Date registered: Oct 2006
Vehicle: 1979 240 D, 1993 500 SEL
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First, decide if you like the car and want to keep it. If so, pay to get it fixed. Otherwise, some day you will forget to top it up with oil and you could lose the engine.If I were happy with the car, I would pay to get it fixed.
Remember, "sunk costs are irrelevant". Whatever you have already spent on the car has no bearing on what to do now. That money is gone, and your car is probably better for it. So for approx another $1k, you may have a car that will run for years with minimal new expenses!
Second, if you would like a different MB, top up the oil, sell it to someone else. They will end up only out about $1000k to fix, and you can go out and get an E class. You can get a nice E320, or better yet, if you have the money, look for one of the new diesels in the Eclass.