(Updated October 1, 2013)
The short answer to this question is YES!
Need a Libyan drivers license?
From what I understand, some people have been told that you must have a Libyan drivers license in order to purchase a vehicle in Libya. However, from our experience having bought cars here in Tripoli it was not necessary. If you want to be extra sure, however, it is not too difficult to get the Libya license. There are several steps involved, but it can be done with patience and perseverance! See our article on “How to obtain a Libyan Driver’s license” for more information on this.
Need to have residency
The other thing I was told is that you must have residency when buying a car in Libya. One person told me he could do it on my 6 month multi-entry visa, but the Volkswagon dealer told me that I needed to have residency. This is similar to many other countries in North Africa! Another guy in our office here was told he needed residency to get his license. When he explained that he was in the process of getting his residency they went ahead and gave him his license. Best to try to have your residency before you go to get your Libyan license!
It also surprised me that I would have to pay 500 LYD tax as a foreigner buying a vehicle. I guess that is part of doing business in Libya.