Economics of Repairs vs a Newer Car

[mechguy]

It comes down to rust. If its rust free, go ahead, if its starting, start holding back and considering other less rusty options.

I agree and it's starting to rust. It could still live for a while but will continue to get uglier. Doing even the simplest economic analysis with these details: 3 year term, don't care about interest rates.
Old car: $1000 repairs per year, $4000 current value, end of three year value = $2500
Newer 2007/08 Grand prix: $8000 purchase cost, $500 year in repairs, salvage at year three for $5000.
NPV Old Car = -500
NPV Newer = -500

So approximately even.....