Buying a new car in Luxembourg: tips to know (2023)

Mobility is still based on the car despite the wide range of public transport services available. More than a means of transport, the car is rooted in the culture of the country. It is an object of desire, a topic of conversation and it arouses passions. Moreover, the conditions for buying a new car in Luxembourg have certain advantages over European neighbours. Synopsis.

Mobility is still based on the car despite the wide range of public transport services available. More than a means of transport, the car is rooted in the culture of the country. It is an object of desire, a topic of conversation and it arouses passions. Moreover, the conditions for buying a new car in Luxembourg have certain advantages over European neighbours. Synopsis.

Buying a car in Luxemburg: simplified procedures

Buying a new car in Luxembourg: tips to know (1)

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.

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💡Insure your new or second hand car in Luxembourg with the AXA car insurance: Assistance, breakdown service, replacement vehicle, as-new-value and more.

Car insurance

16% VAT on new vehicles

Buying a new car in Luxembourg: tips to know (2)

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.

(Video) Buying, registering and maintening your car in Luxembourg

You can also choose to buy your new vehicle abroad; the 16% 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.

Sustainable mobility: discounts for eco-friendly vehicles and taxes for polluting vehicles

Buying a new car in Luxembourg: tips to know (3)

Highly committed to reducing the ecological impact of travel, the Luxembourg government grants financial advantages to applicants to promote greener mobility. Thus, since May 11, 2020 if you buy a new zero-emissions car, i.e. one with an engine powered by electricity or hydrogen leads to a purchase discount of €8,000.

This financial aid of 8,000 euros, introduced in the context of the program “Neistart Lëtzebuerg”, is maintained for 100% electric cars, provided that the vehicle ‘s electrical energy consumption does not exceed 180 Wh/km (this is equivalent to 18 kWh/100 km).

This threshold is extended to 200 Wh/km (which is equivalent to 20 kWh/100 km), under the condition that the maximum net power of the 100% electric car’s propulsion system is inferior or equal to 150 kilowatts.

The subsidy of 3,000 euros has also been extended for cars with an electric energy consumption exceeding the threshold of 180 Wh/km.
The same applies to the 8,000 euros subsidy for cars with 7 or more seats, on condition that the applicant lives in a household of at least five people, to take the needs of large families into account.

These provisions apply to vehicles ordered between April 1, 2022, and March 31, 2024 and which are first registered for circulation before the end of 2024, taking delivery times into consideration.
Finally, in order to avoid an “export” of state subsidies, the duration of the minimum holding period has been increased from 7 to 12 months for all vehicles subject to registration. This provision will apply to all vehicles ordered before April 1, 2022.

On the other hand, the Luxembourg government has also established a support scheme for the installation of private charging stations, powered by green electricity.

This measure is considered more advantageous and a greater incentive, and for residents it replaces the tax benefit model that was implemented in 2017.It is therefore not possible to combine a purchase discount and tax deductions.

Note that since 2020, the Luxembourg State has applied a new calculation method to assess the environmental impact of motorised vehicles.

For electric and hybrid vehicles, the rules remain the same: emissions must be less than or equal to 50g of CO2/km to benefit from a purchase discount. However, the calculation is based on a new standard, the “Worldwide Harmonised Light Vehicles Test Procedure” (WLTP), allowing an estimate of CO2 emissions that is closer to reality than the old calculation method. The new calculation method has been applied to vehicles put on the road from January 2021.

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This new standard also has an impact on the calculation of the annual tax on road vehicles, which is also based on your vehicle’s emissions: the more polluting your vehicle is, the higher the tax to be paid each year. Here, only vehicles put on the road from 1 March 2021 are affected by the new calculation method.

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

The Autofestival, the High Mass of the automobile

Buying a new car in Luxembourg: tips to know (4)

Nearly one-third of annual new vehicle sales are made during the motor show.

At the beginning of each year, during 10 days, nearly 30,000 visitors come to one of the country’s 75 car dealerships for 10 days. In 2022 the Autofestival will last for two weeks, from January 23 to February 4.

On the event programme: new models, limited series to try but also special discounts...

The speciality of the festival is to bring together families looking for the right deal, as well as the curious and lovers of beautiful engineering.

Like Thomas, a young student from Luxembourg who dreams of owning a Jaguar one day. “I go there every year with friends. Luxury brands also get involved in the event. And the salesmen are happy to welcome us, even if we’re only there to look.”

But the Autofestival is also a way to do good business. An exceptional discount, accessories or options offered, each manufacturer is looking for a way to stand out. And the buyers know the difference.

Auto Festival 2023 special action


Every week, AXA gives you the chance to win 1 year of car insurance or €500 of fuel vouchers. To be one of the 24 winners,request a quote on our website or by phone. One of our agents will contact you to finalise your offer. Offer valid from 2 January to 26 March 2023. Regulationsavailable at

Buying a new car in Luxembourg: tips to know (5)

💡Insure your new or second hand car in Luxembourg with the AXA car insurance: Assistance, breakdown service, replacement vehicle, as-new-value and more.

Car insurance

Do you need advice ?

An advisor is available in every region of the Grand Duchy to offer you his services and his well-informed advice about insurance solutions :

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What are 5 questions you should ask the dealer before you buy a car? ›

Questions to Ask Your Car Dealer: Everything You Need to Know
  • Buying a new car? ...
  • What is the MSRP? ...
  • What other fees are included in the sale price? ...
  • Is there are warranty? ...
  • What is the car's safety rating? ...
  • How many miles does the vehicle have? ...
  • Is the car certified pre-owned (CPO)? ...
  • Does the car have aftermarket parts?
Feb 7, 2023

What are 4 things you need to know about buying a car? ›

Here are 5 things you should know to help you be prepared before you set foot on an auto dealership lot.
  • Know what rate you're approved for. ...
  • Know which factors impact your payment. ...
  • Know the pros and cons of 0% APR vs. ...
  • Know if new or used is right for you. ...
  • Know the differences between a loan and a lease.

What do you need to buy a car in Luxembourg? ›

In brief, registration involves:
  • applying for a license registration number (can also transfer existing from previous owner);
  • taking out an insurance policy;
  • paying the tax stamp;
  • filing the administrative record with the SNCA;
  • possible technical control (here's a guide on how to survive it)
Feb 13, 2023

What questions to ask when buying a new car? ›

Questions to ask when buying a car
  • What is the out-the-door price? ...
  • What warranty deals are available? ...
  • Can I take it for a test drive? ...
  • Can you beat my preapproved auto loan rate? ...
  • What's the ownership and maintenance history? ...
  • Has it been in an accident? ...
  • Do you have a vehicle history report I can see?
Jul 28, 2022

What not to say to a dealer? ›

Things to Never Say to a Dealer
  • “I'm ready to buy now.” ...
  • “I can afford this much per month.” ...
  • “Yes, I have a trade-in.” ...
  • “I'm only buying the car with cash.” ...
  • “I'm not sure…which model do you think I need?” ...
  • “Oh, I've wanted one of these all my life.” ...
  • “I'll take whatever the popular options are.”

What are 3 tips you should remember when negotiating for a car? ›

There are a few more negotiating tips that are particularly relevant to buying a used car:
  1. Don't let sales talk distract you. Car salespeople like to focus on the monthly payment that you are comfortable paying. ...
  2. Wait for the dealer's first offer. ...
  3. Rely on your research. ...
  4. Make a realistic offer.
May 27, 2023

Can I negotiate car price now? ›

The short answer is yes. However, for many, even the thought of negotiating new car prices can seem intimidating. Treat this experience like any negotiation and go in with a plan. The more thought you put into it upfront, the more confidence you'll feel about speaking with your dealer about the price of your new car.

What rule should you follow when buying a car? ›

Basically, the rule goes that you provide a down payment of 20% of the balance, sign a loan for a four-year period, and pay no more than 10% of your monthly income on car expenses. These expenses include any money you put towards your new vehicle, including gas, insurance, and loan payments.

What are the 3 most important factors to consider when purchasing a vehicle? ›

3 Factors to Consider When Choosing a Car
  • Vehicle Quality. The quality of a vehicle is determined by its durability and workmanship. ...
  • Vehicle Reliability. When it comes to owning a vehicle, quality and reliability go hand in hand. ...
  • Cost of Owning the Vehicle. The cost of car ownership extends beyond the selling price.
Aug 2, 2022

What is the most popular car in Luxembourg? ›

The most popular brands of Luxemburgers

Even though the 208 is the best-selling car in Luxembourg in 2022, German brands continue to dominate the market. First and foremost Volkswagen, which accounts for 11.8% of sales this year. That's more than the last three of the top 10 combined!

How much is car tax in Luxembourg? ›

VAT is due in the country of registration of the vehicle. This means that Luxembourg VAT (16 %) is due when the vehicle is registered in Luxembourg.

Can you drive in Luxembourg with a US license? ›

Your American-issued drivers license is recognized in Luxembourg without needing an international drivers license. The quality of Luxembourg's roads is high and the highway system is well designed.

What month is it best to buy a car? ›

If you aren't able to go car shopping at the end of December, May is another good option. Unlike in wintertime, you'll have a large stock of the departing models to choose from. You're also likely to find competitive deals toward the end of any month or quarter.

What is the most important factor when buying a new car? ›

Budget is one of the most important factors when buying a car. Of course, we'd all like a top-of-the-line car that's both comfortable and fast, but we have to be realistic about what we can afford.

How many miles is acceptable on a new car? ›

The general rule, though, is that anything under 200 miles is acceptable for a new car. That allows enough capacity for transport from the shipping port or between dealerships if the car is sent to a new showroom. It's also unlikely that the car would suffer any technical issues with fewer than 200 miles.

How much off MSRP can I negotiate? ›

How much off the MSRP can I negotiate? It depends on the market value of the vehicle. You can expect to see larger discounts on slower-selling vehicles. But on a popular vehicle, even a couple hundred off might be considered a good discount.

How do you beat a car dealer at their own game? ›

Beat Car Dealerships at Their Own Game
  1. Arm yourself with information. Decide on a maximum, affordable monthly payment. ...
  2. Prepare for the game. Ask a friend to join you at the dealership for moral support, and don't bring the kids. ...
  3. Negotiate at the dealership.

How do you know if a dealer is trustworthy? ›

4 Signs You've Found a Trustworthy Dealership
  1. Salespeople Who Listen. In commission-based businesses, a bigger sale means more money in their pockets (a situation that can take the focus away from the customer's needs). ...
  2. No Bait and Switch. ...
  3. Reliable Information. ...
  4. Positive Reviews.
Jan 10, 2017

What are the best questions to ask as a car salesman? ›

Essential car sales questions to ask customers and weave into natural conversation
  • What brings you in today? ...
  • May I ask why you are considering buying a new car? ...
  • Are there any specific makes or models you are interested in? ...
  • What features are you looking for in your next vehicle?
Feb 23, 2023

What should you ask at a dealership? ›

Here's a look at several important questions to ask when buying a used car from either a dealer or private party.
  • What Is the Car's History? ...
  • Are Any Service Records Included? ...
  • Has The Car Been Wrecked or Previously Stolen? ...
  • May I Have a Vehicle History Report? ...
  • What Problems Have You Had With the Car?
Feb 18, 2022

What are questions to ask in a dealership interview? ›

In-depth questions
  • What motivates you to make a sale?
  • How successful are you with selling used cars?
  • What are some of your approaches to selling to new customers?
  • How many cars do you feel you can sell in 30 days?
  • Are you comfortable with cold calling?
  • How do you alert customers to sales and discounts?
Jun 24, 2022


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