Buying or leasing a car in Israel

Buying a car in Israel


Buy your car in Israel or lease it? The choice depends on your needs and your budget. Dray & Natco, experts in accounting and taxation in Israel, can help you make the best decision for your situation.

Buying a car in Israel

Buying a car in Israel has both advantages and disadvantages, which we'll discuss in this section. It's important to weigh up the pros and cons before making a decision.

The advantages of buying a car

There are several advantages to buying a car in Israel:

  • Vehicle ownership : You are the owner of the vehicle and can dispose of it as you see fit.
  • No mileage restrictions: Unlike the leasingThere's no mileage limit.
  • Possibility of customizing the vehicle : As the owner, you have the freedom to personalize your car to suit your preferences.

The disadvantages of buying a car in Israel

However, buying a car also has its drawbacks:

  • High initial cost : Buying a car requires a substantial financial investment.
  • Impairment : The vehicle's value diminishes over time, which can be detrimental when it comes to resale.
  • Maintenance and repairs at your expense : As the owner, you are responsible for maintaining and repairing your car.

It's essential to take these factors into account before deciding to buy a car in Israel. Weigh the advantages and disadvantages carefully before going ahead with the purchase.

Leasing in Israel

Leasing is an interesting option for those who wish to use a car in Israel without owning it. There are different types of leasing in Israel, and each has its own specific operating procedures.

Types of leasing in Israel

In Israel, there are two main types of leasing: private leasing and operational leasing.

  • Private leasing : This is a long-term lease, usually up to 5 years, with an initial down payment of around 15% to 30% of the vehicle price, followed by monthly payments. The car is registered in the name of the leasing company.
  • Operational leasing : This formula includes maintenance, insurance and taxes in the monthly payments, and allows you to change vehicles regularly. Other services are also included.

How private and operational leasing works

The two types of leasing have different characteristics, which it's important to understand before choosing the option that's best for you.

Private leasing requires an initial deposit and monthly payments, but gives you greater flexibility when it comes to personalizing the vehicle. On the other hand, the car is registered in the leasing company's name for the duration of the lease.

Operational leasing, on the other hand, includes maintenance, insurance and taxes in the monthly payments, and allows you to change vehicles on a regular basis. However, you must comply with certain conditions and restrictions, particularly with regard to mileage.

Each type of leasing has its advantages and disadvantages. It's important to weigh them up against your needs and financial situation.

The advantages of leasing in Israel

Leasing in Israel has many advantages. Here are some of the main advantages of leasing in Israel:

  • Lower initial cost : Unlike buying a car, leasing requires a smaller initial investment. This can be particularly advantageous for those on a tight budget.
  • No maintenance or repair worries: In the case of operational leasing, vehicle maintenance and repairs are generally carried out by the leasing company. This can save you money on maintenance and repair costs.
  • Flexibility to change vehicles : Leasing allows you to change your vehicle every few years, according to your needs and desires. This can be particularly interesting if you like to drive recent cars and benefit from the latest technology.
  • Customizable payment methods : Leasing generally offers a degree of payment flexibility, with monthly payment options to suit your budget and financial situation.

It's important to take these advantages into account when considering whether to buy or lease a car in Israel. Don't hesitate to consult an accounting and tax expert, such as Dray & Natco, to help you make the best decision for your financial situation and needs.

The disadvantages of leasing in Israel

However, it is essential to consider the disadvantages of leasing in Israel before making your choice. Here are some of the main disadvantages:

No vehicle ownership

One of the major disadvantages of leasing is that you don't own the vehicle. This means you don't have the freedom to sell or modify the car as you see fit. What's more, when the leasing contract comes to an end, you have to return the vehicle to the leasing company.

Mileage restrictions

Leasing contracts usually include mileage restrictions, meaning that you can only drive a certain number of kilometers per year without incurring penalties. If you exceed this limit, additional charges may apply.

Additional costs if mileage is exceeded or damage occurs

As mentioned above, additional costs may apply if you exceed the mileage limit stipulated in your leasing contract. What's more, if the vehicle is damaged on return, you may also be liable for repair costs.

Criteria to consider when choosing between buying and leasing

To make the best decision between buying a car in Israel or leasing one, it's essential to consider a number of criteria. Here are the main criteria to consider:

Your budget

Evaluate your financial resources to determine whether you're in a position to buy a car, or whether leasing is better suited to your budget. Don't forget to factor maintenance, insurance and tax costs into your calculation.

Your vehicle needs

Identify your needs in terms of vehicle type, equipment and features. If you need a specific vehicle or want to personalize your car, buying may be more suitable. On the other hand, if you prefer to change your car regularly, leasing may be a better option.

Expected duration of vehicle use

Consider how long you plan to use the vehicle. If you plan to keep the car for a long time, buying may be more advantageous. If you only plan to use it for a few years, leasing may be a better solution.

The importance of vehicle ownership to you

Think about how important vehicle ownership is to you. If you want to own your car, buying is the best option. If this is not a priority for you, leasing could be an interesting solution.

Tax and accounting conditions in Israel

Take into account the tax and accounting conditions in Israel, particularly with regard to VAT and possible tax deductions. Consult an expert in accounting and taxation, such as the Cabinet Dray & Natcoto help you assess the tax advantages and disadvantages of each option.



Kanfei Nesharim 68. Merkaz Oranim.

Tel Aviv

31 boulevard Rothschild


Phone : 02 631 9000
Fax: 02 631 9005
Email : office@cpa-dray.com

Boruch Levenson - CPA

A native English speaker qualified in both Israel and the UK, Boruch cares for the English speaking clients.

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