A new car has become something that more and more Israelis find difficult to afford. According to data from the Shlomo Group, in the past four years, new car prices have surged by an average of 22% due to rising interest rates and VAT. Even a popular small car like the Kia Picanto has risen from NIS 89,000 to NIS 110,000, as the government increased taxes on economical cars by reducing green tax benefits. The price of the Opel Corsa jumped from NIS 105,000 to NIS 125,000.
And it doesn’t end there: Spare parts prices have increased on average by 17%, and comprehensive insurance costs by tens of percent, depending on the model.
It’s easy to suggest giving up a car to save money, but public transportation is still slow in many parts of the country and doesn’t operate on weekends, while bicycles or electric scooters are only suitable for relatively short trips. A used car is much cheaper to buy but is a gamble because it’s hard to know the condition in advance and to estimate potential repair costs on a car that is out of warranty.
One option to ease these price hikes and fix monthly costs for driving a new car is private leasing: Renting a car with a down payment of a few thousand shekels and then a fixed monthly fee that includes insurance and maintenance costs. Leasing companies pass on part of the big discounts they get from importers for bulk car purchases to customers, who pay less to drive a 2025 model car than they would investing in a private purchase.
Not every model is available through these plans. Popular small cars include the Picanto, Opel Corsa, and Skoda Fabia. Among small crossovers are the Seat Arona, Hyundai Venue, and Skoda Kamiq; among compacts are the Hyundai Kona Hybrid, Suzuki S-Cross, and BYD Dolphin electric; and above them, the Kia Sportage, JAC 7, BYD Atto 3, and Mitsubishi Outlander. Among sedans is the Hyundai Elantra Hybrid.
Small crossovers are the most popular group in private leasing, holding a 21% share. They are followed by medium crossovers (17%), mini cars (a shrinking market mostly limited to the Picanto, 16%), super mini models (13%), and electric models, which already take 10% of this market.
While the cost of using a new car has risen by about NIS 1,000 a month on average for private purchase, private leasing prices at Shlomo, offered under the commercial name PratiFa’oli, have increased by about NIS 300 on average.
For example, a Kia Picanto on such a plan is offered with a down payment of NIS 8,900 and a monthly payment of NIS 2,000. The larger Opel Corsa is offered with the same down payment and a monthly payment of 2,400 NIS. The hybrid Toyota Yaris Cross (NIS 151,000 in private purchase) is offered with the same down payment and NIS 3,100 per month. The hybrid crossover duo Hyundai Kona and Kia Niro raise the monthly payment to NIS 3,300. Sometimes there are discount promotions, mainly on the down payment amount.
All prices are based on 20,000 kilometers per year, but someone switching from an old gasoline car to a new hybrid can save hundreds of shekels monthly on fuel expenses, subsidizing the upgrade. Sometimes these cars can be found with a down payment lower by a few thousand shekels, especially in sales promotions to large consumer clubs.
“This is a kind of insurance against the cost of car ownership in Israel,” says Moti Burton, CEO of Shlomo Private Leasing from the Shlomo Group. “You can know how much the car will cost over the usage period and protect yourself from cost spikes in usage components, like with insurance. People have difficulty paying cash to buy a car and need expensive financing; with private leasing they bypass that difficulty.”
In the past two years, many have chosen to buy electric cars to reduce operating costs. “Beyond the environmental contribution, electric car costs have risen due to increased registration fees, and they suffer from higher depreciation than gasoline and hybrid vehicles. We also offer electric cars in PratiFa’oli for interested customers, but the current hit is plug-in hybrids, which offer about 100 km of electric driving between charges.”
Another relatively cheap deal sometimes found at Shlomo is a car that completed a three-year private leasing term with low mileage, then offered for a year to another customer at a discount of about NIS 200-300 a month compared to a regular PratiFa’oli deal. “It depends on inventory and opportunities, but it’s another option to reduce expenses,” Burton says.
Bottom line: Private leasing plans are a worthwhile alternative to buying a new car. Since much of the payment goes toward financing the depreciation of a new car, buying a roughly two-year-old used car, which has already lost about 30% of its new value but is still under manufacturer warranty, is a much better economic deal. Shlomo’s discounted plan targets this market, and it’s likely that surplus cars on the market will lead other companies to offer similar plans.