• Business

• magazine

Owning a very expensive car, but leasing pays off for you?

Calculation Find that if you own a private car you pay thousands of shekels every month.

Many turn to leasing because it ostensibly lowers costs.

We checked that too, and you might be surprised

Tags

• vehicle

David Rosenthal

Thursday, 21 January 2021, 11:31

• Share on Facebook

• Share on WhatsApp

• Share on general

• Share on general

• Share on Twitter

• Share on Email

0 comments

Israel is considered one of the most expensive countries in the world in terms of monthly cost of maintaining a private car.

In a reality where the public transportation alternative is faltering, most of us are being pushed into a state of no choice.

But how expensive is it?

In order to test this, we asked the 'Car Account' company to prepare a calculation for us that details the real costs involved in maintaining a classic family car, with a volume of 1.6 liters that is 25,000 kilometers per year.

Hold tight?

Let’s start gently from spending per mile.

You will pay NIS 1.6 for the pleasure of using a car for a single kilometer.

The inconvenience increases when you look at the monthly cost - there is already a handsome amount of no less than NIS 3,349, on average.

How did the company's economists reach this number?

For the test, they placed the following data in the simulator: The cost of the vehicle is NIS 134,900.

Five years later, it loses no less than 55% of its value, or in other words - NIS 74,195, which is the difference between the cost of buying and the cost of selling it.

Therefore, if you divide this into a monthly loss of value - no less than NIS 1,197.

Add to that the gasoline (NIS 1,069), the insurance, the cost of the test for the car, tires and repairs, and you have another NIS 1,173.

How much money will evaporate from the bank account in the annual calculation?

NIS 41,269, including VAT. And before you cry out about the distortion in the data, we have reservations - this is an average for a new car that runs on gasoline. Insurance costs are standard and not based on a permit for use by new or young drivers, and an insured profile with no accidental history.

More on Walla!

NEWS

"If 'City of Refuge' had not been successful, I would not have had a career and I would not have been interviewed here"

To the full article

Yes, yes, more than NIS 40,000 a year (Photo: ShutterStock)

Given the economic weight of family car maintenance in Israel, hundreds of thousands of workers in Israel receive a 'benefit' from their workplace in the form of a leasing vehicle in an operating agreement, in which they usually pay a certain amount each month that makes the deal more lucrative than independently financing the full costs of car maintenance. Private.

But what is the maximum amount of money that an employee pays to pay for an operational leasing transaction?

This task was also assigned to the economists of a car accountant, and here are the results: When the deduction from the employee's salary is higher than NIS 3,167, there is no economic logic in entering into such a transaction.

The calculation is based on the assumptions mentioned above: a new 1.6-liter vehicle with an annual mileage of 25,000 kilometers.

And how did they arrive at the amount?

• Net monthly wage loss according to marginal tax including social security contributions: NIS 1,805

• Waiver of the employer's share of pension and compensation (13.3%): NIS 211

• Tax on the value of use: NIS 1,439

• Therefore, according to data from a car accountant, the total waiver of net wages, including the loss of social conditions of the employee per month, is NIS 3,455.

The high-tech industry was not harmed - leasing did not go down.

Dagan Ronen (Photo: PR, Chen Galili)

In light of all this, here comes the stage where the question arises, if the employees who get a leasing car pay so much, then where is the benefit?

"The business becomes profitable when it comes to an annual mileage of more than 25,000 kilometers, and in the event that the company finances the fuel costs and / or embodies the employee's use value," notes Dagan Ronen, co-CEO of Hitakzon - the Consumers' Club of Employees The high-tech in Israel has more than a quarter of a million members, and according to him, the reality in recent years in which quite a few companies require employees to bear some part of the car rental costs or pay the cost of fuel out of pocket, has motivated many to abandon the operational route and move to more lucrative alternatives. Vehicle accountants add that giving up an operational leasing route in favor of another alternative becomes more worthwhile in the event that the employee purchases a used and / or small vehicle.On the other hand, if the attached vehicle is also used by a young or new driver, the profitability is skewed toward the operational route. purchasing policy adapted.

one of the premises is that since the state requires workers received employer vehicles under operating leases, pay taxes worth 2.48% of the value of the vehicle. it is better for them to get a used car is lower evaluations and pay him less tax. In practice, however, noted Ronen, does not make sense Economic Income Regulations

A. that the amount of the tax, at a rate of 2.48%, will be calculated on the basis of its value on the day of purchase.

Therefore, it does not matter what the yearbook of the vehicle is - the employee will pay the exact same amount, whether it is the first month in which he received the vehicle or two years later.

Thanks must be sent to the Ministry of Finance. "

At the same time, despite the working assumption that the corona will also shock the operating leasing industry, in light of the changes in the workforce, a summary of 2020 data shows that the industry suffered a much smaller impact than the apocalyptic forecast in March. sing thousands of workers will be removed from the total work force or reduce expenses and will return the vehicle but according to the Ministry of transport in 2019 stood monument leasing vehicles to 222 thousand vehicles, while this year, the number had dropped only slightly to NIS 218 thousand.

how can we explain the difference between forecast and reality In practice, Dagan Ronen points out that the damage suffered by the high-tech industry during the months of the Corona is low in relation to the areas of trade and services.

Also, the numbers of the Ministry of Transportation include all leasing vehicles, both private and operational, and do not reflect the change that has taken place in the relationship between the two.

According to the club's data, the numbers were also vetoed this year in favor of private leasing. "

• Share on Facebook

• Share on WhatsApp

• Share on general

• Share on general

• Share on Twitter

• Share on Email

0 comments