THE NEW 2020 ILLINOIS TRADE-IN TAX IN SCHAUMBURG, IL

BEAT THE CLOCK TO GET THE BEST PRICE FOR YOUR TRADE-IN BEFORE JANUARY 1st, 2020
WHAT IS THE NEW TRADE-IN TAX?
A new Illinois law becomes effective on January 1st, 2020 that eliminates the tax benefit of trading in your vehicle.

WHAT DOES THIS MEAN?
Illinois currently collects no sales tax on the car's trade-in value. Your car will currently act as an untaxed credit towards your new vehicle purchase. Starting January 1st 2020, sales tax will be charged on trade-in value over $10,000.

Before January 1st, 2020
After January 1st, 2020

 New Car Price $65,000 New Car Price $65,000
 Your Current Vehicle Value $38,000 Your Current Vehicle Value $38,000
 Trade-In Tax Credit $38,000 Trade-In Tax Credit $10,000
 Taxable Amount $27,000 Taxable Amount $55,000
 Tax Paid $2,430 Tax Paid $4,950
 Total Cost $29,430 Total Cost $31,950
 
For instance, if you are trading-in a vehicle valued at $38,000 before January 1st 2020 for a new vehicle valued $65,000, you will receive a credit worth your current vehicle value, and only be taxed on the difference.

At the start of the new year, you will only receive a trade-in credit of $10,000, instead of the value of your vehicle making the taxable amount of your vehicle $28,000, plus you will still be paying tax on the cost of your trade ($27,000), making the total taxable amount $55,000.

WHEN SHOULD I TRADE-IN?
If you are considering trading-in your vehicle, you should do so before January 1st, 2020. Ideally, you should begin the trade-in process as soon as possible, to make sure you have time to evaluate your options and find a vehicle that is a good fit for you.

You can get the best estimated value for your vehicle right now at Patrick BMW.

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