Cars Going Like Hotcakes, But Prices Set to Rise

According to import statistics, 23,829 cars were sold in Israel in October 2014, double the 11,634 sold in October a year earlier.

Moshe Cohen,

Cars (illustrative)
Cars (illustrative)
Arutz Sheva

Talk of impending recession has apparently not reached the ears of car buyers in Israel; this October, they plunked down nearly twice as much money as last year to buy new vehicles. According to import statistics, 23,829 cars were sold in Israel in October 2014, compared to 11,634 in October a year earlier.

Importers and dealers are expecting a healthy November and December, as potential car buyers hurry up their purchases to buy vehicles before the stage of anti-pollutions laws come into effect in January. That law will see the prices of nearly all but the small cars rise by as much as 10%, as the government imposes a tax on vehicles that are not emissions-efficient.

The official purchase tax on vehicles with engines up to 1.6 liters in size is 83%, but cars that are relatively “clean” can get a rebate of up to NIS 15,000, making their price to the consumer lower. With the new measures, the list of vehicles that will qualify for that rebate will shrink substantially, and many vehicles will go up in price, even if manufacturers do not raise prices.

Another factor that will increase prices is the recent weakening of the shekel, importers said. Many importers have not yet updated their price lists to reflect the recent 10% plus drop in the value of the shekel versus the dollar, as they are selling off the last of their 2014 vehicles. Beginning in January, when dealers by law will only be able to sell 2015 vehicles, that shekel weakness – if the dollar remains strong, as it is expected to – will add even more to the nominal shekel price of vehicles.