Cars are expensive in Israel, used cars are the normal purchase, and the paperwork is lighter than the price tag suggests. Here is the process and the traps.
Ask first whether you need a car in Jerusalem at all: the light rail and buses cover most of the city, parking is scarce in the older neighbourhoods, and Gett and car-sharing fill the gaps (see the transport guide). If you do need one, expect to pay more than you would elsewhere because of purchase tax and VAT, expect to buy used, and expect the transfer of ownership to take an afternoon at the post office.
Why cars cost what they do
Every imported car carries purchase tax, scaled by its emissions and price, and VAT on top; there is no domestic manufacturing to undercut it. Used prices follow the new prices down, so a three-year-old car holds a large share of its value. Running costs, fuel, the annual licence fee and insurance are also on the high side. Budget for the whole picture before you fall in love with a model.
New, used, or ex-lease
- New: importers own or franchise the dealerships, so headline prices barely move; negotiate on extras, delivery and warranty instead. Delivery times vary by model.
- Used from a private seller: Yad2 is the market. Prices are negotiable; the seller expects it.
- Ex-lease and ex-rental: the leasing companies sell their three-year-old fleet cars through their own lots, with service histories and modest prices; the mileage is high but the maintenance was done.
- Used from a dealer ("trade-in" lots): more choice and financing, less bargaining, and a warranty of some kind.
- Leasing yourself: private leasing packages bundle the car, insurance and service for a monthly fee; convenient for a first year, expensive over time.
Checking a used car
- Pull the history. The registration record shows previous owners, whether it was a rental or lease car, and the last test; paid history reports add accidents and mileage.
- Check for liens. A car with a loan against it stays encumbered after sale; the seller must show it is clear.
- Independent inspection. Every city has garages that do a pre-purchase check for a fee; in Jerusalem use one the seller did not choose.
- Test drive on a hill. Jerusalem's hills expose a weak clutch, gearbox or brakes within a few minutes.
The paperwork
Ownership transfer (haavarat baalut) is done by both parties at an Israel Post branch, or online through the Ministry of Transport's site, with both IDs and the registration document; the buyer pays a small fee and drives away with the record in their name. Before that, arrange insurance: the compulsory policy must exist before the car moves, and the seller's policy does not transfer. Then the annual licence fee (agra) and the annual roadworthiness test (the "test") at a licensed testing station keep it legal; the test is due once a year and the sticker goes on the windscreen.
For new olim
Olim have historically been entitled to a reduction in purchase tax on one car within a period after aliyah, with conditions on how long the car must be kept. The rules have been revised more than once; check the current terms with the Ministry of Aliyah and the Tax Authority before assuming the discount, and note that it applies to the purchase tax, not to VAT. A foreign licence must be converted within the first period after arrival; see the driving-licence guide.
Insurance, parking and the rest
Insurance is its own subject: the car insurance guide explains the compulsory, third-party and comprehensive layers. Parking in the older neighbourhoods is a daily negotiation; a resident permit for blue-and-white zones comes from the municipality with the registration and a proof of address, and Pango or Cellopark pay for everything else.
Hebrew you will meet
- rechev — vehicle
- yad rishona / yad shniya — first owner / second owner
- haavarat baalut — ownership transfer
- test — the annual roadworthiness inspection
- agra — annual licence fee
- mosach — garage
- rishayon rechev — the registration document
More everyday words, with the situations they turn up in, are in our Hebrew vocabulary guide.
Common questions
Do I need a car in Jerusalem?
Most people living in the central and southern neighbourhoods manage without one; families in the outer neighbourhoods and anyone commuting out of the city usually want one. Try a year without, with Gett and car-sharing, before committing.
Where do I transfer ownership of a used car?
At any Israel Post branch with both parties and IDs, or online through the Ministry of Transport. Insure the car before you drive it home.
Is there an olim discount on cars?
There has long been a purchase-tax benefit on one car for new olim within a set period, with conditions; the terms change, so confirm the current rules with the Ministry of Aliyah before buying.
What is the "test"?
The annual roadworthiness inspection at a licensed station, required to renew the car's licence each year. Used cars are usually sold with a fresh test; ask for the date.
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