Cruising Through Bureaucracy: A Step-by-Step Guide to Buying a Car in Portugal

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Last updated on June 24, 2024 | Est. Reading Time: 9 minutes

Moving to Portugal is an exciting adventure, but it often comes with a crucial decision: whether to buy a car. While Portugal boasts charming cities with decent public transportation, having your own set of wheels can open up a world of possibilities. 

This comprehensive guide will walk you through everything you need to know about buying a car in Portugal, from assessing your needs to navigating the purchase process.

Do You Really Need a Car in Portugal?

It’s a question many expats grapple with, especially those coming from car-centric countries like the US. The truth is, while it’s possible to live car-free in Portugal, particularly in major cities like Lisbon and Porto, owning a car can significantly enhance your quality of life. 

Here’s why:

  • Limited Public Transport: Outside of urban centres, public transportation can be infrequent and limited in reach. Rural areas and smaller towns often have sparse bus services, making daily errands challenging without a car.
  • Access to Amenities: Portugal’s beautiful beaches, hidden natural wonders, and out-of-town shopping centres are often best reached by car. Want to explore that secluded cove or stock up at a larger supermarket? A car makes these trips effortless.
  • Exploring the Country: Portugal is a country of diverse landscapes and charming towns. With a car, you can embark on impromptu road trips, discover off-the-beaten-path locations, and truly immerse yourself in the Portuguese way of life.
  • Time and Convenience: While public transport can be reliable in cities, having a car saves time and offers flexibility, especially for families or those living in suburban areas.

The Cost Factor: Why Many Newcomers Hesitate

It’s no secret that cars in Portugal are more expensive compared to countries like the US or UK, and even many other European countries. This price difference often gives newcomers pause. 

Here’s what you need to know:

  • Higher Purchase Prices: Due to taxes and import costs, both new and used cars tend to be pricier in Portugal.
  • Fuel Costs: Gasoline and diesel prices are higher than in many other countries, particularly compared to the US – and even compared to neighbouring Spain. 
  • Maintenance and Insurance: These costs can also be significant, especially for newer or luxury vehicles.
  • Age and Mileage: You’ll likely end up with an older model or one with higher mileage for the same budget you’d have in your home country. Unfortunately, it’s just a fact of living in Portugal. 

Despite these factors, many expats find that the convenience and freedom a car provides outweigh the costs, especially when factoring in the ability to explore Portugal’s diverse regions.

Who Can Buy a Car in Portugal?

Buying a car in Portugal is relatively straightforward, but there are some requirements you’ll need to meet. Here’s what you need to know:

Requirements for Purchasing a Car:

  1. Proof of Portuguese Residence: This could be your residence permit or evidence that you own or rent a home in Portugal. This requirement ensures that the car will be registered to a valid Portuguese address.
  2. Valid Identification: A passport is the most commonly accepted form of ID for foreigners.
  3. NIF (Número de Identificação Fiscal): This is your Portuguese tax identification number. It’s essential for most financial transactions in Portugal, including buying a car.
  4. Bank Account Details: Unless you’re paying the full amount in cash (which is uncommon for larger purchases), you’ll need a Portuguese bank account. This is used for setting up payments or financing if necessary.

Driving Requirements:

  • Age: You must be at least 18 years old to drive in Portugal.
  • Valid Driving License: You need a valid driving license recognized in Portugal. EU licenses are accepted. Non-EU residents can use their home country license for up to 185 days, after which they need to exchange it for a Portuguese one.

New vs. Used Cars in Portugal

When it comes to buying a car in Portugal, you’ll face the classic dilemma: new or used?

Generally, it comes down to cost. New is obviously better, whether that’s in terms of fuel economy or hidden problems. But unless your budget stretches to a new car, you will need to opt for second-hand instead.

Buying a New Car in Portugal

When purchasing a new car in Portugal, dealerships are the main place to buy. These official outlets offer several advantages:

  1. Widespread Availability: Dealerships are located across Portugal, making it easy to find one near you.
  2. Support: They provide higher levels of support both during the sale and after-purchase.
  3. Registration Assistance: Dealerships handle the car registration process for you, simplifying the bureaucratic aspects.
  4. Maintenance Networks: Many have connections with garages, which can be helpful if you encounter issues with your vehicle.

Finding Dealerships:

Buying a Second-Hand Car in Portugal

Opting for a used car (de segunda mão/usado) can be cost-effective. As with most other countries, you can either buy a second-hand car from a dealership or from an individual.

Both options have their pros and cons. The main pro for buying from an individual is cost (it’s typically cheaper and there’s more room to negotiate) but the lack of warranty could be a major con, particularly if you’re new in Portugal. In contrast, most dealerships provide one-year warranties on used vehicles. They will also handle the paperwork of registering your car.

Finding Used Cars

The main place to find used cars, whether from a dealership or individual, is StandVirtual along with OLX and Facebook Marketplace. However, there are several other options too.

Popular Websites

It’s also not unusual to see adverts for cars on the noticeboards in supermarkets or for the seller to tape their phone number to the car window.

Car Registration and Other Paperwork in Portugal

Registering your car is a crucial step in car ownership in Portugal. Here’s a comprehensive guide to help you navigate the process:

Registration Requirement: All cars in Portugal must be registered with the IMT (Instituto da Mobilidade e dos Transportes). This applies to new, used, and imported vehicles. Failing to register can result in your car being seized by authorities.

Registration Timeframe: You have 60 days from the date of purchase to register your vehicle.

Who Handles Registration

  • If buying from a dealership, they typically handle the registration process.
  • For private purchases or imports, you’ll need to manage the registration yourself.

Where to Register: Registration is done through the Institute of Registries and Notaries (Instituto dos Registos e do Notariado – IRN). You have several options:

  1. Online registration
  2. In-person at an IRN vehicle registry office
  3. At a citizen’s shop (Lojas do Cidadão)

Required Documentation

When registering, you’ll need to provide:

  1. Your ID or passport
  2. Your NIF (tax identification number)
  3. Proof of Portuguese residence (e.g., residence permit or proof of address)
  4. Completed and signed registration form (Requerimento de Registo Automóvel)
    • For used vehicles, this includes transfer of registration to the new owner
  5. EU certificate of conformity (or equivalent safety certificate for non-EU vehicles)
  6. IPO vehicle inspection certificate (for cars over four years old)
    • A list of registered inspection centers is available on the government website

Registration Certificate

After completing the registration and paying the fee, you’ll receive your Documento Unico Automóvel (DUA).

This document:

  • Is valid until you sell the car or choose to deregister it
  • Should be kept in your car at all times, along with your car insurance certificate

License Plates

Unlike some European countries, you don’t need to change license plates if you move to another part of Portugal.

Vehicle Inspections or IPO

  • Required for cars over four years old
  • Frequency depends on the car’s age:
    • 4-7 years old: Every two years
    • Over 7 years old: Annually

Additional Information:

  • More details on vehicle registration can be found on the Portuguese government’s website.
  • If you’re importing a car, additional steps and documentation may be required.

Tips for a Smooth Registration Process:

  1. Start early: Don’t wait until the last minute of the 60-day window.
  2. Double-check all documents: Ensure everything is complete and accurate.
  3. Keep copies: Make copies of all documents for your records.
  4. Be prepared for fees: Registration involves costs, so be ready to pay.
  5. Consider professional help: If you’re not confident navigating the process, especially for imported vehicles, consider hiring a service to assist you.

Remember, driving an unregistered vehicle in Portugal is illegal and can result in hefty fines or vehicle seizure. Always ensure your registration is up to date and carry the necessary documents in your car at all times.

Car Costs in Portugal: A Comprehensive Breakdown

When budgeting for car ownership in Portugal, it’s crucial to consider various costs beyond the initial purchase price. Here’s a detailed breakdown of the expenses you can expect:

  1. Registration Fee:
    • Approximately €55-65
    • Save about 15% by registering online
  2. Taxes: a) One-off Vehicle Tax (Imposto Sobre Veículos – ISV):
    • Paid when buying a new car or importing a vehicle to Portugal. Based on vehicle type and CO2 emissions

    b) Annual Circulation Tax (Imposto Único de Circulação – IUC):

    • Renews license plates and allows driving on Portuguese roads. Also based on vehicle type and CO2 emissions

    You can estimate these costs using the Portuguese government’s online simulator.

  3. Car Insurance:
    • Mandatory minimum: Third-party insurance
    • Cost range: €150-600 annually
    • Factors affecting cost: Car value, insurance type, driver’s risk profile
  4. Maintenance:
    • IPO (Inspeção Periódica Obrigatória) inspection: Around €30
    • Frequency:
      • First inspection at 4 years old
      • Every 2 years for vehicles 4-8 years old
      • Annually for vehicles over 8 years old
  5. Fuel Costs (as of the last update):
    • Petrol: €1.71 per liter
    • Diesel: €1.55 per liter Note: Prices can fluctuate based on market conditions
  6. Toll Roads:
    • Costs can reach up to €25 on some roads
    • Pre-paid subscriptions available (e.g., Via Verde) starting at just over €5 per year
  7. Additional Costs to Consider:
    • Regular maintenance (oil changes, tire rotations, etc.)
    • Parking fees
    • Automobile club memberships

Tips for Managing Car Costs in Portugal:

  1. Choose a fuel-efficient vehicle to reduce both ISV and fuel costs.
  2. Consider electric or hybrid vehicles, which may qualify for tax incentives.
  3. Shop around for insurance quotes to find the best rates.
  4. Perform regular maintenance to avoid costly repairs.
  5. Use toll road subscriptions if you frequently travel on highways.
  6. Consider carpooling or using public transport when possible to reduce overall costs.

Remember, while car ownership in Portugal can be expensive, it often provides a level of freedom and convenience that many find worthwhile, especially in areas with limited public transportation. Carefully consider your needs and budget when deciding on car ownership and the type of vehicle that’s right for you.