Most Americans assume that once you buy your car, pay the sales tax, register it, and keep up with routine fees, you’ve met your financial obligations as a vehicle owner.

Unfortunately, that’s far from reality in many parts of the country. The most glaring example right now is Virginia, where residents are dealing with a yearly tax system that feels less like responsible public policy and more like a state-sponsored shakedown. And the taxes continue to get billed for year after year.

A Virginia woman recently opened her annual vehicle property tax bill to find a stunning total: $2,104.45. She wasn’t being penalized for late fees, accidents, or violations. There were no repairs included. This wasn’t registration or insurance. It was simply a tax for owning vehicles she had already paid off.

The state assigns an assessed value to each vehicle, applies a rate of $2.35 per $100 of that value, and charges the owner every single month the vehicle remains titled in their name. She pointed to the bill and summed up the frustration millions of Americans feel: This is just for owning the car. Nothing more.

What most people don’t realize is that the government is the one deciding what your vehicle is “worth” — not you, not the market, and definitely not an actual buyer. In states that impose yearly vehicle property taxes, the valuation is created by your local tax assessor or Commissioner of the Revenue.

They rely on industry databases like NADA Guides, J.D. Power, and Black Book to determine a “fair market value,” even if that value has nothing to do with your vehicle’s real condition or current market demand.

That means your car’s official valuation can increase even as it ages, simply because the guidebooks reflect a national trend or a temporary spike in used car prices. The state then taxes you on that number, regardless of whether you could actually sell your car for it.

Owners can appeal these valuations, but anyone who has tried knows the process is frustrating and rarely successful.

To dispute the number, you have to prove high mileage, major mechanical problems, or accident history — all while the county defends its valuation because those inflated numbers generate revenue. You can own a dented, high-mileage car and still get taxed as if it were pristine. That disconnect is part of what makes the system feel so unfair.

This entire setup creates a perpetual double-taxation model. When you buy a vehicle, you pay sales tax up front. Depending on the state, that can be significant.

But in states like Virginia, you pay again every single year for as long as you own it. Registration fees, insurance requirements, state inspections, emissions testing, fuel taxes, and local add-on fees layer on top of that. For families with multiple drivers, or rural residents who depend on vehicles to get anywhere, these recurring charges become a major burden.

And now, the federal government wants to add another layer. The House Transportation & Infrastructure Committee has introduced a proposal to impose new annual federal taxes on all registered vehicles: $200 per year for electric vehicles, $100 for hybrids, and $20 for every other passenger vehicle.

These fees would apply indefinitely, regardless of driving habits, condition, income level, or vehicle necessity. The proposal is expected to raise around $7 billion per year, but even that only fills about one-third of the current shortfall in the Highway Trust Fund.

What’s worse is that the same bill delivers an average tax cut of $278,000 over ten years to the top 0.1 percent of earners. Everyday Americans pay more to keep driving, while the wealthiest see the biggest benefits. This imbalance is fueling much of the outrage behind the current debate.

Historically, gas taxes funded the nation’s highway system because they acted as a logical user fee. The more you drive, the more fuel you buy, and the more you contribute to maintaining the infrastructure you actually use. The problem is that gas taxes haven’t been adjusted for inflation since 1993.

As vehicles have become more fuel-efficient, the revenue stream has fallen behind. Instead of modernizing the system or transitioning toward a fair mileage-based model tied to real road usage, policymakers have increasingly leaned on ownership-based taxes — the least fair approach of all.

The human cost of these policies rarely gets attention. For many Americans, a vehicle isn’t a luxury; it’s the only way to get to work, take kids to school, make doctor appointments, or care for elderly relatives.

Yearly taxes based on fluctuating and often overestimated valuations create financial unpredictability that families cannot plan for. They also disproportionately hurt the same people who rely on older vehicles because they can’t afford new ones.

There are far better solutions available. Policymakers could update fuel taxes to reflect inflation, adopt a realistic and privacy-protected mileage-based approach, streamline wasteful transportation spending, and prioritize projects that genuinely improve infrastructure safety and efficiency.

All of these would create a transparent model where people contribute based on actual use, not on arbitrary valuations created in government offices.

Virginia’s situation has become a flashpoint because it reflects a national trend: Americans feel squeezed, and they are increasingly questioning why the government continues to charge them — year after year — for something they already own. Vehicle property taxation may look like easy revenue on paper, but it’s deeply disconnected from economic reality and from what drivers need to stay mobile and financially stable.

Ending annual vehicle taxation isn’t a radical idea. It’s a return to fairness and common sense. When you’ve already paid sales tax, kept up with registrations, and followed every rule required to drive legally, the government should not be allowed to treat your car like a permanent ATM. The pushback we’re seeing now is long overdue, and lawmakers would be wise to pay attention.

This story is still unfolding. And it’s far bigger than most people realize.

Video link: https://youtu.be/xpMlsA_sPNQ

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Lauren Fix is an automotive expert and journalist covering industry trends, policy changes, and their impact on drivers nationwide. Follow her on X @LaurenFix for the latest car news and insights.