Ha this is a never ending saga.
As I understand it at the minute, you have 6 months when you bring a UK car. It has to be taxed, MOT and insured same as the UK. If you get caught without any of the tax/MOT etc expect an on the spot fine or your car being carted off. After 6 months it has to leave the country or be converted to a Spanish plate.
Now to do that, you have to take it to the Spanish equivalent of an MOT center, its called an ITV here. The lights will need adjusting and stuff. Also, if there ANYTHING on your car thats not standard, like window tints, new alloys or even a towbar, it wont pass. In Spain you have to have car mods done at an authorised place who will certify the modifications. I've even read of people failing because they have a different tyre size on compared to how a car left the factory. In short its a massive expensive ball ache and only worth doing if you really love your car.
Now there is talk of a process thats pretty new where you pay an import tax but keep your UK plates. However no one really seems to know how thats properly done, including people at the hacienda and at the traffico. I know people who have paid the tax and been told thats it, but then told thats just the start of the process. The tax is based on engine size and emissions.
Now, buying a car here is equally as complicated. You'll need a NIE to do so, you have to register the new ownership at the traffico and to do that you'll need to be pretty nifty with your Espanol. Or you can pay a gestoria a couple of hundred to sort it. But wait, thats not all you'll have to pay, on top of paying to transfer the car and paying someone to deal with the red tape there is a tax on all second hand car sales. Again based on emissions and engine size depending on the age of the car. I'll find the table shortly.
I drove our car here with a trailer, it was the only way to do our move because we had a kid, a dog and a life to bring. I've been here since last August and I've not been pulled over (yet) - they seem to do the checks around Feb time as its most likely that anyone whos got a foreign car here in Feb/March has been here a while. Apparently they stop it come the new tourist season. I've also got a back up if I do which I won't go into, but safe to say the way to deal with it is being pretty careful where I go in the UK car. They tend to do the stops in the same place and I only drive it a very short distance to the office and my house, avoiding the places they pull people over but that doesn't make it any more legal! If you've got to drive in places where theres going to be lots of foreigners, like the international school, they'll be there.
I'm in the process of getting rid now though because if I am honest I can't be arsed with the stress and worry, and it makes more sense to have a car on Spanish plates. I'm constantly worried I'll get pulled and towed and at the end of the day, I'm being a prick by flaunting the rules. Its a catch 22 because driving over is for a lot of people the only option but then your stuck with a UK car illegally after a while!
we are moving out permanently next year and I'm looking for a little advice on cars in Ibiza. Is it best to bring our own vehicle over or purchase one out there? If we do bring our own does it have to be re-registered as Spanish? What do people do re insurance, MOT, Tax or is there something different? Many thanks 
