Google cloud Create image from instance

I have a VM which is up and running and I have few applications in the VM. So I want to have an image of this VM so that I can create new instances with all the installed packages. I have option called clone, but instead cloning a VM I wanted to have it as an Image and create VM whenever I want.

What is the difference between image instance and snapshot?

A snapshot reflects the contents of a persistent disk in a concrete instant in time. An image is the same thing, but includes an operating system and boot loader and can be used to boot an instance.

It's described here: https://cloud.google.com/compute/docs/creating-custom-image

Basically what it boils down to:

Set the auto-delete state of the root persistent disk to false so that it is not automatically deleted when you delete the instance.
Delete the instance.
gcloud compute images create example-image --source-disk example-disk --source-disk-zone ZONE