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Just a lease, but in Illinois it’s complicated

Shopping electric vehicles can be like dating: They look and sound great. You get charged up. But you don’t know enough to commit to a relationship.

The lure of buying a green, gas-free electric vehicle leads to worries about the long term. Maybe there will be breakthroughs in batteries or driving range, and you’ll feel like moving on.

That is why car manufacturers push 36-month leases for EVs: Offering a shorter commitment reduces the financial risks and gives consumers the option to just walk away after three years.

The lease deals are enticing: $299 per month for a Chevrolet Volt, $199 a month for a Nissan Leaf. But Illinois’ leasing and tax laws limit the cost benefits. In Illinois, about 10 percent of new vehicles are leased compared to more than 20 percent nationally.

Illinois law discourages leasing in general. First, most states charge sales tax only on the monthly lease payments. Illinois charges sales tax on the full capitalized cost — basically, the equivalent of a “purchase” price for a leased vehicle.

Ford has been offering a 36-month lease on the Focus Electric for $285 per month with $930 due upfront. That does not include the title, “doc” or registration fees or the sales tax on the $29,245 capitalized cost. In areas where the tax is 9 percent, that adds $2,632 to the tab (roughly $73 per month).
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