A vehicle radar system (3) having at least one transceiver arrangement (7) arranged to generate, transmit and receive reflected radar signals. The transceiver arrangement (7) includes an ADC arrangement (10) that is arranged to output a digital IF signal (20) in a time domain to a DSP arrangement (12). A first DSP function (12a) is arranged to: identify and retain sample points of the digital IF signal (20) in a spectral domain with signal components that exceed a certain level threshold, such that an approximation signal (36) is formed in the time domain, identify possible sections (37) of the digital IF signal (20) in the time domain that exhibit interference exceeding an interference threshold, determine whether or not to replace such sections (37) with equivalent sections (38) of the approximation signal (36), and if applicable, replace such sections (37) with equivalent sections (38) of the approximation signal (36).