Any salesman who’s been around for a while has run into the phenomenon known as Mexican Math. It occurs during that critical time of a deal when you get your first pencil from the desk, usually a monthly payment.
You go back to the customer, Mr. Garcia, a nice gentleman in a cowboy hat that has been pretty cooperative up until now. You sit at the desk, turn the write-up sheet around so that he can see the heavy black numbers which say: O.K. deal, $2000 down, $422 X 72 mos. O.A.C.
You then shut up and hope for the best.
Now if you’re dealing with any other nationality, one of two things is going to happen. The customer will either say okay, or “Are you crazy. I can’t afford that!” Now we all hope for the customer will say okay, and even if he doesn’t say okay you can probably deal with the second situation with little good ‘ol would-you-take.
But Mexican’s (and most other Hispanics) do something that no one else ever does. He slides the write-up closer, brings out a pen and starts to multiply $422 X 72 = $30384.
Your deal is now officially dead.
Now I got to hand it to them, because if you think about it, it’s probably not a bad ideal to figure out that the $21,000 loan has $9384 worth of interest. But it’s interesting that Caucasians almost never do this; they’re too anxious to get in their new chariot and drive away with the wind blowing in their hair.
Other nationalities are just thankful they can get financed.
Now I’ve tried all kinds of ways of overcoming Mexican Math. None of them have worked for me. Once they see what the car is actually costing them, you’re done! Mr. Garcia will never pay $9,384 worth of interest, but weirdly enough he might offer you $5000! Many a car man has gone home wounded, another victim of a Mexican who can multiply.
There is one way that works sometimes. It’s called zero percent financing. Sometimes Mexicans get so fixated by interest; they are more than willing to give up a rebate to get zero percent. But that means you have to sell a new car. Yeach!
I am currently in the sub-prime end of the car business, aka flakes. When dealing with a Mexican, once I determine they have some sort of driver’s license, I, too, have to deal with Mexican math. But in this situation I have the hammer. I can tell them to take it or leave it. They usually go for having the car.
My question is this: where do they learn this? Is there a special Mexican Math course they take at school, nuzzled in between Algebra and Geometry? Is it a skill handed down from generation to generation? Is there a secret canon in the Catholic Church in Mexico that commands them to do this?
Before go to that big used car lot in the sky, I would really, really like to know.
Talk to you later,
David
7 comments:
let's get it right, dude. It's HISPANIC MATH!
It's not just a Mexican thing. It's like the anonymous person above said: Hispanic math. I know people from Colombia, Venezuela, and a few other countries where corn and beans are a staple of the diet. I've been car shopping with them too and they all add it up.
I agree, the chariot awaits! for me but they are smarter. So smart in fact I have actually begun to do the same thing.....it's amazing the add-ons and surcharges and assorted doodads that make it onto a sales contract.......I've even heard of a Bulgarian or two who do the same thing.....
honestly i feel like ifs just another version of doing math but its just labeled as mexican math.
As a Mexican in an area with mostly Mexican or other Hispanics in car sales we have always referred to it as Mexican math it's what everyone understands
ways around mexican math is to explain amortization and get them confused that they are not figuring it out right. or explain the this loan has no ore-payment penalty so therefore they set the interest they pay. explain the payment the see is a “minimum payment” and they strive to pay more every month. anything over thr minimum payment goes to principal only. interest is charged every-month on remaining principal.. the faster they can lower the principal the less interest they pay thereby lowering the overall interest rate. by picking the longest term, should they have a month where there income is low they only have to make that smaller payment until income returns to normal and they can continue to pay more then that min payment. if they paid the loan off at the end of the first month they didn't pay any interest or very little
also, advise the client to make one payment for the min payment and then the next oaymebt to tell the bank to apply to “principal only” !! the bank do a snealy thing if you dont tell them 2 nd paymebt for the month is principal only and they apply the 2nd payment towards the next months payment. after a few month of doing it the bank will tell you “oh you don't have to make a payment the next however many months because you paid ahead. thats not doing you any favors because that way the bank is making sure they are getting all their interest. so its imperative you tell bank that extra monthly amount above the min is “principal only”
Does somebody say annything about the Ranchers Math? The old guy who comes with 15 grand cash and thinks he can buy a 21k car because he still thinks that cash doubles his purchase power!
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