“The car has Austrian plates and belongs to my sister, but I’m the one who drives it in Budapest.” “I’ve moved back from Germany, and for the time being the car is still running on German papers.” “I work for a Slovak company and use the company car here in Hungary too.” Three situations, two shared questions: is it legal to drive like this, and what about the insurance? As a broker, I see the two getting mixed up time and again, although they are two separate sets of rules: number plates belong to the world of the Road Traffic Act and the road transport authority, while compulsory insurance belongs to the country that issued the plates. This article puts the two side by side and goes through the typical cases.
- Under Section 25/B of the Road Traffic Act (Kkt.), as a main rule, a vehicle of a domestic registered keeper and a vehicle driven by a driver resident in Hungary may take part in road traffic only with Hungarian number plates; the exceptions – habitual residence abroad, use for a total of no more than 60 days within six months with the registered keeper’s written consent, a vehicle received from a foreign registered keeper for work – must be proved with documents.
- Compulsory motor third-party liability insurance (MTPL) belongs to the system of the country that issued the number plates: a foreign-plated car is covered by the foreign compulsory insurance, which also provides cover in Hungary; Hungarian MTPL becomes compulsory with Hungarian registration – for a car bought abroad and brought home, the 30-day rule in Section 4(7) of the MTPL Act (Gfbt.) provides a bridge.
- The penalty is an administrative fine under Section 20 of the Kkt., which, according to police guidance, also involves the confiscation of the registration certificate and the number plates; on the insurance side, the main risk is long-term use in Hungary that has not been reported to the foreign insurer, and the foreign cover lapsing in the meantime.
Two separate systems: the law of number plates and the law of insurance
Compulsory motor third-party liability insurance (MTPL) is tied to where the vehicle is “normally based” (its telephely). Under Section 3 of the MTPL Act (Gfbt., Act LXII of 2009), the country where the vehicle is based is the one whose authority issued the vehicle with an official registration mark – number plates – and under Section 4(1), the registered keeper of a vehicle based in Hungary must take out MTPL with an insurer as defined by the Act – one offering MTPL on the Hungarian market – and keep it in force by paying the premium. On the one hand, then, Hungarian MTPL rules do not apply to a foreign-plated car: its compulsory insurance has to be taken out and maintained under the law of the country that issued the plates; the Hungarian policy register does not even see it, and no uninsured-period fee (fedezetlenségi díj) arises for it. On the other hand, the foreign compulsory insurance is also valid in Hungary: under the EU Motor Insurance Directive (2009/103/EC), MTPL covers the entire territory of the Union on the basis of a single premium. So the question is not whether a foreign-plated car needs Hungarian MTPL – apart from one exception discussed below, that is not even possible – but how long the car may stay on foreign plates and what the foreign insurer has to say about long-term use in Hungary.
How long is it legal to drive on foreign plates? Section 25/B of the Kkt.
The starting point is Section 25/B of Act I of 1988 on Road Transport (Kkt.). Its main rule is that a vehicle may take part in road traffic only with a Hungarian official licence and Hungarian number plates if its registered keeper is a domestic registered keeper or if its driver has a place of residence in Hungary. A domestic registered keeper is essentially someone whose place of residence, habitual residence or registered seat is in Hungary – so the rule looks not at the number plate but at the person. For a driver resident in Hungary, the Act names exceptions: Hungarian plates are not needed if the driver’s habitual residence is not in Hungary; if the driver uses the vehicle in Hungary for a total of no more than 60 days within six months – police guidance gives the same framework – and the registered keeper has consented to this in a written declaration that also states the date of handover and the period for which the driver is entitled to use the vehicle; or if the driver received the vehicle from its foreign registered keeper for use in their regular work. During a check, these conditions must be proved – according to police guidance, also subsequently within a short deadline – with a public document or a private document of full probative value, in Hungarian or with a translation. (The text in force is in the legislation itself; this summary follows the structure of the Act.)
This is how the three situations play out. The car lent by a family member living abroad may be fine for short, occasional use – with a written, dated declaration and keeping within the limit of 60 days in a six-month period; the exception was not designed for long-term, everyday use. The case of the commuter who lives abroad and comes home regularly depends on their habitual residence: if they can prove that they live abroad, the foreign plates are fine, but they must be able to produce the proof during a check. The person moving back to Hungary who brings their own car from abroad becomes a domestic registered keeper by moving back – for them the question is how much time they have to register the car in Hungary; according to police guidance, the vehicle’s origin check and Hungarian registration must be initiated within 60 days of becoming a domestic registered keeper – it is worth having the deadline currently in force confirmed at the government office (kormányablak) – and the safe reading is that registration should be started without delay after moving back. Anyone, on the other hand, who keeps a car on foreign plates merely because of cheaper insurance or tax while living and using it here breaches the main rule. One refinement: in the Nagy case (C-583/14, 2015), the Court of Justice of the European Union ruled that it is contrary to EU law to require a resident to prove the lawful use of a car received from a registered keeper living in another Member State exclusively on the spot, and to impose a fine without any possibility of exoneration where such proof is lacking. This does not make long-term driving on foreign plates permissible, but occasional use supported by documents is a situation protected at EU level.
Do you need Hungarian MTPL – and from when?
As long as the car is lawfully on foreign plates, the foreign compulsory insurance must be in force, and it also provides cover in Hungary. Hungarian MTPL becomes compulsory when the vehicle gets Hungarian plates: under Section 4(2) of the Gfbt., the obligation to insure falls on the current registered keeper from the start of the vehicle’s use, and under subsection (5), in the case of temporary plates, also for their period of validity. Proof of MTPL is typically required for registration, so it is worth timing the Hungarian contract for the day you deal with the matter at the government office – and terminating the foreign insurance only after that, so that the car is not left without cover for a single day.
One specific exception applies precisely to a car bought abroad and brought home: under Section 4(7) of the Gfbt., if someone acquires ownership of a vehicle based in another Member State and the vehicle’s destination is Hungary, they must take out insurance for 30 days from the date the vehicle is made available to them – at their choice, with a Hungarian insurer or with an insurer of the Member State where the vehicle is based. This is the bridge for the period between the purchase and Hungarian registration. One more important point: claim-free years earned abroad can be counted towards your Hungarian bonus-malus class if you provide proof – the procedure is described in the article on getting a foreign claims history recognised – so when you terminate the foreign policy, ask the insurer there for a claims history certificate.
What is the penalty – on the official side and on the insurance side?
On the official side, Section 20(1) of the Kkt. makes it punishable by a fine when a person resident in Hungary breaches the rules on the domestic use of a vehicle with foreign registration marks; the amount of the fine is set by the Act and the fines decree (Government Decree 156/2009), and according to police guidance the officer taking action also confiscates the vehicle’s registration certificate and number plates – against a receipt (Government Decree 326/2011). The fine does not replace the obligation to register the car: it still has to be brought onto the Hungarian register (honosítás), which involves registration tax (Act CX of 2003), an origin inspection and a pre-registration technical inspection under Government Decree 326/2011.
On the insurance side, the risk is quieter but no smaller. Foreign MTPL operates under the law and policy conditions of the country concerned: in several countries and with several insurers, a lasting change in the place where the vehicle is normally kept is a circumstance that must be reported, and the registration rules there may also require the registration to be cancelled after a change of residence – this varies from country to country, so it is worth asking the foreign insurer in writing. If the foreign insurance ends in the meantime – for example because the premium reminder sent to the address abroad does not reach anyone – you are driving an uninsured vehicle: the injured party is protected by the system of the National Bureau (Nemzeti Iroda, the Hungarian Green Card bureau) and the Compensation Account (Kártalanítási Számla), but the amount paid out is then claimed from the person who caused the damage or from the registered keeper. How a claim in Hungary works with foreign insurance is described in the Green Card article – from the opposite direction.
What to do in practice
- You occasionally use a relative’s or friend’s car registered abroad: ask for a dated, signed declaration stating the date of handover and the period of use, with a Hungarian translation, and keep it in the car together with the Green Card; do not exceed the limit of 60 days within six months.
- You live abroad but come home regularly: carry a document proving your residence abroad.
- You are moving back with your own car: take out Hungarian MTPL with effect from the day of registration, cancel the foreign contract only afterwards, and ask for a claims history certificate. The order of steps is detailed in the article on moving back.
- A car bought abroad and brought home: under Section 4(7) of the Gfbt., take out insurance with a Hungarian or a foreign insurer for 30 days from handover, after which Hungarian registration and permanent Hungarian MTPL can follow; the Hungarian side is described in the article on what to do when buying or selling.
- A foreign company car for work: ask your employer for a document on your use of the car.
As a broker, I can help on the insurance side: if you let me know before registration, I prepare the comparison of Hungarian MTPL quotes and the paperwork needed to have your foreign claims history taken into account; if you get stuck interpreting the foreign insurer’s conditions, I help where I can. The official procedure – government office, registration tax, inspections – remains your responsibility; there, the government office’s guidance is authoritative.
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Sources
- Road Traffic Act (Kkt., Act I of 1988) Section 20(1)(l), Section 25/B – domestic use of a vehicle with foreign registration marks, fine
- MTPL Act (Gfbt., Act LXII of 2009) Section 3 (country where the vehicle is based), Section 4(1), (2), (5), (7) – obligation to insure
- Court of Justice of the European Union, Case C-583/14 (Nagy v Vas Megyei Rendőr-főkapitányság), 2015
- Directive 2009/103/EC on motor vehicle liability insurance (single premium, EU-wide territorial scope)
- Government Decree 326/2011 – road transport administration tasks, vehicle registration
- Act CX of 2003 on registration tax
- Hungarian Police (police.hu): Rules on operating vehicles with foreign registration plates (8 July 2013) – domestic use, checks, sanctions
