Loan from a family member. Suggestions please

Adamc
Adamc Posts: 440 Forumite
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in Loans
Hi

My father has offered to sell me his car but I will be paying it off monthly. Is there anyway he can guarantee his return in the event of tragedy or is he undertaking this at his own risk? The alternative is to pay more to get less at the dealers + interest on the finance package.

I am planning to get life insurance as I am buying a new home if that is of any relevance.

Apologies if this is a bit of a daft or morbid question.
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Comments

  • dresdendave
    dresdendave Posts: 889 Forumite
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    Couldn't you just get a bank loan and then pay your father for the car?

    He's got his money and you now make monthly payments to the bank rather than him.
  • pramsay13
    pramsay13 Posts: 1,950 Forumite
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    It's possible to guarantee the return in the event of your demise, but depending on the amounts we are talking it might not be worth it.
    If you make it clear to him in writing that you are borrowing money from him and paying it back at xx amount per month if anything was to happen he could use that to make a claim on your estate.
  • photome
    photome Posts: 16,362 Forumite
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    I did the same with my son.

    The thought of his demise before he paid me back never enterd my head,

    If the worst had happened the last thing on my mind would be getting my money back
  • sourcrates
    sourcrates Posts: 28,876 Ambassador
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    I should imagine he would just take back the car in that event, because until you finish paying for it, its still his anyway.
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  • TrickyDicky101
    TrickyDicky101 Posts: 3,513 Forumite
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    How much is the car?
  • Adamc
    Adamc Posts: 440 Forumite
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    edited 26 May 2018 at 9:55AM
    TrickyDicky101 wrote: »
    How much is the car?

    £14000. Selling at trade-in price.
  • Adamc
    Adamc Posts: 440 Forumite
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    dresdendave wrote: »
    Couldn't you just get a bank loan and then pay your father for the car?

    He's got his money and you now make monthly payments to the bank rather than him.

    Trying to avoid all interest charges if possible as I'm buying my first house and money will likely be tight.
  • Adamc
    Adamc Posts: 440 Forumite
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    photome wrote: »
    I did the same with my son.

    The thought of his demise before he paid me back never enterd my head,

    If the worst had happened the last thing on my mind would be getting my money back

    I know what you mean. I just don't want to leave my parents struggling as they don't really have a lot to spare and are coming up for retirement.
  • BrassicWoman
    BrassicWoman Posts: 3,202 Forumite
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    Adamc wrote: »
    I know what you mean. I just don't want to leave my parents struggling as they don't really have a lot to spare and are coming up for retirement.


    a) will you be declaring this debt on your mortgage application? (fraud if not)
    b) if parents are struggling just give them the money; or realise you cannot actually afford the car....
    2021 GC £1365.71/ £2400
  • robber2
    robber2 Posts: 558 Forumite
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    edited 29 May 2018 at 2:28PM
    I'd suggest your father sells the car (£16-£18K) and keeps the money to see him through retirement. He can gift you the extra cash that hes made in the deal (£2 to £4k) with which you can buy a perfectly decent car you can actually afford to have and run.



    Regards


    Rob
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