Israeli Vehicle Licensing Fees Based on Original Price, Not Current Value

Israeli vehicle licensing fees, known as "agrat ha-rishui," are determined by a car's original purchase price when new, rather than its current market value. This system can lead to significant annual differences, with two identical 2016 model cars, each worth a similar amount today, potentially having licensing fees of 849 shekels and 1,840 shekels, a difference of nearly 1,000 shekels per year. Vehicles are divided into seven licensing groups based on their original price, with Group 1 for cars originally costing up to approximately 117,000 shekels and Group 7 for those exceeding about 347,000 shekels. The second factor is the model year, which reduces the fee as the car ages. These two parameters create an annual fee range for private vehicles from 849 shekels to 5,364 shekels. Within each group, the fee decreases across four model year tiers. For instance, a Group 7 vehicle from 2024-2026 pays 5,364 shekels, while a Group 1 vehicle from the same years pays 1,266 shekels. By 2016 and older models, the gap between these two groups narrows. The original price category is assigned once and remains with the vehicle throughout its life, regardless of its depreciated market value. A recent tariff update effective April 2026 added between 22 and 132 shekels to the annual fee, depending on the group and model year, with higher fees absorbing larger increases. An additional 135 shekels is collected for the Israeli Public Broadcasting Corporation, uniformly for all private vehicles, regardless of their licensing group or model year. This fee is due even if the vehicle is not driven. Annual mandatory vehicle inspections add over 120 shekels, with re-inspections costing about 29 shekels. Compulsory third-party insurance, covering bodily harm, ranges from 1,120 to 1,350 shekels annually for private cars up to 1,600cc driven by individuals over 30. These fixed costs, licensing, inspection, and insurance, are required before a vehicle is driven, irrespective of mileage. The total cost of owning a car in Israel, including fuel, maintenance, and comprehensive insurance, exceeds 3,500 shekels per month.