IL cost to lease cars might go down

Apr 21, 2014

The cost of leasing an automobile in Illinois should be going down. At least, that's what's supposed to happen under legislation the governor signed into law Monday. 

When you lease a car, there's a good chance you're paying tax on the full cost of the vehicle. There's also a good chance the company is not passing that full tax payment on to the state, because of a complicated system of dealer credits.

The Illinois Automobile Dealers Association says the bottom line is: customers are paying more for leases, and that's hurting business. The group's Joe McMahon says while leasing accounts for a quarter of transactions elsewhere, in Illinois, it's only ten percent.

"With rising prices of vehicles, there's a big segment out there who make their vehicle decisions based on monthly payment. That's why we think we're lagging behind -- because of the tax."

The new law makes it so customers will only be taxed on monthly payments -- not the full cost of the car. The dealers say on a lease of a $32,000 vehicle, payments could be lowered by $60 a month.