Ok... I'm out. I'm in. I'm out. I'm back in....
There is a little glimmer of light at the end of the tunnel.
I got back from lunch today, and the service advisor who wrote up the car told me to call the lady that she was now willing to negotiate the price of the car because she is done with it. The repair estimate of nearly $7k was more than she could afford.
So I called her after I got off work. She's not completely convinced we are being honest about the repair estimate because she still feels it is in GREAT shape. So she is going to come by Wednesday and I will walk her around the car showing her what the techs found.
She says she is now willing to negotiate the price of the car, but she's not going to "just give it away".
I personally think that since the engine is good, the transmission is potentially good (how bad can it be with only 53k miles), the interior is good (after it gets cleaned), and for the most part the body is good that it should be worth at least $750.
I can do most of the work myself (core support, suspension bushings, vacuum lines, turbo cleaning) so that will save a lot of money. Hopefully a cleaning will free the turbo and not require a complete replacement.
So I'll know on Wednesday wether I am buying it or not.