Save Money When You Buy A Car!

Frequently Asked Questions

    What is the maximum I can save by following your advice?

    Generally, the answer is 1%.

    How does Leasing affect the sales tax?

    Leasing a car in Illinois results in a surprising  additional sales tax obligation.

    First, since the lessor (usually the dealer) is moving the vehicle out of inventory and into the lease agreement, the dealer must pay a sales tax on their cost of the car. That sales tax will always be passed on to you, either as an up-front charge or built in to your lease payments.

    Second, if at the end of the lease term you decide to purchase the car, you are causing the ownership of the car to transfer from the lessor to yourself. That is the equivalent of a vehicle purchase and you will pay sales taxes again, on the price you purchased the car for.

    So, you pay sales taxes on the full price when you begin the lease, and you pay sales tax on the depreciated price if you purchase the car at the end of the lease.

    However, unlike most other states, in Illinois you do not pay sales taxes on your lease payments.

    Important Update: See this news release.

    How does a trade-in affect the vehicle sales tax?

    As long as the dealer is in the business of selling the type of vehicle you are trading in, the taxable sales amount will be reduced by the value of the trade in you negotiated with the dealer. But, if for example you trade in a boat when you buy a car, and the dealer is not in the business of selling boats, then your taxable amount will probably not be reduced by the trade in.

    How does a down payment affect the vehicle sales tax?

    No affect. You pay sales tax on the final purchase price, regardless of the amount you finance.

    What if I buy from a family member?

    In this case the sales tax is assigned as a flat fee of $15.00.

    Do the taxes described here include all government fees?

    No, other fees such as “Wheel Taxes”, parking stickers, etc are not included here.

    Ho do rebates affect the sales tax?

    Surprisingly, there is no affect. A manufacturer’s rebate is not subtracted from the final purchase price for the purposes of calculating sales tax.

    How are private party sales taxed?

    For transactions less that $15,000 the tax is a flat fee based on the vehicle’s age.

    For transactions greater than $15,000 the tax ranges from $750.00 to $1500.00 based on the purchase amount.

    See this guide (pdf) for more details.

    Can I trade in multiple cars to purchase on car?

    Yes. And the total value assigned to your trade ins will be used to reduce the purchase amount you are taxed on.

    What is my sales tax on a new vehicle if I register it outside of Illinois?

    That depends if Ilinois has reciprocity with the state where your vehicle will be registered. Consult this guide to determine if you will be taxed by Illinois, and the amount.

    For example, if you register in Wisconsin you will be exempt from Illinois taxes, but if you register in Michigan you will be charged 6.00% tax in Illinois.

    The retail sales tax here in Wheaton is 8.25%. Why is it listed on this site as 7.25%?

    You’re looking at the general merchandise tax rate for Wheaton, which is indeed 8.25%.¬† Vehicle sales taxes are set separately, and the 7.25% figure is correct.

    The Illinois Sale Tax Finder website says if I buy a vehicle in DuPage and Register it in Chicago the tax is 8.5%. Why is it listed as 9.25% on this site?

    The Illinois Sales Tax Finder website https://www.revenue.state.il.us/app/trii/ does not include the 0.75% tax you will pay to Cook County.