Sunday, November 12, 2006

A Proposal

No... not that kind. Geez... I haven't even been on a date in over a year. This is what I'm going to propose to my dad at dinner tonight.

A. Buy his car for $4000. (It is a 99 Nissan Maxima SE that has a power sun roof, bose stereo system, leather seats, 145,000 miles in good condition and would be worth about $5500 according to the Kelly Blue Book value - he's already offered it to me for only $4000)
B. Have him loan me $5000 in order to pay off my last two credit cards.
C. I would pay him 7% interest (which is a little more than my bank's current interest rate on used automobiles and a little less on personal loans) plus the fee that his bank would charge to withdraw the $5000 from his account. (I believe he would have to tap into his CD and would have a small percentage penalty of a few hundred dollars)
D. I would make payments to my dad (withdrawn automatically every month) for 30 months starting on Jan. 25, 2007 continuing through June. 25, 2009 in the amount of approximately $325 a month. (give or take depending on what it will cost for him to get the money out of his bank)

Here's what this would do:
1. I would avoid going to my bank for a car loan on a very basic car that I would have to make payments on for at least six years around $275-300 AND still have a visa payment of $160 on a $4500 debt that would still not be paid off in six years because of the outrageous interest rate I'm being charged.
2. Although a brand new car would be nice, I really would rather wait until I can afford something that I don't mind making payments on for a long while instead of the cheapest thing I can afford at this point.
3. I would get both a pretty decent car and get rid of the visa payment for only $325 a month instead of about $485 a month with a new car and keeping my visa bill.
4. In 2 1/2 years, I would be debt free.
5. In 2 1/2 years, Josh's SSI runs out and that is how much I will have been shelling out for my two loans paying off my credit card debt and it won't be such a shock to lose that money.

What do you think? A good deal or not? He has the money and could give me the loan. This would be good for him because he would get regular payments of money that could help him out on other things and he'd no longer have to carry insurance on an extra car. We'll see how it goes.


Anonymous said...

Sounds like a good idea to me.

Susanlee said...

I think this is a great plan... I wish I had one like it.