How to Choose Between Leasing or Buying a Car in Houston

lease-vs-buyIf you live in Houston and don’t have a car yet, you are probably thinking about getting one as soon as possible, as sometimes the public transportation systems doesn’t cover all possible areas, doesn’t work at late hours and if you have to commute to a nearby area or send the kid to school there, a car becomes more than a whim, but a necessity. People who had to move to Houston for limited amounts of time, such as an year or two, usually opted for leasing a car and leave it behind after their staying was over, but for residents, the pros and cons of leasing or buying a car in Houston seem to add up in a pile and not everybody is certain that one way is better than the other. Today we will take a look over at what to choose and how to choose between leasing or buying a car in Houston, talking about the involved factors and the range of advantages and disadvantages of each choice.

Why do some people buy their cars and some lease their cars? One of the first issues that needs to be pointed out is that leasing a car is a good choice for people who don’t have the money for a solid downpayment in order to buy a car, as it is well known that the first leasing investment usually consists in the first month’s payment, the tax and registration fees, and  the refundable security deposit. However, you should be aware that there is something called “capitalized cost deduction” and it sounds terrific on paper, if you are to believe the commercials, but be careful with contracting such lease, it is requires a huge downpayment. And if you have that kind of money to spend on a lease, you can very well change your mind and purchase the vehicle.

Another financial factor that inclined the balance towards the lease is your entrepreneurial status: if you are a business owner or an independent entrepreneur, your lease payments are deductible from your taxable income, provided you use the car only for business.

Car insurance is mandatory in Houston, so no matter how you drive it, standard insurance is what you need, as you still have to repair and maintain the car and be covered for all sorts of troubles. However, when you lease a car, you should pay attention to your insurance policy and make sure you have your back covered in case the car gets stolen or is declared a total loss after an accident. When checking your Houston car insurance options, make sure you ask your insurer about gap insurance, for the worse case scenario.

Before jumping in at the perspective that you can lease a car with little per – month money and be cool enough to change it with a new one in an year or two, make sure you have your leasing company give you all the gory details about how much your lease will really cost: type of lease, fess and taxes, capitalization, residual costs, excess wear and tear fees, extra mileage fees, early termination fees, inflated capitalized costs and disposition fees, standard car insurance and gap insurance. It’s not the monthly cost of a lease that is important, but the total costs that sometimes may challenge the costs of buying a car. While leasing has some obvious financial benefits, when deciding between leasing or buying a car in Houston, you should know first how much are you going to drive, how long do you intend to keep the car and how well you can make the vehicle work for you if you’re using it for entrepreneurial purposes.