Driving in Andorra la Vella is not difficult, however the traffic can be pretty congested during rush hours. The city is small and the numbers of local and tourist cars is high, so the old streets can simply not cope with such heavy traffic. For the same reason, parking on the street can be difficult to find.
You should pay attention to the weather if you drive to Andorra during winter. While the weather in Spain or France might be mild, Andorra usually has colder weather and snow. If your car is not prepared with winter tyres and snow chains, you might not be able to drive. While winter tyres are only recommended, snow chains are mandatory during winter. You need to have them in your car, even if you don’t need to use them.
Since Andorra la Vella is not so big and the public transportation is good and cheap, it is probably best to book a hotel with parking and leave your car there.