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This post is in response to a contest being run over at DebtKid. He wants you to share your dumbest purchase for a chance to win his dumbest purchase, a Nintendo DS Lite. Be sure to leave a comment on his blog for 1 entry. If you have a personal finance blog and write a post about your dumbest purchase, you get 25 entries. You will have until March 18th to share your story.

Time to Come Clean

My dumbest purchase, among dumb purchases, was succumbing to a door-to-door salesperson about home siding. This was a few years ago, before I got serious about getting out of debt. Let me set the stage.

I live in a middle-upper class housing subdivision. It's not tract housing, but the entire neighborhood was built by the same contracting company. So, they performed what is commonly known as a 'drive-by painting' of all the houses

Drive-By Painting

A sub-standard paint job that was put on solely to make the house presentable for sale. Usually these paint jobs have to be replaced/re-painted earlier than a good paint job, as they start to 'bleed into' the wood and start looking horrible.

It was about 5 years after the house was built, and the outside of all the houses were starting to show the effects of the paint job. That was about the time that the siding sales people started scouring the neighborhood.

Not really knowing any better (having bought the house only a couple of years before) we were talked into buying vinyl siding for the entire house.

The siding itself wasn't that bad, but looking back, the quality of the work left a lot to be desired. It's weathered over the last decade pretty well, but compared to some of the siding that has been put up on houses around us, it's definitely an inferior construction job.

Now for the Stupid Part

What makes this the most stupid purchase I've made (to date) are three things.

1) No Research Performed - I didn't do a whit of research on siding. Not one bit. No library, Internet, asking around, nothing! They could have put up wallpaper on the outside of the house for all I knew from siding.

They had a great sales pitch, explaining about underlayering and the strength and durability of the product, etc, etc. So I didn't do basic research on cost, quality, expected lifetime of the product, problems to expect, or anything else you would do some sleuthing on. And for nearly $20,000, research should have been MANDATORY.

2) No Reference Checks - When hiring workers, especially construction teams, it's VITALLY important to find out what kind of people will be working on the house. The best way to find this out is to speak to former customers. The horror stories you hear about construction teams causing more damage than they fix are all too common to forget this step. I've had personal family experience where construction teams have walked off the job halfway through the job because of 'cost increases' that they force on the homeowners. Make sure you're dealing with a reputable group.

3) Financed it All - Since this was a HUGE expenditure, of course they offered financing. What got me was I didn't read all the fine print and understand exactly what I was getting into.

• 14% interest financing - Not the highest interest rate I had at the time, but up there.
• 2nd Mortgage - Found this out YEARS later that they had used the house as collateral on the loan. I was under the impression that it was a signature loan, with no collateral. Found this out the HARD way when I went to re-finance the home when mortgage rates dropped. I had to roll both 1st and 2nd into a new loan to get new financing.

One Smart Thing

The one smart thing i did do though, was to refuse the credit insurance.

Credit Insurance

Insurance offered to cover the contingency where you can't make the payments on your regular bill. One of the BIGGEST ripoff insurances out on the market today. The average percentage of people that have to take advantage of the insurance is so miniscule that it's almost pure profit for the company offering it.

They had rolled the credit insurance INTO THE FINANCED PRICE OF THE SIDING!!! That means that we would have been paying for the siding, AND paying interest on the financed TOTAL price of the insurance for the life of the contract.

I made them take the contract and get that stricken. Strangely enough, they had a copy of the contract already ready without the credit insurance out in the truck. Go figure.

In the End

I don't necessarily regret getting the siding, what I regret is the way I got it and the end-result of the installation. I could have purchased equivalent or better siding, and had it installed by much better installers if I had done my research and been more patient.

For a purchase this large, being patient is an absolute necessity. Buyers' remorse in the 5-digit range isn't something you want to have.

Bad Decisions from the M-Network:
The Dumbest Purchase I Ever Made @ SingleGuyMoney
The Dumbest Purchase We Ever Made @ beingfrugal.net
What Was Your Dumbest Purchase Ever @ CashMoneyLife
Dumbest Purchase Ever @ Gather Little by Little
My Dumbest Purchase Ever - It's a Mindset @ PaidTwice
My Dumbest Purchase Ever and Lessons Learned @ Moolanomy
Possibly My Wisest Purchase Ever @ Mrs Micah

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