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I'm not sure I'd be willing to drop 6-7K on a car that only worth maybe 7-8K but if you really like it and want to drive it long enough to recoup the investment a new engine would be a reasonable investment.
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Tim's right, just depends on how much you really like your car. However, dropping $7k is cheaper than buying a New car, that's for sure and at least you know the car. If your willing to stick with a MB. A older 123 or 126 wouldn't be a bad choice depending on its condition. Even those models can be expensive. Good Luck
