If the body,etc. is good and you could get it for $1,200 or so it might be worth looking for a used engine. The current owner probably knows the cost of an engine rebuuild so you might discuss it with him before starting with an $800 offer. Let his run you up to $1,000 and then dig in your heels. Remind him that even though his car is very nice it will require a lot of money to get it on the road and overall these cars are just not worth more than about $2k in the best of condition. A little sob in the right place might help.