Blanca Valbuena

How to purchase a car in Portugal

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

ProCons
    • You own the car Long-term
  • erm commitment unless you sell
  • It’s your car
  • You can design your car
  • You get equity when reselling it
  • Can be cheaper in long run
  • Initial deposit
  • Taxes on depreciation
  • You’re responsible for maintenance and insurance

Leasing a Car

ProsCons
  • Cheaper then buying
  • Get a nicer car
  • You can design your car
  • You can buy car after lease for less then market rates
  • Tax benefits for businesses
  • Maitenance is sometimes included in the price
  • Long or short term commitments
  • Not your car
  • If you damage it you may have to pay
  • You do not get equity for the vechicle
  • That “first scratch” is going to drive you nuts

Renting a Car

ProsCons
  • Zero maintenance
  • Zero Insurance (sometimes)
  • New car
  • Cheapest of the monthly options
  • Not your car
  • If you damage it you may have to pay
  • You do not get equity for the vehicle

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:

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.

***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.

New CarsUsed CarsRental/Leasing Cars
  • Mercedes
  • Fiat
  • Seat
  • BMW
  • Toyota
  • Smart
  • Peugeot
  • Renault
  • Smart
  • BMW

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.

12 thoughts on “How to Buy a Car in Portugal”

  1. Hi,

    Very useful info but I wasn’t exactly clear at what stage money changes hands in the second hand car buying process?

    Thanks

    Derek

  2. Great article thanks. Please do advise on the exchange of money and also the insurance bit, as I assume you can’t get insured until you drive a car but if you need insurance to drive how do you drive it after buying it?

  3. Do I need to convert my driving license 1st? Or I can use and IDP (International Driving Permit) to buy the car and also the insurance?

  4. Hi!

    I would start by changing my driver’s license. I had to go 3 times to the IMTT to get it done and there is a small window between the time you get your first residency card before you are no longer allowed to exchange your foreign license for a Portuguese license. I hear the Portuguese driving license test is brutal, so I advise everyone to get this done asap.

    Blanca

  5. Hello.
    Was just thinking, why dont people go over to spain/france/Germany and buy a car there as they are a lot cheaper and drive it back to Portugal? Is there some sort of import tax or costs involved in it that make it not viable at all? Or are the Portuguese people just too lazy?

  6. Hi Rysiu,

    So…there are taxes and they are pretty high. Cars are cheaper in other countries, but eventually, you will need to register your car. It is at this point that you get hit by taxes.

    For example, EU nationals must register their car if they are the holder of the registration certificate, the owner of the vehicle, or a user of a vehicle you do not own. As an EU national moving to Portugal, you can use your vehicle here while it is still registered in your previous home country, BUT you have 20 working days to register your car in Portugal, following the car import into Portugal. This can be done at any customs office by showing the Vehicle Tax (Imposto Sobre Veículos – ISV) and by submitting the vehicle customs declaration (DAV) through the Portal das Finanças.

    If you register a foreign car in Portugal, you will need to pay both registration taxes (Imposto Sobre Veículos – ISV tax) and the road tax: (Imposto Único de Circulação – IUC). The direct sources are on those two links.

    The one thing I would recommend to save some money if purchasing a car in Portugal is to buy used. The first person to purchase the car has to pay a tax (I don’t remember the name on this), but when you buy used since that tax has already been paid, the second person to purchase will not have to.

    There are also services where you can “rent ” a car long term in Portugal. In those cases, the lease includes your insurance, some repairs, etc.

    Happy car shopping,
    Blanca

  7. dear friend..i m american and croatian..can i buy old car in portugal and drive to croatia with american drivers licence ..or passport ..i got croatian id and pasport but no drivers licence..i can find this info

    thank you and god bless you

    malden

  8. Croatia is part of the EU, but not part of Schengen, so it should not be an issue driving a car purchased in another EU country, but I do not have a certain answer for you. It probably depends on how long you plan to drive with your US license. Why don’t you call the Croatian embassy and their driving authority to get a more accurate answer than mine – I’m just guessing? You will probably also want to consider that it is less expensive to buy a car in another EU country. Portugal has so many taxes on cars, that I would not recommend purchasing here.

  9. Hi there!
    Cool article and very useful.

    I have a question: does anywhere in the paperwork on the buyer’s side (second hand car) do we need to indicate if we have a Driver’s License?

    Here is the reason: Person A owns a home in PT, but no driver license. Person B does not have a home (just visiting), but has an EU driver licence. Can Person A buy the car (without driver license), in order for Person B to drive it? (in terms of insurance, it is all good btw).

    Thanks in advance 🙂

  10. Blanca Valbuena

    Hi Matt,

    Glad you liked it. From what I read, as a foreigner, you can buy a car in Portugal, but you must have a few things including proof of Portuguese residence (a rental contract, proof of purchase of real estate or a resident’s card/visa), your NIF, and ID like your passport or driving license. So I think you should be able to.

    Where things may get complicated is insurance. I’ll ask around and see what I can find out.

    Blanca

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