The price on the windshield is only part of what you'll pay for a used car. In Illinois, taxes and fees can add a meaningful amount to the total. Here's what to expect, so the out-the-door number doesn't catch you off guard.
Buying from a dealer vs. a private seller
How you're taxed depends on who you buy from.
- From a dealer: You pay sales tax on the purchase, and the dealer collects it and handles the paperwork with the state.
- From a private seller: You pay the Private Party Vehicle Use Tax yourself when you title the car with the Secretary of State, using Form RUT-50.
Sales tax when buying from a dealer
Illinois charges a state rate of 6.25% on vehicle purchases from a dealer, plus any local taxes where you live. Depending on your city and county, including Regional Transportation Authority taxes in the Chicago area, your combined rate can be noticeably higher than the state rate alone.
The trade-in credit
If you trade in a vehicle, its value is generally subtracted from the taxable price of the car you buy. That means you pay tax on the difference, not the full price. There's no cap: Illinois removed its former $10,000 limit on January 1, 2022, so your trade-in's full value counts. Leased vehicles are the exception. See our trade-in vs. private sale guide for an example.
Private Party Vehicle Use Tax
When you buy from another person rather than a dealer, Illinois charges a use tax instead of sales tax. You pay it when you apply for title. The amount depends on the vehicle's purchase price and model year, according to schedules published by the Illinois Department of Revenue.
Title and registration fees
Every vehicle needs to be titled in your name and registered for plates. These fees are set by the Illinois Secretary of State.
- Title fee: a one-time fee to put the title in your name.
- Registration: an annual fee for your plates and sticker. You can often transfer plates from a car you sold or traded.
When you buy from a dealer, the dealer typically submits the title and registration paperwork electronically for you, and the state's fees are part of your out-the-door total.
The dealer documentation fee
Dealers charge a documentation fee to prepare and process the paperwork for your purchase. Illinois caps how much dealers can charge and adjusts that cap each year.
At Carselect, every vehicle page lists the price, the documentation fee, and the electronic filing fee, so you can see the advertised total before you visit. The vehicle page explains what each fee covers.
| Cost | Who sets it | When you pay it |
|---|---|---|
| Sales tax (dealer purchase) | Illinois 6.25% plus local taxes where you live | At purchase, collected by the dealer |
| Private Party Vehicle Use Tax | Illinois Department of Revenue (Form RUT-50) | When you title a car bought from a private seller |
| Title fee | Illinois Secretary of State | Once, when the title is put in your name |
| Registration | Illinois Secretary of State | Every year, for your plates and sticker |
| Dealer documentation fee | The dealer, up to a yearly maximum set by Illinois | At purchase |
| Trade-in credit | Full trade-in value comes off the taxable price (no cap since 2022; leases excluded) | At purchase |
A simple example
Here's how the pieces fit together for a hypothetical $18,000 car bought from a dealer with a $5,000 trade-in. The local tax rate is a placeholder, not a quote.
- Vehicle price: $18,000
- Minus trade-in value: $5,000
- Taxable amount: $13,000
- Sales tax at a combined rate of, say, 8%: about $1,040
- Plus dealer documentation and filing fees
- Plus state title and registration fees
The tax savings from the trade-in in this example is about $400 compared with paying tax on the full price.
Don't forget insurance
You need proof of insurance to drive off the lot and to register the car. Get a quote before you buy, since rates vary by vehicle.
Bring these when you buy
- Your driver's license
- Proof of insurance
- Your trade-in's title, or your lender information if you still owe on it
- Your current plate number if you're transferring plates
- Your down payment