by Yael Harari

in Society / Social Issues    (submitted 2011-03-10)

Buying and Selling a Car• As a result of a very high tax percentage on cars in Israel (causing cars to be ridiculously expensive), the car market in Israel is made up mostly of mid size and small family cars.• In Israel you can buy a car the following ways: 1) Directly from the importer – as discussed in the previous article, new Olim enjoy certain tax benefits which at times, make it more beneficial to purchase a new car directly from the importer. In such a case the importer is supposed to handle everything, including ensuring you receive the appropriate tax benefit, the licensing procedure for the new car, convenient payment plans and all other relevant issues. Like everything in Israel, it is advisable to shop around and negotiate. Even when you know the type of car you want, check with several agencies before making your choice. If the price cannot be reduced, try bargaining for "bonuses" such as security systems (alarm or immobilizer) at reduced prices, an upgraded model at a lower price etc… 2) Purchase a used car – all newspapers have classified sections containing advertisements of cars for sale which you can also find online. The tax benefit offered to new Olim cannot be exercised when purchasing any used car. Olim who wish to take advantage of their tax benefit, must purchase a car from an Oleh who purchase the car with his or her tax benefit. At times this may mean you will have to compromise on the car model… 3) Leasing – leasing is often regarded as an attractive way to purchase a car due to the relatively convenient payment plans and financial assistance offered by leasing companies. However, new Olim cannot enjoy the tax benefit when purchasing a car through leasing because the license of the car states the leasing company as the owner. One of the conditions to receive the tax benefit regarding a car is that the owner is a new Oleh, hence the condition regarding the ownership of the car, as stated in the car's license in not met. • Mechanical checkup prior to purchasing a car: 1) Where - Before completing the actual transaction it is strongly recommended to take the car for a mechanical check-up. This can be performed in all certified M.O.T stations (same place you do the annual "vehicle-test"), or specific garages that specialize in these types of check-up - details of addresses and opening hours are available online in the Ministry of Transportation's website (in Hebrew only).2) Time - The mechanical check-up may take up to an hour (for a standard family car) at the end of which the potential buyer receives a written report and an oral explanation detailing the general state of the car, mechanical condition and any discovered damage etc.. It is advisable to take the car to a check-up in the garage or MOT station of your choice and not to be tempted by the seller to go to a place "he knows", where the people checking the car may have his best interests at heart and lack any objectivity.3) Costs – the average cost of a pre-sale mechanical checkup for a standard family car is approx. NIS 450 but prices are flexible (and therefore negotiable!!) as they are determined by the MOT stations. Moreover, prices may increase depending on the type of car being checked.4) Responsibility of payment – the buyer usually pays for the mechanical examination. The reason is that if subsequent to the change of ownership, the buyer will discover some fault with the car that should and could have been discovered in the mechanical check-up, he has grounds to sue the MOT station or the garage that performed the checkup which owe him a duty of care. • Transferring Ownership: When you have found the car of your dreams and negotiated the price terms, it is time to transfer ownership. 1) Where – transferring ownership is done at any Post Office branch that is connected to the Licence Bureau's computer system. (for a detailed list of locations please see http://www.israelpost.co.il) . Assuming the transfer is between two private individuals (as opposed to a company car being sold to a private person or vice versa), all that is needed is an Israeli I.D. (Teudat Zehut) of both parties and the car's license. The change of ownership is updated on the spot. 2) Special cases : there are specific special instances where the transfer of ownership can only be carried out at the License Bureau: one of the parties is a tourist, a disabled person entitled to pay a reduced governmental fee, a car without an annual valid "test" etc... 3) Potential problems : (a) Attachment- If there is an attachment on the car, it will appear on the Post Office's computer which is connected to the Licensing Bureau's database and you will be referred to the Bureau (a body within the Ministry of Transportation) for further assistance. Moreover, it will not be possible to complete the change of ownership. An attachment is often placed subsequent to a court order as a result of the owner's debt to a municipality (i.e. unpaid traffic tickets), tax authorities, national insurance etc… (b) Lien – there is a possibility there is a lien on the car (this is more often the case when buying a car from a leasing company, as many cars are purchased with a bank's credit and the banks insure themselves by registering their interest). Liens do not appear on the computer when transferring ownership, so it is strongly advised to inspect this issue prior to commencing with any transaction, or you may find yourself with a new car that you are prohibited from using or selling. (c) The responsibility for checking whether a car has any liens or attachment is solely the buyer's. You can inspect whether the car is free from any attachment or liens with the Registrar of Pledge at the Ministry of Justice (Rasham Ha-Mishkonot). Generally this issue can be checked online through the Ministry's website, but unfortunately this is in Hebrew but it is possible to call and ask for assistance: 1-700-50-2232 or 1-700-700-684. Additionally, for a fee of approx. NIS 150, the private company "Tabo", will be happy to do this for you (for further information call "Tabo": 03-6870035). (d) Costs: there is a governmental fee for changing ownership determined by the Ministry of Transportation. For a private car at present the fee is NIS 190. Yael Harari, Adv., Esq. Co-Founder of TransHomation