Unfortunately I'm with WILLY - I would be very surprised if the state went with you on this one, especially if you bought it without a warranty (aka "as-is"). Severe rust is not altogether unexpected for a 9 year old vehicle, depending on where/if it was garaged and how it was driven. If I were you I'd try to negotiate with the dealership to split the cost with you, offer you some free MX, etc. rather than threaten to go to the state to get it completely covered. Chances are you either won't win or you'll have to spend at least the next six months fighting over what sounds like only $133. If you didn't inspect the underside at all before you bought and it only costs you that much to fix, consider yourself lucky to have learned the lesson cheaply.