Buying a car from the European Union

1. Buying a new car

A new car requires a higher cost, but gives a higher guarantee. If you opt for a used car, the price will be lower, but the devaluation, in time, is slower than if you buy a new car. It is important to choose the car that best fits your needs and budget.

When you’ve decided, you have to make a research about the type of car you want, the car’s options, the price of the car and its additional options, as well as the facilities, financing options and the warranty the manufacturer provides.
When you compare the prices in different countries for a particular model, you must ensure that the car has the same options and technical features (ex.: air conditioning). They may vary from country to country.

Testing the car is very important as it can help you know more information about it: interior comfort, design, the dashboard complexity, its behavior on the road, anti-lock brakes, etc. So do not hesitate to make an appointment to “test drive” to convince yourself that the car chosen is the one that suits your needs.

“Test driving” the car is not binding you in any way to the seller.

According to the common system principles of value-added tax (VAT), the bill of sale of a new car is charged once with VAT in the European Union and always in the Member State of destination. So, if you intend to buy a new car from a dealer in an EU country and register it in your residence country, you have the obligation to pay VAT only in your country of residence.

It is not out of the question to be obliged to pay VAT twice, once in the EU member state where you bought the car, if the seller is a legal entity registered for VAT and applies VAT on the sales invoice, and once again in your state of residence where you register the car. But, if you prove that the car will be registered in your country then, the seller should not apply VAT on the invoice. However, if this happens, you need to proceed in recovering the VAT tax you paid to the seller after you register the car.

You can recover some of the VAT paid on your new car purchase if you sell it before the passing of a 6 month period after being in circulation.

A car sold in the EU is considered new if it is sold within 6 months after it was put into circulation or has less than 6000 km aboard.

Once taken the decision to buy the car, the seller must hand over to you the following documents:

  • the bill of sale ( contract of sale ) – which should include the name and the address of the seller and your own address, the price with / without VAT, the characteristics of the car – brand, type, year of release, mileage – date of purchase, payment methods, date of delivery, special conditions, if any;
  • purchase invoice mentioning at least the price without VAT, the car’s chassis number and the VAT number of auto dealer; This document must clearly indicate that it is a new car;
  • car’s ID card;
  • Certificate of Conformity – valid for all EU Member States.

2. Buying an used car (second-hand)

A car is considered used if it is sold by more than six months from the date of first registration and has more than 6000 Km.

If the car will be purchased from a car dealer, you will pay VAT only on the profit the dealer made from selling the car. The VAT will not appear on the invoice, and the car will not be subject to VAT regime in your country of destination.

If the car will be purchased from an individual, the price paid will be without VAT.

When you buy a used car you have to be cautious because vendors tend to give their cars an attractive look. Therefore, in order to be sure you will not be disappointed by your choice, you should thoroughly control and test drive before buying.

Some car markets offer buyers, upon request and for a fee, computerized evaluation services that test the technical condition of used cars offered for sale. Hereby, an evaluation list is being drawn up that shows the percentage of wear for each sub-assembly; the elements of the bodywork, emission, transmission, engine, or the brakes, instrument cluster, suspensions, chassis.

If you fail to identify a place that offers such evaluations, you should call an authorized service or a manufacturer service as this the only method which can be trusted in giving a just diagnosis for your car.

EU legislation requires that all cars should be checked periodically to ensure that they are in good working condition and meet the same safety standards from time of registration.

Demand the seller to provide documentation proving regular technical inspection, validity and periodical inspection certificate.

The periodical inspection certificate has following characteristics:

  • is complementary to the annex of the car’s registration certificate and so it doesn’t replace the Annex that proves the TPI and validity;
  • it is written in the language of the country where the car is registered, but also in English; is available along with the car’s registration certificate Annex;
  • it allows the verification of the validity of the periodic technical inspection by the control authorities in EU countries.

Technical inspection carried out in Romania has to take place every two years and is only valid in Romania, even for a car registered in another EU Member State.

To be able to travel by car within the EU, you must purchase a Green Card auto liability insurance; this insurance is valid for all EU Member States.

However, auto liability insurance (RCA), which is valid in Romania is valid in an EU member if:

  • the insurer has a principal or secondary establishment in another Member State;
  • the insurer is authorized to provide services in that Member State, even if it has no registered on its territory.

So, it is advisable to check with the insurer whether liability insurance (RCA) is valid for travel in your destination country.

In order to be sure that the car bought in Romania has not undergone tampering, you should demand the certificate of authenticity, which involves keeping the main elements of identification and structural characteristics of the car in the same configuration as when it was approved. In other words, a comparison is made between the chassis and engine serial numbers and the serial numbers printed on the car’s identity card.

In Romania, the certificate of authenticity is issued by the Romanian Car Register (RAR) and is valid for one registration, but no more than 60 days from the date of issue.

The seller must hand over to you the following documents:

  • itemized bill containing a full description of the car and price, if you buy the car from a professional. If you buy the car from an individual, the sale must be confirmed in writing;
  • original certificate of registration / ID card;
  • in case of a previous registration, the confirmation that the car was expunged (this statement is presented as a separate document or a stamp on the registration certificate / ID);
  • European Certificate of Conformity;
  • any other document certifying the accuracy of the information on the invoice (purchase order, contract, shipping documents or transport, proof of payment, coupon, certificate of authenticity, etc.)

3. Steps leading to car transport in the country of residence

The European Certificate of Conformity, whether we speak of a new car or a used one, is the document required for registration in the country of residence. The certificate is proof that the car meets the technical requirements established by law.

If the seller is unable to deliver you this document, you can address directly to the car manufacturer. It will be able to submit, for a fee, a certificate of compliance within a reasonable time. If your supplier cannot provide a certificate of compliance, identification must be made at the time of the technical inspection.

Older used cars which have no European Certificate of Conformity are subject to special procedures at the technical inspection.

Transport can be carried out by a specialized company or you personally. For this you must obtain an export authorization. Also, after buying the car, you must sign a temporary vehicle liability insurance for the return journey to the country of residence where the car is to be registered.

In Romania there are a number of companies that deal with singing liability insurance policies, as well as authorizations of circulation for export. Auto liability insurance outside Romania (Green Card) covers damages to third parties in other states.

To avoid potential problems that may arise, get informed on the conditions you must fulfill in order to transit other EU member states.

In Romania, the authorization is valid for 30 days. This is obtained from the Public Community Service for Driving License and Vehicle Registration at the Bucharest Prefecture.

The documents required for registration of a car in Romania are:

  • registration demand;
  • car registration papers;
  • car identity card, original and copy;
  • document proving ownership of the car, original and copy;
  • proof of periodic technical inspection within the validity period;
  • Green Card international insurance, original and copy;
  • the registration documents issued by foreign authorities, in original, and foreign registration number plates;
  • certificate of authenticity of the vehicle, except for new vehicles;
  • form “Certificate attesting the payment of value added tax”, in case of intra-Community acquisitions of new means of transport;
  • form “Certificate” if the car is not new;
  • proof of payment of registration fee;
  • proof of payment of the environment stamp, if the car has not been registered in Romania;
  • proof of payment of the registration certificate;
  • proof of payment of the registration number plates;
  • mandate, if applicable.

The original documents shall be returned immediately after the verifying is complete along with their copies. The ID card is returned at the delivery of the car’s registration certificate and registration number plates.

If the car was bought from another EU country than Romania and you do not have original registration documents issued by foreign authorities, the registration may be done only with the confirmation from the Member State in which you bought the car that the car can be re-enrolled in Romania. Until the situation is clarified, the car can be driven under a provisional circulation authorization.