality car. The new cool is a Daddy that has a SUV seven-seater.
Electric Vehicles – An Alternative to Gas/Petrol?
Nowadays there are a multitude of engines and fuel sources for our vehicles. Each has their up and downsides. This article is meant to be a reference in helping you choose the best powertrain/energy source for your lifestyle. Today, we discuss the merits and drawbacks of Electric.
Electric Vehicles:
Taking the hybrid concept a step further, electric vehicles (EVs) use no fuel and produce no emissions, although some suggest that their production requires more energy and natural resources to make components compared to a normal petrol engine. Running costs are minimal. As with hybrids, driving style and environment can significantly impact EV range and performance. Driving aggressively quickly drains an EV’s batteries, as does hills and mountains, while heat or hot climates can degrade storage capacity. As such, EVs are most optimal for individuals who have easy access to vehicle charge ports and do a lot of their driving in cities or have shorter commutes. On the plus side, because EVs have far fewer moving parts than cars with internal combustion engines, they tend to have stellar reliability, with longevity only limited by battery condition.
EVs aren’t fully established yet in Israel. For example, the most established line of EVs, that went out of business, was the Renault Fluence ZE, produced by a company called Better Place in conjunction with Renault. All pre-owned model upkeep and maintenance will be performed by Renault. The Fluence ZE was very economical to drive and cheap to insure, as most EVs are, but its range wass limited to 100 kilometers per charge – perfect for city or suburban commutes, not so great for long highway trips. Charging EVs can actually be accomplished right outside your house, and in the case of the Fluence ZE, one can have a charger built inside your garage for a fee.
At present, there are no new EVs on sale in Israel. If you are really set on an EV, an alternative is a plug-in hybrid such as the Mitsubishi Outlander. Consisting of an electric motor, battery, and a petrol engine, these vehicles have an electric-only range of between 32 – 64 kilometers before the petrol motor kicks in to recharge the onboard batteries. In the case of the Mitsubishi Outlander plug-in hybrid, electric-only range is rated at 52 kilometers. This class of vehicle perfectly bridges the gap between hybrids and EVs. Efficient, practical, cheap to run, and without the anxiety of range restrictions, plug-in hybrids should make your short list of cars to consider.
Efficient Alternatives to Petrol – Part Two
Nowadays there are a multitude of engines and fuel sources for our vehicles. Each has their upsides and downsides. This article is meant to be a reference in helping you choose the best powertrain/energy source for your lifestyle. Today, we discuss the merits and drawbacks of hybrid cars.
Hybrids are a great choice for the environment. They produce less carbon dioxide emissions, and are very efficient, particularly in city driving – even beating out diesels in urban environments that feature a lot of stop and go traffic. If your lifestyle involves significantly more city driving than highway driving, a hybrid might very well be the car for you. It needs to be said, however, that how one drives a hybrid has a large effect on efficiency. Really pushing a hybrid powertrain quickly drains its battery packs, forcing the engine to kick in and work hard, which burns more petrol.
In Israel, there is not much diversity in the hybrid segment; our market features either iterations of the Toyota Prius or the Honda Insight. In general, the Toyotas are mechanically excellent and employ advanced technology, but are expensive to repair whereas the Hondas are cheap to repair but make use of more basic technology. If you’re looking for a hybrid to transport more than 5 people in Israel, your sole option is essentially the Toyota Prius +, but that’s not a bad thing! Not is it the same price as the Mazda 5, another 7-seater, it uses half as much fuel, and Prius buyers are eligible for government subsidies.
Efficient Alternatives to Petrol – Part One
Nowadays there are a multitude of engines and fuel sources for our vehicles. Each has their upsides and downsides. This article is meant to be a reference in helping you choose the best powertrain/energy source for your lifestyle. Today, we discuss the merits and drawbacks of diesel.
Drop for drop, diesel fuel contains 50% more energy than petroleum. Although typically more expensive than petrol engines, diesel engines achieve higher fuel economy, especially on the highway, than their conventional counterparts. If you plan on keeping your car for many years and your driving involves a significant amount of highway commuting, then a diesel engine should make your short list. A real world example would be the VW Golf TDI, which achieves 18.6L/km on the highway – just a hair short of a comparable hybrid.
Diesel engines produce much more torque (the force that throws you back into your seat when you accelerate – than petrol powertrains). This is a boon when driving in the city, where glass-smooth pull can really help you fill holes in traffic. On the whole, however, diesel engines produce less horsepower, and are slower to 100 KPH than petrols. Its important to note that diesels tend to not be as refined as petrol offerings; more vibrations pass through the cabin, especially at idle.
In theory, diesel powertrains tend to be more durable than petrol engines. Unfortunately, in practice – in Israel – gas stations and garages often water down their diesel supply which drastically reduces the life of the engine compared to petrol and can be expensive to repair. Regarding emissions: manufacturers have many different ways of meeting countries’ emissions requirements. The most common involves spraying a diesel exhaust fluid catalyst into a vehicle’s exhaust flow. This fluid, know as DEF or ADBLU, needs to be refilled every several thousand kilometers in order to for your diesel vehicle to be emission-compliant. Mercedes-Benz in particular are known for their line of very reliable, very efficient diesel engines.
New car Buying Tips
1. Do Your Research
Knowledge is power. It’s a mistake to arrive at a car lot without first researching the car you want to buy. You can find out just about anything you want to know about the Israel automotive market online. Look to Yahoo! Groups and recent immigrant forums (Nefesh B’Nefesh) on Facebook for advice; cars you might buy abroad might not be right for your needs in Israel. For example, large minivans or SUVs in the United States would prove to be a nightmare to park in any major Israeli city and are very expensive on the road. The cars that constitute the Israeli car market largely come from Europe, so look to European auto guides such as Autocar, Evo, or Whatcar? to get a better idea of the technical specifications of cars you might be interested in. Some things to be aware of are engine size, fuel economy numbers, reliability estimates, and performance. It’s worth noting that smaller engine sizes tend to be more practical in Israel.
When interacting with dealership salesmen, be mindful that they will promote their own brand over any other, regardless of whether or not that brand of car is right for you. One benefit to using an agent such as Zvi Cars is impartial advice and guidance combined with years of experience in the Israeli automotive market. Sometimes choosing the right model could save you thousands of shekels per year in running costs and might spare you the cost of switching models completely, as is oft the case with new immigrants.
2. Financing – How and With What
As you have discovered by now, cars are expensive in Israel because they are subjected to 100% VAT. Many people obtain financing, but this isn’t especially feasible for new immigrants with no credit history in Israel. As a new immigrant (over 6 months into absorption), the finance company might lend you up to 100% of the value of the car, payable over three to six years. The interest is typically around 7%, but it’s worth checking with your financier to see if they will offer you a lower rate.
3. Discounts and Incentives
In our previous article, we discussed using your Oleh Rights to obtain discounts up to 12% off the list price of a new car. However, buying with Oleh Rights adds restrictions that can make ownership prohibitive.
There is a popular trend among Israelis to buy new cars from leasing companies because the savings are similar to that of what a Oleh can get but without the restrictions.
How to Buy A Pre-Owned Car in Israel
Whether you’ve just arrived to Israel, been here for 30 years, or are a first time buyer. Buying a used car is pretty much akin to a poker game. Keep your head, keep your focus and you’ll win. You might have noticed dealers in Israel are not as polite and helpful as abroad. You have also probably felt overwhelmed searching on Yad 2 (Popular national website for buying cars). Here’s a few fail-safe pointers when deciding on a car that we at Zvi Cars feel will aid you.
Leave your ego at home. Cars in Israel often are 200-300% more expensive that they are abroad. In other words, it might be best to stop dreaming about aspirational vehicles or those that would hoist you up the social rung. Bear in mind, the sweet spot in Israel is a reliable people mover that won’t chuck you into overdraft and plaque you with maintenance issues.
Be practical and sensible; do not buy a model because the dealership is offering a holiday for two or a low interest scheme. Identify a vehicle that suits your needs before subjecting yourself to an onslaught of marketing.
Bring your significant other with you! You’ll want them not only to be on board with your purchase, but their opinions could be invaluable.
Find the used car’s true market value at ‘Levi Yitzchak’ also known as Mechiron or blue book. Levi Yitzchak releases a copy of used car price guides every month. You may also check Yad 2, although it is not industry standard. Yad 2 has it’s own price list for advertising on their website. Private sellers often quote the Yad 2 because it is higher. All dealers and insurance companies use Levi Yitzchak. The proper price for a certain used vehicle is not necessarily the one indicated in the Mechiron – this gives you just an average price. It’s ‘guide book’, not a ‘rule book’. The actual value of the vehicle depends on a car’s condition. The price is based on, among other things, mileage, age of the car, number of previous owners, accidents, etc. All these factors are converted into the price the car is worth.
Beware of scams and dealers selling substandard cars. The most frequently asked question amongst Israeli car buyers is: “has it been in an accident?” If a car has been damaged in a collision, even if it has been repaired by the manufacturer it could compromise the safety of the vehicle. Expect the price to be discounted by 10 – 50% depending on damaged caused.
Passport 2 Passport – Oleh Rights Explained
As a new immigrant you can save money by invoking your Olim rights for new cars.
Passport to Passport is the transaction of a pre-owned car (Yad 2) Olim to Olim, where the seller can pass his or her Oleh discount on to the buyer. New Olim have three years to buy passport to passport from the day they immigrate.
You will save between 8% and 12% off the MSRP/Mechiron value. Passport to Passport transactions hold the following restrictions:
4 years need to elapse from date of purchase before you sell to an Israeli citizen.
Only two drivers are permitted to drive the vehicle.
We recommend you only use your rights for expensive cars such as minivans, executive saloons, and sports cars, where the saving are significant. We can help you save money on most cars without the Olim restrictions.
We are frequently asked if 12% is the maximum allowable discount the government gives. The answer is: the government gives more money to Olim and less discounts on cars than it used to, so deductions do not top 12%
Buy a New Car for Less
There are a couple of ways new immigrants can save money on their car purchase. One such method involves invoking your Olim rights.
You will save between 8% and 12% off the MSRP/Mechiron value.
Conditions for using Olim rights include:
1) 4 years must elapse from date of purchase before you sell to an Israeli citizen.
2) Only two drivers are permitted to drive the vehicle.
3) You have three years to use your Oleh discounts to purchase a car.
Helpful Hints for Buying a Car in Israel
When it comes to used cars, “best deal” doesn’t mean the cheapest one. Your goal is to look for a car in good condition for reasonable price. In Chutz l’Aretz it was relatively easy and common that people bought a cheap used car, lovingly labeled in the UK as “old banger”.
Here in Israel this doesn’t exist. The demand for a “cheap car” is so high, it keeps the prices up. Often the question arises, what’s better, a well made Japanese made car such as a Toyota Corolla 2004, 150,000 km for ₪25,000 or Chevy Optra 2009, 100,000 km, for ₪25,000. Many dealers would preasue you to purcahsethe Chevy. The Toyota will last for another 10 years easy, the Chevy would would be lucky to last till the end of the year.
Remember, the proper price for a certain used vehicle is not necessarily the one indicated in Mechiron book – they give you just an average price. The actual value of the vehicle depends on a car’s condition. Two cars may only look the same. One may have been maintained so poorly and the engine won’t last long after you buy it. Previous owner of another vehicle may have been religious about maintenance, was using only synthetic oil, has done the rustproof and so on. Without a doubt, I’d rather pay ₪10,000 more for this second car just to have peace of mind driving it.
How to determine how much you will have to pay for a certain model? Just to show you as an example, I searched the used car dealer-ships for a three years old Honda Civic. I found 10 vehicles with the price ranging from ₪60,000 to ₪90,000. To be realistic, I know that for ₪60,000 it was probably in accident or high mileage and not well looked after. ₪90,000 seems to me too high. But there are quite a few cars for ₪70,000 – 75,000 price range – this looks more realistic to me. etc.
Set yourself a firm limit of how much money you want and can afford to pay for a car. The process of buying a used car can be time-consuming and stressful and it might be difficult to resist the urge to buy more expensive vehicle, especially when higher total price is hidden under “low” monthly payments. Often dealers could try to push you into buying more expensive vehicle to increase their commission. In fact, this is very common situation when people rush into buying a car or a truck only to realize later that they cannot afford paying for it.
Thousands of people are searching the Internet for an answer to “How to get out of a car deal?” You want to buy something that you can afford, something that will not put excessive financial strain on your family budget, so you need to set yourself a firm limit. When we give advise on cars we can be as natural as possible, because our fee is set, the buyer pays us a ₪1,000 fee (after the sale). Therefore we only recommend what is best for you.
Let’s take a look at some prices: ₪50,000-₪80,000 – This is the average minimum amount of money one would need to spend on a ‘decent’ car 3 to 4 years old. This would be a typical car (not a luxury car) sold from a used car dealership. They usually have, what would I recommend as a perfect choice, leased in one-owner certified vehicles that were sold new and serviced at the same dealership. Leased cars are recognized as good buys as they are well looked after, or the leaser has to pay a large fine. You can expect to save about ₪10%. They often come with higher mileage, expect about 35,000 km per year. This shouldn’t alarm you. Commuting between cities in Israel is common, and the car can handle highway driving much easier than inner city traffic driving. Usually such a car may last for another few years relatively trouble-free if properly maintained. For ₪20,000-$40,000 you may be able to find a 6 to 9 year old used car with relatively high mileage which still might be in good shape. However, it may take a lot more time to find a good condition used car in this price range. Typically, independent used car dealers sell cars within this price range. For ₪10,000-₪20,000 you may be able to buy something that can serve as simple transportation to get from point A to point B. More than likely it may be a car with high mileage sold by a private owner. Expect to visit your mechanic more often with this kind of vehicle. Don’t forget that aside from the car price you may need to pay extra for the yearly test-registration and there may be other charges to consider.