Someone on the Mopar board posted this: I told him I'd post it here to get more expert opinion. This is what he followed up with: If someone is able to help with his query from the information given, I'm sure he'd appreciate it.
Taking the OP's description, it's probably #3+ condition with a book value in the $8-10K range. But with no AC, only basic options and a green exterior it's going to be hard to find a buyer in that price range IMO. If he buys it at $8K I would say he's well on the generous side of fair.
I'm no expert, but I do surf a lot of Craigslist. Seems like even a decent 2 door LeSabre of the same vintage sits around and doesn't sell at anything above $5-6000. I'd say if it's really, really nice he'd be more than fair giving his Dad 5k. It's probably a 2.5-4k car selling to someone else.
Not a great idea to raid your 401K to purchase a toy. Any fiduciary financial adviser will tell you that.