Internationally, car leasing has become more and more popular in recent years. Years ago, leased cars were perceived primarily as a perk for senior executives at big organizations or employees of large companies, particularly in the high-tech industry. These days, however, leased vehicles are gaining popularity in the private market. One of the reasons for leasing’s popularity is that it allows a person to drive a very new car all of the time.
Of course, car leasing by individuals is still in its early stages here in Israel, with only a few thousand privately leased cars currently on the roads over here. However, in the United States, it is an entirely different story with around eighty percent of new cars being leased privately. While Israel is very behind the US in this area, the market for leased cars over here is growing.
Even the Israeli Defense Ministry is leasing vehicles and has announced a 3,500 vehicle lease that will be the most massive lease in Israel’s history. They also have plans to lease more vehicles. Leasing will help the Defense Ministry save money, but the same cannot be said for regular consumers. Leasing ultimately keeps people in debt and continually making lease payments for the remainder of their life.
Car leasing is a relatively simple concept. The consumer makes a down payment on the car and then make monthly lease payments based on the outstanding balance. Then, at the end of the lease, the consumer can pay the remainder of the car’s price and buy the car, or trade up to another new leased car. However, experts believe that over sixty percent of private leasing clients upgrade to a new car, which condemns them to a lifetime of lease payments. In the short-term, it can be effortless to make these lease payments, but in the long-term, your cash flow may dry up, and you will not have much to show for all of these lease payments you have made throughout the years. Financial planning experts recommend consumers to purchase their vehicles second-hand and to pay for their vehicles entirely with cash. Consumers can even complete their research online and use websites like BestCarFinder.com to find cars for sale near them. It is important that consumers research several cars before making their purchase to increase their odds of purchasing a quality vehicle.
In 2018, Israel’s car market has remained lower in the first-quarter; with 29,037 vehicles being delivered to consumers in just March alone. In the first three months of the year, 94,340 vehicles were delivered, which is around four percent less than in the same period a year prior. We will have to wait and see at the end of this year for the final statistics to find out once and for all if the car leasing trend has grown or receded in Israel.