Thinking of buying a car in Andorra? Whether you’re relocating or investing, the Principality offers tax benefits and streamlined procedures for vehicle purchases.

Cars are often cheaper than in neighboring countries, thanks to the low 4.5% IGI and absence of regional taxes. In this article, we guide you through the key requirements, costs, tax implications and professional advice available to make your decision easier.

Regulations to buy a car in Andorra

If you already live in Andorra, the process of buying a car is fairly straightforward. You can purchase new or used vehicles directly from local dealerships or private sellers. You can also buy a vehicle in another country, such as Germany, and only pay VAT.

Required documents include:

Valid residency card
Proof of registration in your parish (Comú)
ITV certificate (technical inspection)
Purchase contract
Car insurance policy, valid in Andorra

Once these are ready, you will have to follow the next steps:

1) Contact freight forwarders a few days in advance so that they can prepare the customs file, sending the invoice, the original registration certificate, and the COC (certificate of conformity).

2) Go to customs with the documentation; for exports from the EU, you will also be asked for Andorran insurance, the COC, and an appointment at the ITV.

3) Have the MOT inspection carried out in Aixovall (Andorra).

4) Complete the paperwork at the Government offices, where you will obtain the “Carta Groga” (equivalent to the registration card) and collect the license plates.

For non-residents

Non-residents cannot register a car in their name. However, you have options:

Register the vehicle under a company name
Wait until residency is approved

Costs associated with car purchase

One of the biggest advantages of buying a car in Andorra is the lower cost. Reasons include:

4.5% indirect tax (IGI), compared to 20-21% VAT elsewhere
No internal customs duties
Lower dealership operating costs

This can lead to savings of several thousand euros, especially on premium or luxury models.

Additional costs

Even with tax savings, certain expenses apply:

Registration fee (€200–€300)
Annual road tax (€80–€200)
Insurance (€400–€1200/year)
Technical inspection (after 4 years): €30–€50

Tax benefits when buying goods in Andorra

Minimal tax burden

One reason expats choose Andorra is the favorable tax framework. When buying goods in Andorra, the savings are evident:

IGI at only 4.5%
No regional or municipal levies
Straightforward fiscal treatment for imported or company-owned assets

Business vehicle advantages

Entrepreneurs in Andorra can register company cars, deducting the related expenses such as insurance, maintenance, and fuel—provided the use is business-related and properly documented.

Importing a car when relocating

You may bring your current car into Andorra if you’re moving to the country.

Key requirements

Official residency status
Car registered in your name for over 6 months
Proof of purchase or market value
Compliance with Andorran emissions rules

Exemptions on relocation

New residents can import their car tax-free if done within 12 months of obtaining residency. This benefit is frequently used by individuals relocating permanently.

Paperwork and steps

Confirm your residency
Purchase or import the vehicle
Secure valid insurance
Pay required taxes and fees
Register the car with the traffic department
Schedule technical inspection if needed

Why work with a professional advisor

Working with a specialist like MCA Assessors ensures a smooth, compliant experience. We assist with:

Regulatory reviews
Tax strategy and deductions
Import documentation
Choosing reliable local dealerships

Our bilingual team provides tailored guidance for international clients who value efficiency and compliance.

Buying a car in Andorra is a smart move for residents and entrepreneurs looking to save money and enjoy legal simplicity. Whether you’re relocating or investing in assets, understanding the rules is key. Let our experts support your journey.

Get in touch with MCA Assessors for expert support designed around your needs.