As far as expending the time and $ to repair Larry's car, it still probably beats the alternative. The car with a nonfunctioning engine is worth maybe $400 to 500, or less. But a functioning car is worth about $2000. Will Larry expend $1500 in time and $ to repair it...depends on how much he figures his time is worth. If it's like a hobby, then zero is his labor cost.
And that analysis is only good if you assume market value is the determining factor. For many of us, these cars are worth much more than their market value...that's why we own them. A good running 240 or 300 of the early 80's may have only a market value of $2000. However, we know that they can give you a couple of hundred thousand miles of very low cost, safe, transportation. No matter how you slice it, it's a great deal.