Have a deposit down on a RAV4 Prime that will get delivered next month. Been reading a lot online about people taking advantage of the $6500 lease cash that is currently bring offered by Toyota to finance the purchase, then immediately buyout the lease to overall pay less than just buying the car outright.
The only consideration I’ve seen is to make sure that my state’s taxation situation doesn’t make it so that it’s actually not worth it to do it. Can anyone help provide some guidance on how the numbers will shake out? The purchase price of the car is MSRP at $53,337, and I live in Chicago.
You should not be paying MSRP for a RAV4 prime to start with. I believe in Illinois you only pay sales tax on the monthly payment,not the full price of the vehicle.At buyout you would have to pay full sales tax on the value of the vehicle at the time of purchase. So you pay tax on each lease payment then sales tax on the buyout price.
Just got to the stage where we are starting to negotiate the lease terms. Here’s the initial agreement they provided me.
Based on my limited understanding of the current lease agreement, It seems to imply that if I opt for a one-payment lease, I would be paying $5,649 (cap cost reduction) + $33,718 (36 payments) - $6,500 (lease cash), totalling ~$32,867. and a residual value of $31,468.83, which would result in me paying $64k when the agreed upon value is only $51k.
I’ve been hearing everywhere that the lease buyout option is supposed to save me money, so I’m a bit confused at how these numbers are shaking out. Am I just doing my math wrong, or does the dealership have the numbers wrong? FWIW, I am located in Lake County, IL.
Text me for a quote. I should be able to beat this even with shipping. I don’t believe you should be double taxed. You’ll be taxed on the payment then sales tax due on the buyout. I can have my dealer estimate your buyout price after the first month also.
Saw this on an IL dealer’s website stating some new changes in IL tax law as of Jan 1 this year:
"Under the previous sales tax law, lessors paid a use tax on the full capitalized value of the vehicle to be leased, while the lessee was not required to pay any sales tax.
Now with the new sales tax law, vehicle leases that run for longer than one year will see a tax applied to each monthly payment, which is the way it works in most of the other states across the nation."
Does the one-payment + buyout advice still apply given this?
City of Chicago taxes differently than the rest of the state.
Outside of Chicago, you pay taxes on the leased portion of the vehicle.
If you live in Chicago, you pay the City sales tax rate + 11% City of Chicago lease tax (2025). It’s about ~20% effective tax.
Previously, you paid taxes on the full amount of the car purchase even though you only used “half” of it.
Zip code matters on your lease.
9.5%** in the city of Chicago
8.25%** in suburban Cook County
7.25%** outside of Cook County and Chicago
