Buying a new car in Luxembourg: tips to know

What steps do you need to take to buy a car in Luxembourg?

Registration and payment of the road vehicle tax are the preconditions for putting your new vehicle on the road.

However, nothing could be easier, even for newcomers. Most of the time, these steps are taken by the dealer making the sale.

However, in Luxembourg, it is necessary to have car insurance coverage in order to be able to register your vehicle.

Here are the essential steps to follow:

1. Purchase auto insurance

Before registering your vehicle, you must have it insured. The insurer will issue you a certificate required for the next steps.

2. Register the vehicle with the SNCA

The Société Nationale de Circulation Automobile (SNCA) is the agency responsible for vehicle registration in Luxembourg. It is the SNCA that authorizes the vehicle to be put into service.

3. Obtain the license plates

Once the number has been assigned, you can have your license plates made by an authorized supplier.

4. Pay the road tax

This tax depends, in particular, on the vehicle’s CO₂ emissions. It is mandatory in order to drive legally.

What are the tax benefits of buying a new car?

A 17% VAT rate: a competitive advantage
Luxembourg has a VAT rate of 17%, which is lower than in several neighboring countries:

• France: 20%
• Belgium: 21%
• Germany: 19%

As a result, the final price of a new vehicle can be more attractive in Luxembourg.

What is a new vehicle? 

According to the tax definition, it is a vehicle that is less than 6 months old or has travelled less than 6,000 km.

To insure a new vehicle, it is better to play it safe. In the event of an accident, if your new car is beyond repair, AXA’s Auto Privilege package allows you to buy the same car at its current price for 3 years.

AXA considers a vehicle as new until it is 12 months old. It can thus benefit from the 3-year coverage, even if it is no longer considered new for tax purposes.

You can also choose to buy your new vehicle abroad; the 17% VAT rate remains applicable, since it is linked to the country of registration.

But be aware that in this case, it is likely that your dealer will not know what steps to take to register your vehicle. No problem: your car insurer can assist you, by offering registration services. Once your vehicle is imported into Luxembourg, AXA’s Registration Service allows you to have your vehicle delivered directly to your home with its new number plates fitted, without having to worry about it.

How does VAT work when purchasing abroad?

The procedure depends on where the purchase is made:

Intra-EU purchase: You pay VAT in the country of registration (Luxembourg)

The vehicle is considered new if it is less than 6 months old or has less than 6,000 km

Non-EU purchase: Luxembourg VAT + import duties

Sustainable Mobility: What Incentives Are Available for Eco-Friendly Vehicles?

Luxembourg encourages the purchase of more environmentally friendly vehicles through various incentives.

Overview of Available Incentives

Vehicle Type Potential Incentive*

• 100% Electric Up to several thousand euros
• Plug-in hybrid Variable incentive depending on range

• Low-emission vehicles Specific conditions

  *Amounts and conditions change regularly (CO₂ emissions, electric range, purchase date, etc.).

Note: The most polluting vehicles are subject to higher road tax.

Also on the insurance side, green mobility allows you to benefit from discounts on your insurance premium.

What documents are required to register a vehicle?

To register a vehicle in Luxembourg, you must submit a complete application to the SNCA. The following documents are required:

• Purchase invoice
• Certificate of Conformity (COC)
• Proof of identity
• Proof of insurance
• Completed registration application

All documents must be submitted in their original form.

In the case of an import (vehicle purchased abroad), additional documents may be required, such as a customs clearance certificate or a technical inspection report.

Key Takeaways

Buying a new car in Luxembourg is relatively simple, provided you follow the steps carefully:

• Arrange car insurance in advance
• Gather the necessary documents
• Understand the VAT rules (especially when purchasing abroad)
• Take advantage of incentives for eco-friendly vehicles

By being well-prepared, you can not only save time but also realize significant savings.