Driving Licence regulations for residents
Residents living in Tenerife for more than 6 months are required to:-
Inscript your UK licence. Do do this you need to advise the Spanish driving authorities of your permanent address here in Tenerife. After they have checked with the DVLA in the UK (this can take up to 6 weeks ) to make sure you don't have points or a ban, then they give you a certificate which you need to keep with your UK licence.
You can exchange your UK licence for a Spanish one. You still have the wait for DVLA to confirm your driving status and then you hand in your UK licence for a temporary Spanish one. You then receive your new plastic licence through the post direct to your home.
It is also a requirement to carry your passport or certificate of residence with your driving licence. If you are stopped by the police and do not have these documents with you, you may be fined.
If you do not like the risk of loosing you passport then take it to a Notary (the nearest is behind the chuch in Alcala in the same building as Unelco - English is spoken) and ask for a notorised copy it costs about ?6 - a lot cheeper than a replacement passport.
A friend of mine needed to be put temporarily on his fathers' UK car insurance. He only had a Spanish licence and the application was refused. He didn't argue the point as there had been a recent death in the family and he couldn't face the hassle. However, he was able to hire a car with this licence.