I got this quote for a one time lease pay $6950 in Illinois Lake County where taxes are 7.25%. Trying to understand how they determined the $1450 taxes which are $500 more than what I see in the LEASEHACKR calculator, which shows me $950.
The dealer says the taxes were determined by the program not manually. Could you please help me out.
Can you post the LH calc for your deal and tell us if you had any rebates with this purchase
Here is the calculator, 7.25% taxes aren’t matching
No matter what, although it looks like it changes nothing here, IL taxes are up-front.
Hi there, that’s where I am confused since it is a 1 time lease pay and the total taxes should be on payment including rebates which is $15,250.
They may have applied 9.5% in taxes, not sure how to argue with them.
A few questions:
Do you live in Lake County? Tax is due where you live, not where the dealer is located.
Are you using a trade in to offset your new lease? IL only gives a $10k tax credit on trade ins.
If there is a tax overpayment the leasing arm will just apply it to your payments or refund you. It’s not like the dealer will pocket the money.
I had a similar issue with an out of state BMW deal where the software was showing some strange tax thing in IL and the dealer had no idea, was just following the instructions. Ended up having an overpayment of $2k or so (tax on the lease vs the whole vehicle) and just had no monthly payment for like 8-10 months since BMW applied the over payment to the lease payments as essentially an upfront.
Not ideal if short on cash, but the large financing companies do the right thing in the end.
FYI I looked up the lake county sales tax and seems to be 8.75%? In which case the dealer quote would be correct.
In Illinois, the sales tax on cars is different than the rate used for merchandise you buy in a store so 7.25% is correct but keep in mind that the sales tax is based on where you live and not where the dealership is located. Doc fees and rebates paid back to the dealer are taxable. The earlier question regarding where the OP lives needs to be answered to determine the correct tax rate.
As someone who operates in Illinois I can tell you the LH calculators never align with perfectly with dealer desking tools.
Correct. OP needs to look at his city’s or town’s website or contact them there. Some IL municipalities have their own sales tax rates for cars, and they’re usually lower than the sales tax for other tangible items.
For instance, Champaign is normally 9% sales tax, but it’s 6.25% for cars:
Thank you everybody for replies. At least I am assured that dealer will not pocket these taxes.
I am in Deerfield 60015 which has a tax rate of 7% based on Illinois Tax website
One pays are tough because I’m not exactly sure how the taxes are calculated.
I would imagine there’s one proper way to calculate taxes in a one pay scenario (I’ve used Ethans Bolts as most examples), However I’ve seen taxes calculated in at least one of two ways:
Also, my program has you at 8% tax, which gets very close to the ~1450 tax amount. Again, Tax calculations are based on whatever desking software that dealer uses. They should be right, but are not always, especially in complicated tax areas.
In either case, they would (should) refund you the difference in whats actually billed by the state
I emailed the finance manager at the dealership to see if he can give me a break down. Thank you for assuring that any excess taxes will be refunded.
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