In short, the new Illinois Lease Law is good for EVERYONE.
It’s a win for the state, it’s a win for dealers and it’s a win for consumers because it will be easier for them to get into a new vehicle more often if they choose to lease. – Peter Sander, president of the Illinois Automobile Dealers Association
Let me back up…On January 1, 2015, the new Illinois Lease Law went into effect. Per the Chicago Tribune, “the Illinois law will change so that sales tax applies to the down payment and monthly lease payments. If the down payment is $2,000, the tax on that would be $165. If the monthly payment is $300, the sales tax would be $24.75 each month. The total tax for a 36-month lease would be $1,056, or $1,419 less than under the current formula. Tax rates vary by county, and in the city of Chicago the sales tax is 9.5 percent, so the impact of the law will differ by location. Further, trading in a vehicle will no longer affect the sales tax on a lease. Currently, because a trade-in lowers the capitalized cost, it also reduces the applicable sales tax. That provision ends with the new law because the cap cost is no longer taxed.”
In layman’s terms: the consumer is NO LONGER paying tax on the ENTIRE purchase price of the vehicle. Rather, they’re only paying tax on the down payment and the monthly payments thereafter.
The new law also gives consumers OPTIONS once they’re done with their lease:
- Equity: before your lease expires, you can bring the vehicle back to Oak Lawn Toyota where our Used Car Manager will place a value on the car. If it’s valued more than the Guaranteed Future Value–the Guaranteed Future Value is the minimum value of your New Toyota at the end of the loan term and is the amount Toyota Finance will pay you and be put against your final payment should you decide to return your car at the end of the term–you have equity. You can use that money to buy down the payments on your next Toyota lease.
- Profit: Before your lease expires, check online to see what similar vehicles are selling for…You can choose to run an ad, sell your vehicle, and keep the profit.
- Walk Away: If the vehicle has been wrecked and repaired or market conditions change, simply return the car and walk away. Toyota will take the loss.
- Love: If you love your car and want to keep it, come back to Oak Lawn Toyota and we will get you a new set of payments and you simply complete the purchase.
I know that these seems complicated but I PROMISE you that once we sit down with you, it will seem much simpler and you will reap the benefits of this groundbreaking piece of legislation.