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mejms
Joined: 04 Jan 2010
Posts: 390
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 Posted: Tue Jun 08, 2010 10:22 pm Post subject: Big Cars, Small Houses |
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I live in a gated condominium complex. I rent. The houses are small and modest, infonavit style houses. It's comfortable enough and the area is kept clean. I drive a Pointer.
I've seen BMWs and Hummers coming out of the same neighborhood. I saw one women with a convertible, two seater BMW. I also saw that she lives in the same style house as me-- two bedrooms, one bathroom, and a value of about $500,000 pesos.
In fact, I've been in several houses where the house was either small, large and unfinished (no floor, in need of paint work, etc), or really lacking furniture. All the same, the owners of the house had either BMWs, Hondas, or Hummers.
No doubt a lot of people all over the world are mostly interested in appearances. But has anyone else noticed that having a disproportionately expensive car is the mode in Mexico? After the discussion about pricey schools with no real structure and a lot of appearances, I considered this other aspect of Mexican culture.
It also has occurred to me that maybe people buy brand new cars because they can pay month to month rather than a used car where you need the cold, hard cash. Savings and always having money on hand are not common concepts in Mexico. Then, when they're at the agency, people just opt for the nicer car for a couple thousand pesos more per month. What do you think? |
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jaimem-g
Joined: 21 May 2010
Posts: 85
Location: The Desert, CA
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| Posted: Wed Jun 09, 2010 12:39 am Post subject: Maybe more the generation |
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This almost sounds like the 30-40 generation in California - except in CA they would have gone for the expensive house, too, up until 2008.
Which brings me to a broader question: How is the general economy faring in different regions in Mexico? How has this affected all of you English teachers?
I know tourism is down everywhere and I hear all of you long time residents complaining about the 13 to 1 exchange rate but this only gives us outsiders a partial picture. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Wed Jun 09, 2010 1:37 am Post subject: |
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Who needs a home? If you have a BMW or a Hummer, you ALWAYS have a place to sleep.  |
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jaimem-g
Joined: 21 May 2010
Posts: 85
Location: The Desert, CA
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| Posted: Wed Jun 09, 2010 5:25 am Post subject: |
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| Not the Z4. |
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jaimem-g
Joined: 21 May 2010
Posts: 85
Location: The Desert, CA
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| Posted: Wed Jun 09, 2010 5:26 am Post subject: |
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| Not the Z4. Well maybe. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Wed Jun 09, 2010 2:29 pm Post subject: |
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| Quote: |
| It also has occurred to me that maybe people buy brand new cars because they can pay month to month rather than a used car where you need the cold, hard cash. Savings and always having money on hand are not common concepts in Mexico. Then, when they're at the agency, people just opt for the nicer car for a couple thousand pesos more per month. What do you think? |
I think you're right on this, for new cars in general. Buying new usually also gives you insurance and gets you around the more restrictive aspects of the air care regime in place, at least in Mexico City.
I disagree on the idea of savings not being common though. I think with less disposable income, people are more diligent savers here. |
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Phil_K
Joined: 25 Jan 2007
Posts: 2041
Location: A World of my Own
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| Posted: Wed Jun 09, 2010 3:15 pm Post subject: |
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Have to agree with the OP. A few years ago we bought an apartment for the mother-in-law in Col. Guerrero  , around $380K tops, if I remember. A quick glance around the parking and there are many cars costing more than that. My car cost less new than the down-payment on our apartment! |
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mejms
Joined: 04 Jan 2010
Posts: 390
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| Posted: Wed Jun 09, 2010 4:41 pm Post subject: |
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| Quote: |
| Have to agree with the OP. A few years ago we bought an apartment for the mother-in-law in Col. Guerrero , around $380K tops, if I remember. A quick glance around the parking and there are many cars costing more than that. My car cost less new than the down-payment on our apartment! |
Can you think of any reason why?
I've got some ideas.
1) One thing I've noticed in my time here is that people really don't invest in their properties. I've seen little areas outside that could be a beautiful garden and the owners of the home just use the area as a junk heap.
2) The idea of working and being "a self-made man" isn't a big part of the culture here as it is in the US. People who have money often have it because their parents had some and the parents of their parents had some and so on. It's largely old money down here. Some people make their fortunes grow, some don't, but very, very few come to have something from nothing.
3) People who live in not-so-great areas and have expensive cars want to a) impress and b) enjoy a nice car because they don't imagine they'll have the money to invest in a nice house.
Guy, I haven't seen much saving. I see people, some with no money and some with some, who one week will take a vacation to Acapulco and the next week not have money to pay the cable bill. As is so many facets of life, Mexicans are not organized. That can be frustrating for me, but then again organization isn't the be all and end all of life. |
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dixie
Joined: 23 Apr 2006
Posts: 644
Location: D.F
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| Posted: Wed Jun 09, 2010 4:50 pm Post subject: |
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| Guy Courchesne wrote: |
I disagree on the idea of savings not being common though. I think with less disposable income, people are more diligent savers here. |
I disagree but it's not just Mexicans... |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Wed Jun 09, 2010 4:52 pm Post subject: |
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| Quote: |
| 3) People who live in not-so-great areas and have expensive cars want to a) impress and b) enjoy a nice car because they don't imagine they'll have the money to invest in a nice house. |
Maybe b...credit for home purchases is difficult in Mexico, with high interest rates and down payment, compared to the US anyway. Cars have a much lower threshhold to get credit.
Mexico City seems to have a strong culture of the car too. I wonder what the repo rate is on cars here? |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Wed Jun 09, 2010 4:54 pm Post subject: |
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| dixie wrote: |
| Guy Courchesne wrote: |
I disagree on the idea of savings not being common though. I think with less disposable income, people are more diligent savers here. |
I disagree but it's not just Mexicans... |
wink wink?
Yes I'm a terrible saver.  |
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Phil_K
Joined: 25 Jan 2007
Posts: 2041
Location: A World of my Own
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| Posted: Wed Jun 09, 2010 5:01 pm Post subject: |
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| Quote: |
| Cars have a much lower threshhold to get credit. |
When I bought mine, which was 6 years ago now (time to change it!), I was disclosing $10000 of income, (and not too stable) and was authorized for up to $3000 of monthly payments. (Actually, the payments I made were a lot less). That's a pretty high percentage in my book. |
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Phil_K
Joined: 25 Jan 2007
Posts: 2041
Location: A World of my Own
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| Posted: Wed Jun 09, 2010 5:06 pm Post subject: |
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| Quote: |
| Maybe b...credit for home purchases is difficult in Mexico |
Absolutely true. If you are looking at a preventa on a new apartment development in D.F. right now (say, $1.6m), with minimum deposit, they are asking for around $30 - 40K income, or joint income. Obviously, things are bit easier if you have some equity in your current home, as happened to us. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Wed Jun 09, 2010 5:10 pm Post subject: |
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| Phil_K wrote: |
| Quote: |
| Cars have a much lower threshhold to get credit. |
When I bought mine, which was 6 years ago now (time to change it!), I was disclosing $10000 of income, (and not too stable) and was authorized for up to $3000 of monthly payments. (Actually, the payments I made were a lot less). That's a pretty high percentage in my book. |
But a lot less in real terms than a mortgage. Dealing with a bank (and not Infonavit), you need 20% for a downpayment as well as a slew of initial fees. Then you get around 10% ona mortgage rate.
Many new cars can be driven off the lot for 5%...I don't know what going rates are though on the credit.
What do you mean 'up to' $3000 pesos? What was the lowest number of the range you were given? |
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Phil_K
Joined: 25 Jan 2007
Posts: 2041
Location: A World of my Own
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| Posted: Wed Jun 09, 2010 5:36 pm Post subject: |
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| Quote: |
| What do you mean 'up to' $3000 pesos? What was the lowest number of the range you were given? |
I mean my monthly loan repayments couldn't exceed $3000. |
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