How to Buy a Car in Portugal

My days of renting cars for pennies (€45 – €85 per month) are over sadly.   The price for rentals has recently skyrocketed in the last few months.  For the past year, I had a great system for renting cars in Lisbon cheap.  In February, I was able to rent a car for €45 with insurance for 29-days.  Today, the same car, from the same company costs €24 per day (€720 a month…f-me) .   Yeah, the good old days are over. This being the case, I have begun my research on buying a new or used car in Lisbon (or surrounding area) that can fit Blanca, our dog Santino Maria, our Ikea purchases and yeah…myself. I’m documenting the process of how to buy a car in Portugal for any of you who are thinking of doing the same. If you have a question that was not answered here, leave a comment and we’ll get back to you.

How to Buy a Car in Portugal

***Note:  This guide is not fully complete from my research so it may be updated time to time.

Can I buy a car in Portugal?

As a foreigner you have the right to buy a vehicle if you have at least one of the following documents:

• A Cartão de Residência (Residence Permit)  or
• A registered rental contract for a minimum of 1-year or 
• Proof that you own a home here in Portugal.  Bring your deed.

How to Change your USA Driver’s License to a Portuguese Driver’s License

How to Budget for a buying a car in Portugal

When planning our budget we had to consider lots of factors such as exchange rates, taxes (both initial and annual), gas prices, insurance, parking costs, and of course maintenance.

The exchange rate recently has been very favorable for foreigners like me who work for a US company.  Right now it’s about 1.17 Euro to 1 USD.   It’s not great, but better than it was last summer.  The allows us a bit of breathing room when planning our monthly spend.

The taxes are a big thing in Europe.   Here in Portugal, they tend to tax early in the process and do lots of “mini” taxes throughout the car buying process.  I broke this down in the tax section of this article.

Gas prices are about €1.65 per liter for SP95 (normal gas) and €1.45 for diesel.  I wish I could do electric but the car costs are a bit out of my monthly budget and reach.  I will have to though do some more research on the tax benefits of electric.

Insurance is pretty cheap here in Portugal.   It can range from 10 euros a month to 50 euros.   So that’s not a problem.

Maintenance is an issue. A lot of places will “Gringo Price” you.   Remember those scammy repair places in the US? They exist in Portugal too.  The only difference is they rob you extra because you are a foreigner and people assume you are rich.   On a more positive note, lots of places where you purchase your vehicle will offer a maintenance package already built into the car cost.  I have seen packages of 5-year to 8-years on longer loans.

Types of Car Purchases

In Portugal, there are three types of car purchases: buying a car, leasing a car, and renting a car.

Buying a Car

Leasing a Car

Renting a Car

Each of these has it’s Pros and Cons.  For us, buying and leasing match not only our budget but our long-term plan of living in Portugal.

How to Buy a New Car in Portugal

You can go to a car dealership or Tesla.  There’s not much in-between if you are looking for a new car.  The dealerships are similar to ones in the States where they have a salesperson who walks you through the whole process.   They will do the registration for you, help you with choosing a maintenance plan, and even find insurance for you.   Note that in Portugal car insurance is mandatory.

What Legal Documents Do I Need to Buy a Car in Portugal

When the vehicle is turned in for destruction to a VFV-compliant center, the owner provides the following documents:

• Form 9 (Modelo 9 IMTT) which cancels the registration
• Vehicle registration documents

Buying and Selling a Second-Hand Car

If you don’t have the money to buy a new car in Portugal,  you have the “second hand” “de segunda mão/usado” option.  Just like in the US, prices will vary depending on the vehicle.  We have notice that certain cars hold their value (Mercedes, BMW, Fiat, etc) while other like Japanese, Korean and American cars drop in value greatly.  Buying a second-hand car is more expensive on the equity side, there is a tax reason behind it.   In Portugal, second-hand cars depreciate slower than higher priced vehicles.   This means that at the end of the year, your tax bill will not have the benefit of the higher depreciation rate.   This is a Portugal thing. You can get a better deal in UK or France…but we are talking Portugal here.

How to Register a Car in Portugal

The steps to register your newly purchased vehicle in Portugal are:

1. Find the car
2. Get offer accepted
3. Go to IRN
4. Provide proof of residence in Portugal either by showing a residence card, a property title deeds or a rental contract good for more than 1-year
5. Proof of vehicle roadworthiness (the IPO test certificate) provided by the seller
6. The vehicle registration papers provided by the seller
7. Proof of up-to-date payments of vehicle tax (Imposto Municipal de Veículos) provided by the seller
8. A registration fee

When dealing with the  Insitituto dos Registos e do Notariado or IRN (Institute of Registration and Notaries) be prepared to wait.  We went to our local one in Avenida Novas.    It was about a 70-minute wait.   They do not speak English, so bring a Portuguese to English translator.  We speak enough Portuguese, but it was a bit daunting dealing with them.  It wasn’t as bad as the DMV back in the states, but very similar.

If you need help with the process go to your local Loja do Cidadão (Citizens Shops).  They are advocates for locals and usually have people who speak English.  They can guide you both with documents and maybe even help you find a fixer.   Here is a list of Lojas do Cidadão throughout Portugal.

• Vehicle registration forms and information may be downloaded from the Registo de Veículos section of the IRN website (in Portuguese)
• Registration may be completed online (in English and Portuguese)

***Note: Check here to find a local IRN office

Shopping for a Vehicle in Portugal

Here is a list of the popular places locals and foreigners go to buy a car in Portugal.   I am not vouching for any, but these are the ones we have visited in our search.

When dealing with local sites or classificados (classifieds) be sure to have the car inspected by a mechanic.  They do a 5-point inspection on the vehicle and will tell you if it’s a good buy.  If the seller won’t let you do an inspection, then move on to the next.  It means they are hiding an accident or worst a technical problem.

What to Expect When I Transfer Ownership of a Used Car

The seller will have to register the change of ownership on the Transferência dePropriedade or Contrato Verbal de Compra e Venda (Transfer property or verbal contract) form.  They will get the form from the IRN and it will give the vehicle’s history and state you as the new owner.  You will have to sign the document and then within 60-days the deal (monies and vehicle) must happen.   All issues or disagreements must be made in writing and noted on the form within 15-days of change of ownership of the car.

***Note: Get the form for registration of change of ownership (Requerimento de Registo Automóvel )

Buying a Second-hand Car Checklist

At the point of sale the seller should provide the following:

• The transfer of ownership Form 2 for completion and signing
• The vehicle’s registration papers:
  This will either be a DUA All-In-One Vehicle Document (Documento Único Automóvel) also called license plate certificate (Certificado de Matrícula) or two documents:
  • vehicle registration document (Título de Registo de Propriedade)
  • log book (Livrete)
• Proof of roadworthiness: a valid IPO (Inspecção Periódica Obrigatória) test certificate
• Green Technical Inspection card/certificate (Calendário das Inspecções Técnicas de Veículo, also called: Carta Inspecção Técnica Periódica) which details the vehicle’s inspection history and when the next inspection is due
• Owner’s Municipal Vehicle Tax Contribution (Imposto Municipal de Veiculo) documents or card as proof of paid-up vehicle tax

Note: The DUA document of more recently registered vehicles incorporates the information previously kept in three separate documents.

The Wrap up

Buying a car in Portugal is similar to buying a car in the States.   You still have to either deal with a dealership if you want new, an individual if you want a deal and the government for the legalese of getting the vehicle in your name.   The rental is a bit different here than in the United States in that you pretty much rent it and they cover everything except gas.

No matter which level you chose make sure to do your research, check the vehicle (even new ones) and go through the legal legwork.  It’s not hard, so go get your Fast and Furious on son.