It sounds like you know more than cars than most people, which is great. I’m a fan of keeping cars running for as long as you’re comfortable. It’s much cheaper to spend the occasional $2000 on a big repair(s) compared to a $650/month car payment ($40,000 new car with 6% interest(just a guess) for 6 years).

Some people will try to compare the amount you’re about to spend to the blue book price, but I don’t agree with that line of thought. If the car is worth $4,000 why would you spend 50% of it’s worth on maintenance? Well, because cars need to be maintained. The blue book price doesn’t know if a car has been maintained. If you go out and buy a different car for $4,000 that could be very risky. By spending the money on maintenance, you know things are in good working order.

In my mind the decision simply comes down to whether or not you like the car, whether or not you’re itching for something newer, and your financial position.