The mathematical skills of the American population are, for the most part, pretty poor. Dealerships and lenders will often use this as an opportunity to take advantage of people, but sometimes the opposite happens when someone with bad math skills walks away from a good deal because they don’t understand how the numbers work.

We have covered many instances of car buyers who get themselves into bad financial situations because they lack the diligence and/or the ability to calculate the total cost of a loan or lease correctly. However, I’ve also encountered an alarming number of folks that swore they were getting a raw deal simply because they couldn’t wrap their head around how the numbers worked out.

The first instance came from an email conversation I had with someone who didn’t end up buying a Nissan Maxima because they thought the dealer was ripping them off on their trade. Here is how it went down: the car he was buying had a retail price of about \$38,000. The discounted price was \$32,000. His trade was valued at \$10,000 but the loan balance on his current car was \$14,000. The dealer presented the deal as \$32,000 +\$14,000 = \$46,000. Then subtracted their \$10,000 offer with a remainder of \$36,000. For some reason, this person thought that the dealer should have subtracted the \$10,000 from the \$32,000 then added the \$4,000 back in for a total of \$26,000. I simply could not convince him that the even though he is buying a car for \$32,000 he still has a car with a balance of \$14,000 and that needs to be totaled together before any credits were applied. He was adamant that the dealer was screwing him out of his \$10,000 trade offer.

Within the same week, I had another back and forth with a young man buying a hot hatchback. He told me that his local dealership offered him a bad price because the payments were too high. After he sent me the quote, I saw that the \$5,000 discount on the car was pretty reasonable but even after he factored in the equity on his trade the payments were still about \$80 per month higher than his target. But the issue here was not with the dealership, the issue was this person simply cannot afford the car he wants.