Personally I'd walk away and look for something in better shape (probably at more of the $4-6K range). Keep in mind that while you can borrow that much at a reasonable APR in a vehicle loan, you likely CANNOT finance a new engine, transmission, body work, etc. on anything other than a high APR credit card.

Body dings and paint problems are one thing, problematic drivetrains are another. Again, just my $.02.