Are you a (perspective) car owner? Bynco has compiled for you a list of the most important things to know about car ownership in the Netherlands.
1. You are allowed to drive in the Netherlands with a foreign driving licence for a maximum of 185 days
This period starts from the moment you are registered in the Netherlands. If your stay is longer than 185 days, you must have your foreign driving licence exchanged for a Dutch one at the municipality. You risk a fine if you do not do this. Obviously, you are not allowed to drive in the Netherlands with an invalid (foreign) driving licence. If you do, you also risk a fine.
You can only exchange your foreign driving licence if it was issued in an EU or EFTA (European Free Trade Association) country, or in a country with which the Netherlands has an agreement because it meets the European driving licence guidelines. If this is not the case, you will have to take driving lessons and pass a theory and practical driving test to obtain a Dutch driving licence. More information on this and on exchanging your driving licence can be found here.
2. Car registration, how it works
Car registration (tenaamstelling) is the term used in the Netherlands to describe the transfer of a car's registration certificate to the name of its new owner. If you buy a car from us, we will arrange the registration at the time of delivery - unless you have a foreign driving licence. In that case, delivery and registration must take place at your nearest RDW approval station. We are there to help you.
For the registration at the RDW, you need a valid driving licence and an extract from the population register (not older than 3 months) of the municipality where you live. In the case of a Dutch driving licence, you do not need more than that for the registration.
3. These are the documents you need to buy a car as an expat in the Netherlands
If you have a valid Dutch driving licence, it is the only document you need to buy a car. Do you have a valid foreign driving licence? Then you need this plus your passport (not a copy) and an extract from the civil registry (not older than 3 months) of the municipality where you live.
4. What you need to buy a car with financing as an expat in the Netherlands
In that case we need a copy of the following: payslip, passport or ID card, residence permit and bank statement. Your payslip and bank statement may not be older than 3 months. In addition, the bank statement must show the amounts debited and credited (rent, mortgage, salary, etc.) for an entire month. Of course, you also need a valid driving licence so that the car can be registered in your name. It does not matter whether you have a Dutch or foreign driving licence. Follow this link if you would like to know more about car financing.
5. How to arrange insurance for your (new) car in the Netherlands
In the Netherlands, it is compulsory to insure your car, otherwise you will not be allowed on the public roads and you risk a fine if you do. After buying a car online, we will send you the registration code of the car the day before delivery. You need this code to take out insurance. Tip: visit the Pricewise website to compare car insurances. After that you can immediately take out the insurance that suits you best via Pricewise. Make sure that the start date of the insurance is the same as the date on which you receive the keys to your new car.
6. These are the costs of driving that you have to reckon with in the Netherlands
For convenience, we distinguish between fixed and variable costs. Insurance (compulsory) and road tax (also compulsory) are fixed costs that you pay every month. Fuel (or electricity), depreciation and maintenance are variable costs. The fixed costs for a car are between €75 and €100 per month. The variable costs are often higher and depend entirely on the number of kilometres you drive each month, the fuel/energy price and the amounts you reserve for maintenance and depreciation.
7. You can buy a car as an expat with a foreign driving licence
However, you are obliged to have your foreign driving licence replaced with a Dutch one at the town hall within 185 days of your arrival in the Netherlands. There are costs associated with this. If you come from outside the EU/EEA, you will first have to pass both the Dutch theory and practical driving test before you can apply for a Dutch driving licence. Replacing your driving licence usually takes a week or more. In addition, because you are handing in your 'old' driving licence at the municipality, you are not allowed to drive during this period. Read more about replacing your driving licence here.
8. How to deliver your car if you have a foreign driving licence
In that case, we will not deliver the car to your home, but we will make an appointment with the RDW station closest to you. This is where the registration of the car is done. Bring your driving licence and an extract from the civil registry (not older than 3 months) of the municipality where you live. If you have any issues or questions, we are here to help. The rest of the delivery process is the same as the home delivery.
9. How road tax works in the Netherlands
Road tax, also known as motor vehicle tax, is a form of tax that is (compulsorily) paid by car owners. The proceeds are used by the Dutch government to pay for the construction and maintenance of the national road network. How much road tax you pay for your car depends on the following factors:
- The weight;
- The fuel type (petrol, diesel, hydrogen, electricity*)
- The CO2 emissions
- The province you live in.
*If you have a fully electric car, you do not have to pay road tax.
After purchasing your car and registering it in your name, you will receive an invoice for the road tax due from the Dutch tax authorities by post. Then - after a few weeks - you will receive an authorisation form. You can use this to authorise (but are not obliged to authorise) the Tax and Customs Administration to make a direct debit payment. If you do so, the tax authorities will debit the amount due from your account at the end of each month. If you do not use a direct debit, the Tax Authorities will send you an invoice at the end of each quarter for the road tax owed for three months. You must pay this bill in time yourself.
As soon as you have sold your car, the direct debit will automatically stop and you will no longer have to pay road tax for the car in question. If you paid quarterly, you will not receive any more invoices. If applicable, you will be reimbursed for the amount of road tax paid in excess. Or, if you have paid too little, you will receive a final settlement and you will owe the tax authorities X amount.
10. As an expat in the Netherlands, you can benefit from the so-called 30% rule
The 30% rule is a Dutch tax regulation for expats with expertise which is hard to find on the Dutch labour market. If you are eligible for this scheme and you make use of it, you are entitled to a tax-free reimbursement of 30% of your taxable income to compensate for so-called extraterritorial expenses. These are additional expenses related to living and working outside your country of origin. The costs for applying for a Dutch driving licence or for replacing your foreign driving licence are extraterritorial costs and therefore fall under the 30% rule.
Suppose you cannot have your driving licence exchanged for a Dutch driving licence because it was issued outside a:
- EU country;
- EFTA (European Free Trade Association) country;
- Country with which the Netherlands has no agreement because it does not comply with the European driving licence directives...
...then it is possible, thanks to the 30% rule, provided your foreign driving licence is still valid. In that case, you do not have to take driving lessons or take a theory and practical test to obtain a Dutch driving licence. This applies to you and to partners and children living at the same address. Here you can read which countries are not part of the EU and EFTA and do not have an agreement with the Netherlands.
11. These are the financing and leasing options for expats in the Netherlands
As an expat in the Netherlands, you can choose from the following financing options:
- Revolving credit
A revolving credit gives you continuous access to an amount of money that you can use to buy a car, for example. You can withdraw the amount in one time or in parts and you only pay interest on the amount you withdraw.
- Personal loan
Also called revolving credit. During the lifetime of this type of loan/financing, the interest rate and the instalment (repayment and credit repayment percentage) are fixed.
- Final Term Financing
With this type of financing, the residual value of the car is taken into account. You only pay interest on the residual value, which makes the monthly amount considerably lower than if you were to pay off the entire financing.
Financial Lease and Operational Lease are the two types of leasing you can choose from as an expat in the Netherlands.
Financial Lease vs. Operational Lease
Financial Lease is comparable to a mortgage with fixed monthly fees, while Operational Lease is comparable to renting, because you rent the car from the leasing company. In addition, maintenance, repairs and insurance are included with Operational Lease. In conclusion, in the case of Financial Lease you become the owner of the car, in the case of Operational Lease you do not, as the leasing company is the owner. Read more about financing and leasing options for expats in the Netherlands here.
The best, easiest and fastest way to buy a car online in The Netherlands
Finding and buying a reliable car in a country where you’re unfamiliar takes a lot of time and effort. Not if you go with Bynco, the one-stop-webshop for expats in need of a car.
At Bynco, you buy or finance a reliable car completely online with the advice and support of our car experts. Risk-free thanks to a 12-month warranty, free return within 2 weeks policy, and our promise that we’ll pay for any unforeseen car costs incurred during the first 12.000 kilometres. We’ll deliver the car to your doorstep within 2 weeks, and payment takes place on delivery, safely via online banking. So go Bynco and save yourself the hassle.