Thank you to a new Illinois law that takes effect January. 1, 2015, state taxes on vehicle leases will exist reduced by as much as 50 pct, assuasive consumers to become more machine for less money. House Beak 2317, signed by Gov. Quinn in May 2014, alters the style taxes are collected on low-cal-vehicle leases.

Prior to Jan. one, a leasing customer paid tax on the unabridged purchase price of the vehicle. Afterward Jan. ane, customers intending to lease a new vehicle will pay taxes only on coin due at lease inception and monthly lease payments. Because most vehicles have a rest value of 50 percentage or more, this change reduces the taxes owed past new lessees by l percent or more.

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Nationally, the number of new-vehicle owners that are leasing has grown to 26 percent – a figure that has doubled over the last v years. Illinois has lagged well behind at just xiv per centum. Leasing rates in Chicago are among the everyman for any metro market in the United States. Past comparison, New York metro has a lease rate of 50 percentage and Cleveland, 48 pct. The change in the way vehicle leases are taxed in Illinois should make leasing a much more attractive pick for new-machine shoppers.

"The Chicago metro market has never had practiced lease penetration because of the way the state taxed vehicle leases," said Colin Wickstrom, Chicago Machine Merchandise Association (CATA) chairman. "With this change in the taxation law customers volition be able to afford more automobile than ever – maybe lowering their monthly payments at the same time."

Prior to January. 1, a DuPage County resident leasing a $27,000 vehicle for 36 months with no money downwards would expect to pay well-nigh $i,890 in state taxes. Subsequently Jan.1, that aforementioned customer would pay just $945 in taxes – assuming the vehicle had a rest value of 50 percent. That's a savings of $945, amounting to more than than $25 per calendar month. The savings get even greater on 24-calendar month leases or more than expensive vehicles. For example, a DuPage County resident leasing a $threescore,000 vehicle for 24 months with a 65-per centum residuum prior to Jan. 1 would pay $four,200. Subsequently January.ane, that same customer would pay $1,470 in taxes, saving $ii,730 in taxes over two years.

While many assume new vehicle leasing is reserved just for luxury brands, a list of the tiptop 10 models leased in the United States renders that exclamation false. According to Experian Information Solutions*, each of the top ten lease vehicles has a starting M.South.R.P beneath than $25,000. In improver, compared to ownership, leasing can lower the monthly payment past $100 or more than.

The Illinois new-car dealers accounted for $28.4 billion in total retail sales in 2013 – 15 percent of the land's total.

"The CATA, along with the Illinois Machine Dealers Association, worked to show the Illinois Department of Revenue that changing the way the country collects tax on vehicle leases would not only be expert for the consumer, but would outcome in more revenue for the state," said Dave Sloan, CATA president.

Starting on Jan. 1, the CATA volition launch a million-dollar educational campaign branded "The Lease You Can Do: More than Machine, Less Money." The multifaceted print, broadcast and online effort is designed to help Chicago expanse buyers understand why vehicle leasing makes financial sense and how the leasing tax police changes will help them lower monthly payments or beget a more expensive vehicle.