here’s my situation:

after 3 years of working I’m returning to school. I’ll be doing prereqs for grad school, then grad school in a year in a half. before i get into grad school i’m living with my parents.

my dad is a wealthy physician who has always been very stingy with his money. he accused his 4 kids of being spoiled because we would go out to eat (he chose the restaurant, he paid), go on family vacations (he chose the venue, he paid), and experience other things he didn’t get to with his blue-collar upbringing.

I have grown up to be very frugal and have always lived far below my means. As a result I have quite a bit of money in my savings account that I had been socking away just for my planned return to school. Even with my savings money, I’m still pursuing loan options since I’m going into healthcare and most employers (and even the government) have programs that pay off loans if you work for them for a set period of time.

I have not owned a car for the past 3 years since I didn’t live in an area that required it, but need to buy one now when I move back to my hometown. I found and researched several online, and he helped me out by checking them out in person (helpful because I would have taken him anyhow to car shop . . . I’m clueless about them . . . and he is not a doctor who drives a Porsche, he drives a 10 year old Chevrolet Blazer). We decided on one on Monday, and he bought it (both because he test-drove it and also for insurance reasons, since I’ll be living in their house).

Here’s the dilemma:

I have enough money to pay him back in full, have money to pay for gas and insurance and repairs, and have a general “savings cushion”. He does not know this.

He has proposed a 5-year re-payment plan at 5% where I would pay him $200/month for the next 60 months. Nice idea, if I needed it. But over the long haul that will cost me $1,500 more than if I pay for the car today.

Being the frugal person I am, I want to pay it off right now, both so that it is fully “mine” and also to save myself $1,500 over the long haul. My only hesitation is that he will be taken aback by my ability to pay it off and wonder what other money I’ve been hiding under the mattress.

ps – I cannot tell him I received more loan money than I thought I would b/c he co-signed on my school loans and know the amount I got.