Nine Years of Vehicle Safety Reform: Drivers Were Hesitant and Installations Plummeted

Nine years ago, in August 2017, the Knesset Finance Committee approved a discount on the vehicle licensing fee for Israelis who would install safety systems in their cars. Today, every new car comes from the factory equipped with systems capable of braking when approaching an obstacle, but nine years ago, vehicle safety systems were an innovation.

Safety systems are divided into two types: active, which can brake the vehicle before an obstacle or gently steer the wheel when drifting out of a lane, and passive, which only provide an audible alert when the driver approaches danger. The measure approved by the Finance Committee was based on passive safety systems. Owners of cars manufactured between 2000 and May 2017 could install a system that alerts when changing lanes or approaching an obstacle to receive a licensing fee discount.

The then-director of the Economics Division at the Ministry of Transport, Dafna Ein-Dor, noted at the time that "there are two million potential vehicles, but many eligible owners have not taken advantage of this for their own reasons." Ultimately, the Ministry of Transport and the Ministry of Finance agreed on a budget of 180 million shekels intended for 120,000 cars. The refund worked via a simple method: drivers received a reduction in their licensing fee of 700 shekels in the first year, 700 shekels in the second, and 100 shekels in the third. Major suppliers, led by Mobileye, announced they would sell the systems for 2,100 shekels.

Results of the Reform

Nine years later, the question arises: did the reform succeed? Data from the Ministry of Transport shows that out of 120,000 allocated systems, only 93,100 were installed. This averages to just over 10,000 systems per year out of a potential pool of 200,000 cars.

Statistics show a consistent decline in installation volumes:

1. 2018 (first year): 33,600 systems.

2. 2020: 12,000 systems.

3. 2021: 5,285 systems.

4. 2022: 3,207 systems.

5. 2023–2025: fewer than 2,000 systems.

6. January–July this year: only 420 cars.

Why were installation volumes low?

First, the average age of a private car in Israel is 7.8 years, according to the Central Bureau of Statistics. The benefit is valid for cars manufactured up to 2017, and as time passes, more cars move out of the "average age" range where installation is considered worthwhile.

Second, technology has advanced. Regulators began granting tax credits for cars with active safety systems in 2018, but manufacturers offered these in new cars even earlier. In the used car market, the survival rate of small, cheap cars is lower—they are more likely to be totaled—leaving more expensive vehicles (such as SUVs and luxury cars) on the market. If these vehicles already have active safety systems, there is no point in installing passive ones.