You can buy a used car without a problem. It would be issued as a EE license but you do intend to stay for more than a year then you would have to obtain an Italian license. You can then insure the car via Clements Int'l.. an american insurance broker for expats. I wouldn't get an italian insurance coverage, it is very expensive.

You may want to consider renting a car via AutoEurope which has long term rentals for americans.