Israelis: Better Buy a Car This Week, Prices Are Going Up

Industry sources estimate that the price of a Ford Focus will increase by NIS 3,000 to NIS 127,000, while the Skoda Activa will go up NIS 2,000 to NIS 126,000 as will the Hyundai i35.

Daniel Schmil
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Car importers are planning to raise their prices this week in order to compensate themselves for the exchange rate at which car prices are linked and for lower profits over the past year.

Industry sources estimate that the price of a Ford Focus will increase by NIS 3,000 to NIS 127,000, while the Skoda Activa will go up NIS 2,000 to NIS 126,000 as will the Hyundai i35.

Delek Motors is planning an interesting marketing exercise with its popular family car, the Mazda 3. Since its inventory of the basic model, called the Active, has run low, the importer is focusing on selling its sportier version, which features fancier hubcaps and a rooftop window and keeping its sticker price unchanged at NIS 128,000.

Delek Motors hopes to keep the Mazda 3 as a player in the market until a new version of the model reaches the showrooms toward the end of 2013.

The prices rises this week won't be the last for 2013 because the green tax is due to be updated after a new government is formed.

The revised tax, which aims to encourage fuel savings by encouraging people to buy more efficient vehicles, will likely raise the cost of a typical family car by NIS 3,000 and sub-compacts by NIS 2,000. That will bring the price of a family car to about NIS 130,000.

As the new, higher tax approaches, you can expect the car dealers to come out with ad campaigns urging buyers to head to the showrooms before prices rise.

Meanwhile, the value of having a company car as calculated for tax purposes, once just NIS 1,000 a month and today NIS 3.075, will go up to NIS 3,224 in 2013.

Boaz Sofer, a former tax official who now acts an a consultant to leasing companies among others, argued in a recent study that car prices have fallen in real terms since 2005.

He says prices did rise from the mid-1990s until then, but because of reductions in taxes on vehicles. Sofer estimates that after taking into account inflation, car prices have fallen 16% in the past seven years.

Illustration: Car parkCredit: AP