Car Ownership Cheapest in 15 Years, Study Shows

Eilat's port is the main entrance for ships carrying loads of brand new cars to be sold in Israel. Photo by Yossi Zamir/Flash90
Eilat’s car port. (Yossi Zamir/Flash90)

Cars are expensive in Israel, and so is gas – but both are cheaper now than they have been in 15 years, a study by a car industry umbrella group said. The result by the Cheshev group said that the annual cost of using a car in Israel had fallen from NIS 31,000 to NIS 28,000.

That translates to a cost per kilometer of NIS 1.88 for drivers who travel around the average of 15,000 kilometers a year. Between 2006 and 2011, the cost per kilometer was NIS 2.08 per year.

More dramatic was the drop in cost for fuel. In 2012, when gas was NIS 8 per liter ($7.26 per gallon), Israelis spent on average  NIS 11,400 ($2,923) to fill their tanks. Today, with gas prices at ten-year lows, that number has fallen to NIS 7,800 ($2,000). In 2002, it cost NIS 6,800 ($1,743) to fill a gas tank throughout the year.

However, the study said that the biggest factor in the reduced cost of car ownership has been a steady fall in the cost of insurance – both broad collision and theft protection insurance, and basic state-required insurance – for drivers. Last week, the Transport Ministry announced that new discounts in required basic insurance would be given to drivers with vehicles that have safety systems (such as collision-detection system MobilEye) installed in their vehicles.

Low interest rates mean that financing a car is cheaper today than it has been in a long time. Low rates alone have reduced the cost of car ownership for standard 1.6 liter engine models by 12 percent – and as a result, said the study, there has been an increase in sales for more elaborate models, such as mini 4×4 models (like the Nissan Juke) and larger engine “manager-style” vehicles.