Guide to car insurance and other costs of owning a car in Spain

Owning a car in Spain is a practical choice for navigating the country’s picturesque landscapes, managing daily commutes, or travelling long distances. However, it comes with financial responsibilities, including insurance, taxes, and maintenance. This guide is designed for residents, expats, and frequent visitors considering car ownership or alternatives, helping you make informed decisions.

Types of car insurance in Spain

If you own a vehicle in Spain, a car insurance is mandatory. Drivers must carry at least third-party liability insurance to legally operate a vehicle. Here’s an in-depth look at the most important things you need to consider about car insurance:

1. Third-party liability insurance (Seguro a terceros)

• Covers damage or injury caused to other people, vehicles, or property.
• It does not cover your own vehicle’s damage.
• This is the minimum legal requirement for car insurance in Spain.

2. Third-party, fire, and theft insurance (Seguro a terceros ampliado)

• Includes third-party liability coverage along with protection against theft or fire damage to your vehicle.

3. Comprehensive insurance (Seguro a todo riesgo)

• Offers the most extensive coverage, including protection for damages to your vehicle (regardless of fault).
• This option is ideal for new or expensive cars.

4. Insurance with excess (seguro con franquicia)

• This is a cost-effective variation of comprehensive insurance. You agree to pay a predetermined amount (the "excess") towards repairs or damages.
• Insurers cover the remaining costs, making this suitable for careful drivers looking to reduce premiums.

5. Pay-as-you-drive insurance

• Usage-based insurance suitable for drivers who use their car infrequently.
• Premiums are calculated based on kilometres driven.

Can you use foreign car insurance in Spain?

Temporary visitors may use insurance from their home country, provided it meets Spain’s third-party liability requirements. Residents, however, must register their vehicles with Spanish plates and switch to a local insurance policy.

Car insurance costs

The cost of car insurance in Spain varies based on factors such as:

• Driver profile: Young or inexperienced drivers face higher rates.
• Vehicle type: Luxury or new cars cost more to insure.
• Location: Urban areas with high traffic tend to increase premiums.
• Claims history: A clean driving record can reduce costs through no-claims discounts.

For third-party liability insurance, premiums typically range from €150 to €300 per year. In the case of comprehensive insurance policies are generally priced at least at €400 or more annually.

These costs depend on the insurer, vehicle model, age of the car and driver profile. Always compare quotes for the best rates.

Required documentation for car insurance in Spain

Obtaining car insurance in Spain involves providing specific documents to verify your identity, vehicle ownership, and compliance with local regulations. These documents ensure the insurer has all the necessary details to calculate your premium accurately and issue a valid policy. The requirements may vary slightly between insurers, but generally, you will need the following:

• Identification (e.g., NIE/TIE for foreigners): Your national identification number or foreigner's identity card confirms your legal status and residency in Spain.
• Vehicle registration certificate (permiso de circulación): This document proves that your vehicle is legally registered in Spain.
• ITV (vehicle inspection) certificate, if applicable: For cars over four years old, a valid ITV certificate demonstrates that your vehicle meets safety and emissions standards.
• Proof of previous insurance (if transferring insurers): This helps insurers assess your claims history and may qualify you for no-claims discounts or other benefits.

Filing a claim with a Spanish car insurer

If you’re involved in an accident or your vehicle suffers damage, knowing how to file an insurance claim in Spain is essential. A clear understanding of the process can save you time, reduce stress, and ensure a smooth resolution. Spanish insurers generally have well-defined protocols to handle claims efficiently, whether the incident involves third parties or only your own vehicle.

Follow these steps to file a claim:

1. Report the incident to your insurer within 7 days.
2. Complete the accident report form (declaración amistosa de accidente): Provide details like the date, time, and description of the incident, and ensure all parties sign the form.
3. Submit documentation: Include photos, a police report (if applicable), and your insurance details.
4. Assessment and repairs: Your insurer will guide you to an authorised repair shop.

For a smooth claim process, consider the following tips:

• Keep copies of all documents.
• Be transparent and accurate when reporting the incident.
• Familiarise yourself with your policy to avoid surprises about coverage.

Additional costs of owning a car in Spain

Owning a car in Spain involves several costs beyond insurance, including taxes, fuel, maintenance, tolls, and parking fees. While the overall expenses depend on your vehicle type, usage, and location, this section breaks down the major costs to help you plan accordingly.

Upfront costs

Whether buying new or used, the initial cost of purchasing a car in Spain can be significant.

• New cars: Prices range from €10,000 for small models to over €50,000 for luxury cars, with VAT (IVA) at 21%.
• Used cars: More affordable but subject to a transfer tax of 4–8% of the car’s value.
• Registration tax: Based on CO2 emissions, ranging from 0% to 14.75% of the car’s market value.

Recurring expenses

Car ownership comes with recurring taxes and mandatory inspections:

• Road tax (Impuesto sobre Vehículos de Tracción Mecánica - IVTM): It is paid annually to your local council (Ayuntamiento) and costs vary by location and engine size, typically €20–€200 per year.
• Emission-based taxes: Some regions, such as Madrid or Barcelona, impose additional charges for higher-emission vehicles.
• ITV (Technical Inspection of Vehicles): It is mandatory for cars over four years old to ensure safety and emissions compliance. Inspection costs range from €30 to €50.
• Fuel costs: Petrol and diesel prices typically range between €1.50 and €2.00 per litre. Hybrid and electric vehicles can significantly reduce fuel costs, though access to charging stations varies by region.
• Maintenance and repairs: Keeping your car in good condition is essential. Routine servicing can range from €100–€300 annually. Prices of repairs depend on the damage and type of vehicle but can range widely. Always ask for an estimate in advance to avoid surprises.
• Tolls on highways: Spain’s highway network includes toll roads (autopistas) in certain regions, such as Catalonia and the Basque Country. Toll costs typically range from €0.10 to €0.20 per kilometre.
• Parking costs: Parking can be a considerable expense, particularly in urban areas:
  • Urban parking:
    • Blue zones (zona azul): €1–€2 per hour.
    • Green zones (zona verde): Intended for residents of the area. In cities such as Madrid, it costs just under €30 per year to have a parking permit for a green zone. For non-residents, they are more expensive than blue zones.
  • Private parking:
    • Monthly rates range from €50 to €150, depending on the city.
    • The price of private parking by the hour varies greatly from city to city, with costs ranging up to €24 per day.
  • Fines for parking violations:
    • Penalties typically range between €60 and €200.
• Additional costs for expats: Expats bringing their vehicles to Spain must re-register them with Spanish plates, and face associated costs, such as, import duties, registration fees and modifications to meet Spanish vehicle standards.

Reducing the costs of car ownership in Spain

Owning a car in Spain doesn’t have to be prohibitively expensive. By adopting these cost-saving strategies, you can significantly reduce your expenses while maintaining the convenience of car ownership.

• Choose the right insurance: Compare quotes online and consider pay-as-you-drive policies for occasional use.
• Opt for fuel-efficient vehicles: Hybrid and electric cars reduce fuel and tax expenses.
• Use fuel price apps: Locate the cheapest petrol stations along your route.
• Carpooling and public transport: Platforms like BlaBlaCar and local buses or metros can save money for occasional travel.
• Avoid tolls: Plan routes using toll-free roads (carreteras nacionales), which are generally safe and well maintained.

Leasing and renting as alternatives to car ownership

If purchasing a car outright feels like a significant financial commitment or doesn’t align with your current needs, leasing or renting a vehicle can offer flexible and cost-effective solutions. These alternatives provide access to a car without the long-term responsibilities of ownership.

• Leasing: Ideal for long-term use, with monthly payments of €200–€600. Most leases include maintenance and insurance but have mileage limits.
• Renting: Best for short-term needs, with daily rates of €20–€50 for economy cars. Rentals are convenient for vacations or occasional trips.

Electric and hybrid vehicles

As Spain works towards reducing emissions and promoting sustainable transportation, electric and hybrid vehicles are becoming increasingly popular. These eco-friendly options offer numerous financial and practical benefits, making them an appealing choice for many drivers. Here are some benefits of electric and hybrid vehicles:

• Lower annual taxes: Electric and hybrid vehicles often benefit from reduced road tax (IVTM) rates, as they produce fewer emissions compared to traditional petrol and diesel cars.
• Government subsidies: Spain offers financial incentives through programs like Plan MOVES, which provides subsidies to reduce the upfront costs of purchasing electric or hybrid cars.
• Access to restricted urban zones: Cities like Madrid and Barcelona have implemented low-emission zones (LEZs) where traditional vehicles with high emissions face restrictions or additional charges. They are compulsory in cities with more than 50,000 inhabitants, although in many Spanish municipalities they have not yet been activated.

Is it cheaper to use public transport than own and drive a car in Spain?

Whether public transport is more economical than owning a car depends largely on your location, lifestyle, and travel needs. While public transport is often the more affordable and eco-friendly choice in urban areas, owning a car may be more practical for those living in rural regions or requiring frequent long-distance travel. Let’s compare the costs and benefits of each option.

Costs of public transport

Public transport in Spain is widely available, efficient, and affordable, particularly in urban areas and for intercity travel:

• Urban transport:
  • Single fares for buses, metros, and trams typically range from €1.50 to €2.50 per ride, depending on the city.
  • Monthly passes offering unlimited travel cost between €30 and €60, making them an excellent option for regular commuters.
• Intercity travel:
  • High-speed trains (AVE) connect major cities and cost €30–€100 per trip, depending on distance and booking time.
  • Regional buses are a more economical option, with fares averaging €10–€30 per trip.

Comparison: Which is better for you?

The decision between using public transport or owning a car in Spain depends on your lifestyle and location. Urban residents often find public transport to be the more cost-effective option, especially in cities where parking is expensive, and traffic congestion is common. Comprehensive transport networks in urban areas also reduce the need for personal vehicles.

In contrast, rural residents may find car ownership essential, as public transport options in these areas are often limited or infrequent. For them, the convenience and practicality of having a car often outweigh the associated costs.

For frequent travellers, owning a car provides greater flexibility and convenience, particularly when travelling to destinations not easily accessible by public transport. However, for occasional long-distance travel, Spain’s intercity transport options, such as the AVE high-speed train, can be faster and more economical.

From an environmental perspective, public transport is the more sustainable choice, aligning with Spain’s emission reduction goals. Opting for buses, metros, or trains over a personal vehicle helps reduce air pollution, particularly in densely populated cities.

Owning a car in Spain offers unparalleled flexibility, especially for rural residents and frequent travellers who require convenient and reliable transportation. However, it’s important to understand the costs involved, from insurance and taxes to maintenance and fuel. For those in urban areas, public transport may be a more economical and eco-friendly choice; while leasing or renting can provide short-term flexibility without the long-term commitment of ownership.

Before making your decision, consider the rules for driving in Spain to ensure you’re compliant with local regulations. Additionally, if you plan to own a car, familiarise yourself with the legal requirementsto avoid unexpected fines or issues on the road.