Purchasing a Vehicle: Rules and Tips

When buying any car in Israel, one has to be careful. When buying a used car, one should be exceptionally careful. On this page you will find a list of the minimum requirements to guarantee a positive outcome when purchasing a car in good condition and most importantly, a car with no legal problems.

These recommendations are based on experience and legal expertise. Be aware that this list cannot completely guard you against car fraud or other problems.

Step One: Making the Right Decision

Decide on the type of car that you want to buy based on your real needs. Do not be influenced by the seller.

Some of your considerations should include:

• How many years do you plan on keeping the car?
   
• How many people will be regular passengers?
   
• What is the cost of insuring the car?
   
• What is the cost of the annual registration fee?

Step Two: The Price

As you most likely know, cars in Israel are very expensive. Prices can be as high as a small apartment. It is natural that when buying a car you should take every precaution to safeguard your investment.

In general, the price of a car is according to a price list put out by Yitzchak Levy. This can be bought at most bookstores, and it isn`t cheap so you might want to try this online resource first. It is issued at the beginning of every month. Do not use an old printed issue to buy a car. No one is obligated to use Yitzchak Levy’s price list, but in most cases, cars are priced according to this list.

Yitzchak Levy`s prices are based on, among other things, the mileage, age of the car, the number of previous owners, accidents, etc. All these factors are converted into a percentage of the original price of the car and can be found on a separate page in his price list. Please note: There are many cases in which there is a considerable gap between the value of the car in the open market and the price quoted on Yitzchak Levy`s price list.

Step Three: The Parties Involved

The seller should be the legal owner of the car. This can be checked by asking for his Teudat Zehut (Identity Card). If he is not the same person but only a proxy (authorized agent), you must check on his power of attorney which authorizes him to sell the car in the owner’s name. If this is the case, it is important to find out what the relationship is between him and the owner. It is always preferable to meet the actual owner of the car to verify that he really does want to sell the car.

Step Four: Obligatory Inspection

Under the new law of 2009, if the buyer does not check the car before purchasing and then he finds damages or defects, he will not be entitled to any compensation. The rule is: Buyer Beware.

The car may look very good but that does not mean anything. Please note: climate conditions in Israel are harsh and the deterioration of cars can be rapid and not always apparent.

The most suitable place to check the car is a special garage “Machon Rishui V’Bedikat Rechev”. It will cost a few hundred shekels but it is worth it. Always keep the test results as long as you have the car. The test results are only a professional opinion regarding the car’s condition and are not a guarantee that you won’t have problems with the car in the future. If there is a discrepancy between what is written on the car license and what is found by the institute, DO NOT BUY THE CAR!

When buying a car from anyone besides the owner himself you must be doubly cautious. It is advised not to complete the purchase without first consulting a lawyer (generally this will be done at no cost).

When buying a car from a dealer, rental agency or any kind of public auction, make sure to be extremely cautious! For the low price you pay, you will have to check and recheck.

The Range of Duty of Disclosure

This is how much the seller is obligated to disclose even without being asked. It is a legal question. No one expects the seller to disclose every defect of the car, and as stated above, buyer beware. The law stipulates that essential details must be disclosed before the transaction is completed. If the seller did not disclose essential details, the buyer can cancel the contract without this being considered a breach of contract.

If you buy a car for an extremely low price and you find that the car has many defects, it will be almost impossible to convince the judge that you did not know about the defects in advance. Be logical.

Step Five: The Car and Its Legal Aspects

Transfer of ownership is done in any post office branch around the country or at the Ministry of Transportation, details can be found at their site.

In order to obtain information from the Ministry of Transportation regarding a car, you must have in your possession the owner`s ID and power of attorney, your ID and the papers of the car.

Please note; if there is any legal problem involved in the transfer of ownership, it will not be possible to complete the transaction at the post office. In addition, you cannot completely rely on the information given at the post office concerning legal aspects of the car. Although the best place to receive this information is from the Ministry of Transportation, even there, crucial information may not be available. In case of doubt, especially when buying an expensive car, we strongly recommend consulting with a professional legal expert.

Step Six: Contract, Payment and Transfer of Ownership

Before paying the full amount (you will be requested to pay in cash), sign a short agreement/contract stating, at minimum, the points noted below:

• The exact date and hour you received the car
   
• The mileage
   
• The price
   
• Address and ID numbers of parties involved. Make a copy of the ID.
   
• The general condition of the car
   
• A statement if the car chassis was damaged (in this case, a different procedure for buying the car is involved, please consult an expert)

The obligation of the transfer is on the seller and he is the one required to pay any outstanding fees. Even so, it is very important to go together with the seller and finalize the transfer together.

Keep a copy of this agreement/contract and all documents of the purchase, including the documentation from the Car Institute.

If you choose not to have a written contract, the burden of proof is on the buyer. According to the law, the buyer will have to convince the judge that the seller did not disclose the essential defects during the negotiations. It is highly recommended to use a written contract. These can be found on the internet or you can ask our organization for a free sample that suits you.

Step Seven: The Insurance

The moment the transaction is finalized, the insurance previously issued for this car is automatically cancelled. Call any insurance agent. In most cases, insurance can be issued over the phone (using a credit card) in just a few minutes.

No person can transfer or sell the existing insurance without a written and specific consent of the insurer (not the insurance agent).

Step Eight: General Precautions

• Look for Forged Papers (almost impossible to recognize). Use common sense.
   
• Do not purchase a car from a seller if all you have is his mobile phone number. Obtain his ID number, home phone number and address.
   
• If the car you are purchasing was recently purchased by the seller himself – be careful, something could be wrong.
   
• If the car looks much "older or used" than the mileage shown, be careful, something could be wrong.

Step Nine: Enjoy!

Now that you are the proud owner of your own car, remember how dangerous the roads in Israel are.

Legal Problems

In this document I did not touch on the legal problems of purchasing a car (I have dealt with this elsewhere) but remember that as a new immigrant who is not always aware of the legal system, it is recommended to consult a lawyer when in any doubt. Generally this will be at no cost.
 

Drive safely and Mazal Tov!
 

Tzvi Szajnbrum, Attorney at Law