Buying a vehicle can be a confusing process. There’s the MSRP, which is the manufacturer suggested retail price, but this doesn’t include the additional fees you’ll pay when you sign. You’ll also pay a vehicle registration fee, document fee, and sales tax. The sales tax varies from state to state, so we’re breaking down what you need to know about the Illinois car sales tax.
The amount that you have to pay for your Illinois used car sales tax or your Illinois new car sales tax depends on what city you live in. For example:
When you choose to lease a car in Illinois, you’ll pay sales tax on the cost of your new or used car — the key factor is that you’ll only owe tax on the part of the car you lease — your monthly payment — rather than on the total value of the vehicle. If you choose to purchase your vehicle at the end of your lease term, you’ll pay a sales tax on the depreciated price.
When you trade in a vehicle, you help offset the cost of your new vehicle. If the dealership can sell your trade-in, you will be taxed on that reduced price. For example, say you trade in your current Toyota and receive a trade-in value of $5,000, then you buy a new car for $30,000 — you’ll pay a sales tax on the remaining $25,000.
If you’re a new resident of Illinois and purchased a vehicle in a state where the sales tax was lower, you must pay the difference to the Illinois Department of Revenue. This is because the Illinois Vehicle Code has a Use Tax for the privilege of using a vehicle in Illinois.
To learn more about paying vehicle sales tax in Illinois, you can contact us to speak to a member of our finance team, or you can stop by our showroom in Naperville.