Friday Financial Foul Ups: Buying a Car on the GM “Smart Buy Program” with a Balloon Payment at the End

This week’s Financial Foul up is written by Jason who blogs over at Redeeming Riches.  He is a financial planner by day and a blogger by night.  He ties his career, personal and faith experiences into his blogging to help Restore Your Money & Renew Your Mind.  Follow him on Twitter (@RedeemingRiches) or subscribe to his posts here.  Enjoy his foul up!

——–

During college, I took a part-time job that was flexible enough for me to work around my full load of classes.  The job paid decent money (at the time) and allowed me to afford books and have a little cash for play.

Unfortunately, I started thinking that the little bit of money I was making was enough to sustain a new car.

The Situation

My current car was getting older and approaching the 100,000 mile mark.  I rationalized that I should get rid of it and buy a brand new car so I wouldn’t have to worry about maintenance – even though mine was running fine.

So, here I was, 21 years old and wanting a new car on a part-time salary.

Where I Fouled Up

My first mistake was discontentment.  I had a perfectly fine-running car that could’ve gotten me to and from where I needed to go, but I just had to have a brand new one.  I wanted a sportier car with tinted windows and a sun-roof!  And I wasn’t about to let anything stop me.

My second mistake was when I walked into the dealer, sat down with the saleswoman after looking at a shiny, black Grand Am GT with a sun roof (the car I’d been wanting) and said these awful words:

I’d like to have a payment of $250 per month.

You should’ve seen the saleswoman’s eyes light up! She didn’t even have to ask and I walked right into her trap.  Don’t ever tell a salesperson what payment you want on a car.

“Oh, no problem – we can get you to $250 per month!”

The saleswoman went on to describe a “great new program” they have with me in mind.  It’s basically a lease, but you own it and you can sell it whenever you want or just turn it in for a new car at the end of four years.

“With your trade in, we can get you into this brand new car you’ve always wanted for $254 per month!  Let me tell you about the GM Smart Buy…”

Basically, this program was a way for me to buy a car I couldn’t afford and then after four years have a balloon payment. I had to come up with that amount, refinance for another four years or trade it in on another new car.

So, not only did I negotiate my trade-in at the same time as the new car (a big no-no), I allowed myself to be suckered into a deferment plan with a giant payment at the end! This is how they got the payment so low.

What I Learned

Four years went by, and sure enough the balloon payment was knocking on my door.  I had been in two accidents with this car (thankfully I didn’t get hurt or hurt anyone else) and the car was not worth what I owed.   I certainly didn’t want to refinance, but I didn’t know what to do.

Thankfully GM was struggling at the time and they came out with an incentive program.  Trade in your car for a brand new one and we’ll wipe out your Smart Buy!

So, I went online to find the cheapest GM possible, went to the dealer, didn’t negotiate payment, handed over my keys and purchased a new one.  I was out of the Smart Buy!!

I paid the new car off early and 136,000 miles later I’m still driving the same little car!

———-

Do you like this series? Check Out The Previous Foul Ups:

Foul Up #8 – David (Money Under 30) – Being Too Eager to “Move Out” and “Move Up”
Foul Up #7 – Matt (Debt Free Adventure) – Upside Down and Paying The Price
Foul Up #6 – Brian (MyNextBuck) – Overdue Books Prevent Me From Renting an Apt
Foul Up #5 – Kelly Whalen (The Centsible Life) – Poorly Planned Vehicle Purchase Costs $24,000
Foul Up #4 – Stephanie (Poorer Than You) – Signed My Life Away at Age 17
Foul Up #3 – Deliver Away Debt – How I Wasted Over $10K and 11 Months
Foul Up #2 – Brian (MyNextBuck) – Quick Fixes to Weight Loss
Foul Up #1 – Brian (MyNextBuck) – How I Didn’t Earn $3000 in Free Money

2,321 Responses to Friday Financial Foul Ups: Buying a Car on the GM “Smart Buy Program” with a Balloon Payment at the End
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    July 18, 2018 | 10:59 pm

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Trackback URL http://mynextbuck.com/friday-financial-foul-ups-buying-a-car-on-the-gm-smart-buy-program-with-a-balloon-payment-at-the-end/trackback/

Friday Financial Foul Ups: Buying a Car on the GM “Smart Buy Program” with a Balloon Payment at the End

This week’s Financial Foul up is written by Jason who blogs over at Redeeming Riches.  He is a financial planner by day and a blogger by night.  He ties his career, personal and faith experiences into his blogging to help Restore Your Money & Renew Your Mind.  Follow him on Twitter (@RedeemingRiches) or subscribe to his posts here.  Enjoy his foul up!

——–

During college, I took a part-time job that was flexible enough for me to work around my full load of classes.  The job paid decent money (at the time) and allowed me to afford books and have a little cash for play.

Unfortunately, I started thinking that the little bit of money I was making was enough to sustain a new car.

The Situation

My current car was getting older and approaching the 100,000 mile mark.  I rationalized that I should get rid of it and buy a brand new car so I wouldn’t have to worry about maintenance – even though mine was running fine.

So, here I was, 21 years old and wanting a new car on a part-time salary.

Where I Fouled Up

My first mistake was discontentment.  I had a perfectly fine-running car that could’ve gotten me to and from where I needed to go, but I just had to have a brand new one.  I wanted a sportier car with tinted windows and a sun-roof!  And I wasn’t about to let anything stop me.

My second mistake was when I walked into the dealer, sat down with the saleswoman after looking at a shiny, black Grand Am GT with a sun roof (the car I’d been wanting) and said these awful words:

I’d like to have a payment of $250 per month.

You should’ve seen the saleswoman’s eyes light up! She didn’t even have to ask and I walked right into her trap.  Don’t ever tell a salesperson what payment you want on a car.

“Oh, no problem – we can get you to $250 per month!”

The saleswoman went on to describe a “great new program” they have with me in mind.  It’s basically a lease, but you own it and you can sell it whenever you want or just turn it in for a new car at the end of four years.

“With your trade in, we can get you into this brand new car you’ve always wanted for $254 per month!  Let me tell you about the GM Smart Buy…”

Basically, this program was a way for me to buy a car I couldn’t afford and then after four years have a balloon payment. I had to come up with that amount, refinance for another four years or trade it in on another new car.

So, not only did I negotiate my trade-in at the same time as the new car (a big no-no), I allowed myself to be suckered into a deferment plan with a giant payment at the end! This is how they got the payment so low.

What I Learned

Four years went by, and sure enough the balloon payment was knocking on my door.  I had been in two accidents with this car (thankfully I didn’t get hurt or hurt anyone else) and the car was not worth what I owed.   I certainly didn’t want to refinance, but I didn’t know what to do.

Thankfully GM was struggling at the time and they came out with an incentive program.  Trade in your car for a brand new one and we’ll wipe out your Smart Buy!

So, I went online to find the cheapest GM possible, went to the dealer, didn’t negotiate payment, handed over my keys and purchased a new one.  I was out of the Smart Buy!!

I paid the new car off early and 136,000 miles later I’m still driving the same little car!

———-

Do you like this series? Check Out The Previous Foul Ups:

Foul Up #8 – David (Money Under 30) – Being Too Eager to “Move Out” and “Move Up”
Foul Up #7 – Matt (Debt Free Adventure) – Upside Down and Paying The Price
Foul Up #6 – Brian (MyNextBuck) – Overdue Books Prevent Me From Renting an Apt
Foul Up #5 – Kelly Whalen (The Centsible Life) – Poorly Planned Vehicle Purchase Costs $24,000
Foul Up #4 – Stephanie (Poorer Than You) – Signed My Life Away at Age 17
Foul Up #3 – Deliver Away Debt – How I Wasted Over $10K and 11 Months
Foul Up #2 – Brian (MyNextBuck) – Quick Fixes to Weight Loss
Foul Up #1 – Brian (MyNextBuck) – How I Didn’t Earn $3000 in Free Money

2,321 Responses to Friday Financial Foul Ups: Buying a Car on the GM “Smart Buy Program” with a Balloon Payment at the End
  1. Prosper Noah
    July 18, 2018 | 10:59 pm

    There is apparently a bunch to identify about this. I assume you made various good points in features also.

  2. Business Research
    July 19, 2018 | 12:21 am

    What i do not understood is actually how you’re no longer really much more neatly-liked than you might be right now. You are so intelligent. You understand therefore considerably relating to this matter, made me in my opinion consider it from a lot of various angles. Its like men and women aren’t involved until it is something to accomplish with Lady gaga! Your own stuffs nice. At all times care for it up!

  3. Alhouriya TV
    July 19, 2018 | 4:18 am

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  4. 55 printing
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  5. cheap postcard printing
    July 19, 2018 | 6:10 am

    Have you ever considered about includong a little bit
    more than just your articles? I mean, what you say iss valuable and
    everything. However think of iif you added some great graphics or video
    clips to give your posts more, “pop”! Your content is excellent but with images and clips, this blog could
    certainly be one of the very best in its niche.

    Amazing blog!

    Here is my site cheap postcard printing

  6. https://Www.55printing.com
    July 19, 2018 | 6:24 am

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  7. womens cargo crop pants
    July 19, 2018 | 7:00 am

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  8. www.rsgoldstop.com
    July 19, 2018 | 10:17 am

    I truly appreciate this post. I have been looking all over for this! Thank goodness I found it on Google. You have made my day! Thank you again..

  9. Ernestine Fuquay
    July 19, 2018 | 12:28 pm

    It as fantastic that you are getting ideas from this paragraph as well as from our dialogue made here.

  10. to learn more
    July 19, 2018 | 12:56 pm

    You, my friend, ROCK! I found just the information I already searched all over the place and just could not locate it. What a perfect website.

  11. shoes
    July 19, 2018 | 2:43 pm

    Very well written information. It will be valuable to anybody who usess it, as well as me. Keep doing what you are doing – can’r wait to read more posts.

  12. this website
    July 19, 2018 | 3:34 pm

    Some truly nice stuff on this website , I it.

  13. battery recycling newbury
    July 19, 2018 | 3:39 pm

    One thing is that one of the most frequent incentives for using your card is a cash-back or rebate present. Generally, you’re going to get 1-5% back in various purchases. Depending on the credit cards, you may get 1% again on most buying, and 5% back on expenses made using convenience stores, gasoline stations, grocery stores along with ‘member merchants’.

  14. recycle ups batteries newbury
    July 19, 2018 | 4:23 pm

    Thanks for the strategies presented. One thing I additionally believe is that often credit cards supplying a 0% rate often lure consumers along with zero interest, instant endorsement and easy on-line balance transfers, nonetheless beware of the top factor that can void that 0% easy street annual percentage rate and throw one out into the poor house in no time.

  15. digital music news
    July 19, 2018 | 4:51 pm

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  16. Sake vảy vàng 1.8 l tphc
    July 19, 2018 | 6:12 pm

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  17. thiết kế nhà phố
    July 19, 2018 | 8:51 pm

    Thanks so much for the blog post.Much thanks again. Awesome.

  18. digital marketing
    July 19, 2018 | 11:32 pm

    If you dont mind, where do you host your blog? I am searching for a very good web host and your webpage seams to be extremely fast and up all the time

  19. #healthy
    July 20, 2018 | 2:11 am

    Wow! This could be one particular of the most useful blogs We have ever arrive across on this subject. Actually Great. I am also a specialist in this topic so I can understand your hard work.

  20. battery recycling thatcham
    July 20, 2018 | 3:22 am

    Thanks for these guidelines. One thing I additionally believe is that often credit cards supplying a 0% interest rate often attract consumers with zero rate, instant authorization and easy on the net balance transfers, nevertheless beware of the most recognized factor that will certainly void the 0% easy streets annual percentage rate and to throw one out into the poor house rapid.

  21. SEO
    July 20, 2018 | 4:52 am

    Very creative, one of the nicer sites I have seen today. Keep up the great work.

Leave a Reply


Wanting to leave an <em>phasis on your comment?

Trackback URL http://mynextbuck.com/friday-financial-foul-ups-buying-a-car-on-the-gm-smart-buy-program-with-a-balloon-payment-at-the-end/trackback/