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How do taxes work for A/X/Z Plan Purchases?

Taxes in Illinois, Indiana and many surrounding states
In most states the consumer pays tax on the purchase or lease of the vehicle before rebates.  Much like when shopping at a grocery store, your rebates or coupons will be deducted at the end of the transaction.   After the tax is calculated the rebates then are taken off, giving you a final cash price or amount financed.  The plan discounts are no exception. The states of Illinois, Indiana, Wisconsin, and many others deduct the plan incentives AFTER all taxes are calculated.  Please look at the below example:

John buys a 2010 Ford Taurus with a $1500 dollar rebate AND he’s eligible for A-Plan. He has saved up $1000 to use as a down payment and has no trade in. Here’s how the transaction would work (I use even numbers for example purposes):

MSRP of 2010 Ford Taurus SE-



A-Plan price of Taurus SE-



A-Plan discount-


(the monetary benefit. It is typically close to the invoice price minus the A-Plan price)

Rebate of:




So, If someone asks John what he paid for the Taurus what would he say?
A-Plan price of $25,500 minus $1500 dollar rebate = $24,000 + taxes and fees

What would his “out-the-door” number be? Also called total amount financed?

A-Plan Price                                                                                                     


add in a-plan discount (this is how the tax is calculated)               


add in doc fee (Illinois dealers can charge $75 or $154.37 for non-plan buyers)


This is the taxable amount-


Taxes at roughly 8%  (If you live in Indiana they will be lower)       


Doc fee  (this fee was calculated for taxes but wasn’t added in yet)


New Plates




Total amount before A-plan discount, rebates & down payment-



You may look at the example and ask yourself “what kind of benefit is that?”  Please read on…

Here’s the fun part:

Taking the total from above of :


Subtract Plan Discount-


Subtract rebates of-


Subtract down payment of-




Now all you have to do is plug that into a payment calculator and “wholla”, you have yourself a payment. The only variable left is the rate.

Click here to submit an application and we can pin point it exactly and within a few hours you can be driving your NEW VEHICLE!