If it really is just a head gasket issue, you may want to try a relatively inexpensive fix like Head Gasket Sealer | Head Gasket Sealant | BlueDevil or some other over the counter fix before dropping that kind of money on such an inexpensive car. For the most part, the better of these sealing products offer little downside, but if you read up on the reviews many people have prolonged the lives of their cars by a few years with this stuff. If you have a higher end car I wouldn't mess with it, but for a $300 car, that's exactly the type of situations products like Blue Devil and Bar's were designed to fix in my opinion.

Quote Originally Posted by Rob D View Post
My sister bought an '04 Hatchback for $300 with 120k miles from a friend. Spent another $600 or so to get a couple tires, new windshield and work (unsure what) to get it through yearly state inspection in Virginia (it passed). Check engine light came on and her mechanic says the car has a blown head gasket. She has very limited funds and cannot afford the heavy repair cost. Should she sell it now (with full disclosure) and try to get her money back out of it or drive it until it completely dies and then sell it? I'm thinking sell now.