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car leases

362 views 3 replies 4 participants last post by  cam_neely_8 
#1 ·
so when leasing a car how does the sales tax work? Do you have to pay the entire sales tax for the full car amount up front? or does it depend on the dealer/car manufactuer/etc.

I have seen lately some of these no money down leases and was curious about the sales tax.
 
#2 ·
it depends on the state.

I believe IL requires payment of 100% of the sales tax at the date of signing based on the cap cost of the lease.
 
#4 ·
That is correcto. You have to pay sales tax in IL for a leased car for the full amount like you would in a purchase. You do get tax credit if you are looking to trade in a vehicle so get some savings there but that will probably be offset by the lesser price you get from the dealership while doing a trade.
One thing to keep in mind, if you decide to buy the car from the lease, you will have to pay sales tax again on the purchase price of the car. Been through this once and its a pain in the ass. Having said that, we have leased for years and love doing it that way. I change cars every couple of years.
 
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