Luxury Car Importer Buy & Drive Files for Stay of Proceedings Over NIS 97M Debt
Luxury car trader Buy & Drive has applied for a stay of proceedings over debts of 97 million shekels, highlighting the severe toll of high interest rates and the war on Israel's automotive sector.
In June 2021, Uri Dgmi, one of the veteran car traders in Israel, inaugurated a luxurious automotive complex in Netanya with an investment of tens of millions of shekels. It was a car dealership unlike anything seen in Europe or the United States: three floors featuring a café, a children's play area, a synagogue, a Muslim prayer room, and even a transparent elevator that brought vehicles down from the roof to the showroom. However, at the beginning of 2026, early warning signs began to appear, revealing cracks in the empire.
Buy & Drive, which has been operating in the industry for 30 years, specializes in marketing luxury cars for importers, providing private leasing, and parallel importing. During its peak, its annual turnover crossed the half-billion shekel mark, it maintained a fleet of approximately 1,100 vehicles, and it attracted not only ultra-high-net-worth buyers but also official car importers who viewed it as a semi-institutional distribution channel in the secondary automotive market, which typically operates on the fringes. Over the past two years, it also became an important conduit for selling zero-kilometer vehicles for importers stuck with unsold inventory after 12 months, partly due to successive rounds of fighting.
In January of this year, it was revealed that the company's bank accounts and credit lines had been restricted. In a stay of proceedings application filed last month, the company attributed the crisis to a sharp rise in financing costs, a drop in demand, structural changes in the automotive sector, and the consequences of the war, which led to substantial erosion, significant losses, and growing pressure from lenders.
The Impact of the War
Starting in late 2022 and more acutely throughout 2023, interest rates in the economy rose sharply, significantly driving up financing costs on car inventory, the leasing and rental fleet, and the company's real estate property in Netanya. The company added that changes in the interest rate environment coincided with fundamental shifts in the Israeli automotive market, including a drop in demand, changes in the leasing and rental structure, the accelerated influx of electric vehicles, and sharp fluctuations in car prices. Consequently, the company bore high financing costs while sales rates and profitability eroded.
The October 7 massacre and the subsequent war led to public demoralization, economic anxiety, and a sharp drop in demand for vehicle purchases. At the outbreak of the war, the company held significant inventory, and despite plummeting demand, financing and maintenance costs continued to weigh heavily.
Rapid and Violent Reversal
Management realized that the business model defining peak years could no longer be sustained, and a deep structural overhaul was required: scaling back operations, reducing leverage, and realizing assets. The company pursued an independent restructuring effort to achieve stability.
As part of this process, the workforce was downsized, ongoing expenses were cut, and portions of its leasing portfolios were sold to industry players for millions of dollars. In May of this year, the company signed an agreement to sell its Netanya showroom for 51 million shekels, of which 5 million shekels was paid as a down payment.
In practice, this was insufficient. A tax lien imposed over a debt of approximately 10 million shekels paralyzed operations, leading the company in mid-September to file for a stay of proceedings due to accumulated debts totaling roughly 97 million shekels. The company has been appointed a settlement manager and is asking the court to approve the sale process already underway under his supervision.
This case, the details of which will likely be clarified in court in the coming months, clearly reflects the cyclical nature of the Israeli automotive industry and the economies of scale enjoyed by major players. In good times, with broad, growing demand and favorable macroeconomic conditions, car trading in Israel is a golden goose with profitability rarely seen in other sectors.
Lessons Learned from the Collapse
Whether Buy & Drive is an isolated case or indicative of an emerging trend is hard to tell. Essentially, car traders operate like banks without the opportunity for value appreciation. Two main lessons can be drawn: first, the combination of expensive credit and large inventory is a dangerous cocktail when the market turns; second, impressive real estate assets are not necessarily a substitute for stable cash flow when difficulties arise.
Buy & Drive stated: "The company is managing the process responsibly and transparently with the relevant parties and in accordance with court decisions, while safeguarding the interests of its customers, employees, and creditors to the fullest extent possible. The company believes the current procedure will enable the formulation of a framework that addresses its liabilities and creates a stable foundation for the future."
