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The 40-year-old left his role as coach of Chinese side Shanghai SIPG in November to compete in his first rally.
He was two hours 18 minutes and 50 seconds behind the leader after the third stage but on the next his Toyota Hilux hit a sand dune.
Villas-Boas sustained no broken bones but was taken to hospital for checks.
The 40th edition of the 14-stage race is based in Peru, which it last visited in 2013, for the opening five stages, using a route largely comprised of sand dunes, before moving to Bolivia and ending in Argentina on 20 January.
In the motorbike section, Britain’s defending champion Sam Sunderland also withdrew on stage four and was taken to hospital.
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