A Bumpy Road – My Car Taxes Are A Mess So I Just Prepaid Them

I bought a car in July, after driving a company car for the last 3.5 years. With owning a personal car comes owing car taxes (“motorrijtuigenbelasting” in Dutch). And of course, something happened with the automatic payments.

Car Taxes Are The Worst

Earlier I wrote about car taxes. In The Netherlands, it really sucks to own a car, from a tax perspective. I mean, we’re a great country to operate a multinational business from, or own a shitload of highly leveraged real estate, but please don’t have a high-paying job, own a car, or have personal wealth.

My car taxes are 113 euros per month. For that, I get the right to use public roads. We don’t have toll-roads, apart from a tunnel or two, so perhaps it’s not too bad.

The 113 euros is the result of my car’s fuel (diesel) and weight. Heavier cars are taxed more, and petrol cars are cheaper than diesel (full electric is tax-free!).

Administrative Errors

Before I bought the lady in red, I drove a company car for 3.5 years. Before that, I owned a car myself. When I owned that car, I authorised the tax authority to perform direct debits against my bank account to take the tax automatically every month. That worked fine.

When I bought my car, I got a letter from the tax authority that said they still had the authorisation on file and I could pay using direct debit without doing a thing. Of course, this didn’t work. I got letters every month, saying the direct debit failed, but they would correct it the month after. No big deal, but, of course, it didn’t work.

So after three months, I got a bill to pay all three months at once. It didn’t matter, because I budgeted the money it was readily available. I also got a letter asking me to pay for the next three months!

Monthly Payments Please!

Now I get paid every month by my employer. And I get it, some costs are to be paid annually. But with my car, it’s so much easier if I can just pay monthly. I mean, monthly income and monthly bills are the easiest to budget for.

So I called the tax authority to ask them to fix my direct debit and to take the money automatically every month. They said “no problem sir, we fixed that right away! Your first direct debit is scheduled for January the 5th 2020. Please pay for the next three months manually.”

So I went ahead and paid for Q4 the same day I paid for Q3. That’s a 659 euros bill right there.

While it will hurt my October savings rate, it won’t hurt my overall yearly savings rate since this was money I had to pay this year anyway.

Do you pay car taxes? And how do you do it? Let me know!

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