How do you deal with a parent who is a bigot?

Unfortunately, given his age, it wouldn't be easy. You may be better off loving him for who his is and as your grandfather and accepting that his opinions are fairly well set and inelastic. Once people get into their older years, they get set into their routines, beliefs and opinions. I'm taking a Social Psychology class right now and studies have actually shown that, the older someone is, the more steadfast they are in their beliefs, they're less likely to be affected by the influence of another person.

I'm sorry that you have someone like this in your family, I can tell that it bothers you quite a bit.

Honestly, there's no easy way to deal with this. You can't change his mind nor can he change your mind. You should tell him you love him very much, but that you don't want to discuss race or non-white people with him because it frustrates you since your beliefs and ideas conflict and you don't want to argue with him. Hopefully, he'll agree and at least you won't have to be driven up the wall when the topic of non-whites comes up. Agreeing to disagree (and then to stop mentioning it) might help you with this.

Good luck.

bigot - a person who is utterly intolerant of any differing creed, belief, opinion, or ideology.

You call your grandfather a bigot, but are you being any better? After all, you are being intolerant of his beliefs or opinions. Wouldn’t that also make you a bigot? Why is it not enough for you to live and let live? Why must he conform to your way of thinking? This idea of multiculturalism and diversity is pushed on us as a society and if someone doesn't agree with that, they are demonized. How can someone who is preaching that we should be open and accepting of all people, ideas and lifestyles, then turn around and say someone is wrong for having certain beliefs??? Look, I have no problems with people being bigoted or not bigoted, but at least admit it to yourself. Don’t disguise your bigotry as righteousness.

you'll just have to accept that he was raised in a different time, and it's hard for people to break habits, especially lifelong ones.