Updates on Chicago Illinois Car Lease Law

Leasing just got better!

Thanks to new Illinois Auto Tax Laws!

Car leasing in Illinois is now less expensive as of January 1, 2015 due to changes in the applicable tax law. Previously, taxes were based on the full value of a leased vehicle, even though the leasee would only be in possession of the vehicle for the length of the lease. Now with the new law, tax will be applied to each monthly payment as it is in most other states in the U.S.

The Breakdown:

Previous Illinois Lease Law:

Prior to January 1, 2015, Illinois taxed the entire capitalized cost of a leased vehicle, even though it was a long-term rental, and not a purchase. For example, if your leased a $30,000 vehicle, the 8.25% vehicle sales tax for Cook County Residents for example would be an additional $2475, which could be paid, upfront or rolled into the monthly lease payment.

The new lease laws:

ON January 1st, Illinois law changed so that sales tax applies only to what the customer down payment and the monthly lease payment. So for a $30,000 vehicle with a $2000 down payment the taxes would be $165. If the payment were $300 per month, the sales tax assessed monthly would be $24.75.

The total tax for a 36-month lease would be $1056.

That's a savings of $1419 compared to the previous lease law formula.

Please note that taxes vary by county so do calculations should be done accordingly.

What this means for you, the Consumer:

Now you'll only have to pay taxes on the value of the lease duration compared to before when you had to pay taxes on the full-length value of the vehicle. That's a big change! This change means that your monthly payments will be lower and it will be easier for you to get into a new vehicle more often if you do choose to lease.  It's a win/win situation!

For more information on how much money these new lease laws can save you on a new Subaru, come in, call or Click to see our New car inventory today!

Source: Chicago Tribune //www.chicagotribune.com/classified/automotive/ct-rides-1225-illinois-autolease-tax-20141222-story.html

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