Illinois leasing law change
If you’re an Illinois resident who has ever considered leasing rather than financing a new car, you’re probably well aware that the tax laws have not exactly been in your favor in that department. More specifically, Illinois has for some time been in the stark minority of states to to tax the entire value of the vehicle for a lease, and now the Illinois leasing law change that’s gone into effect on January 1, 2015 will create a vastly different — and beneficial — situation for those looking to lease.
Specifically, what will happen now is that rather than paying a tax that is based on the value of the vehicle, you’ll pay taxes on what you actually pay over the course of your lease — that is, your down payment as well as your subsequent monthly payments. Should you end up paying any excess mileage fees or any are incurred for wear and tear, a tax will be applicable to those as well.
For example, let’s say you’re one of our customers from Illinois looking to lease a new Buick Regal, and for the sake of simplicity lets say the value of the model you’re looking at is exactly $30,000 and your county’s tax rate is 8.25%. In total then, you’d need to pay a total of $2,475 in taxes on that vehicle, which could be paid up front or rolled into your monthly payments. Either way, it’s a significant tax on something you’re not necessarily planning to own.
Under the new law, which would tax your down payment and monthly payments, you’d see significant savings. Let’s say your down payment was $2,000 and you paid $300 a month after that for the lease term, your total taxes paid after a typical 36-month lease would be $1,056. That’s a total savings of $1,419 — more than half of the taxes shaved off — because of this new change to the law.
In closing, there’s never been a better time to lease with us here at Palmen Buick GMC Cadillac, so go ahead and check out our inventory and current lease incentives! Give us a call if you’d like to come in for a test drive or if there’s anything we can answer for you about the new lease laws for the state of Illinois.
