Legal Question in Consumer Law in Pennsylvania

Re: Automobile sales and warranty

It is possible that you would be entitled to the value of the car if the salesman represented to you that the engine ran. If, however, the salesman merely generally said there were issues, sold you the car "as is," then provided a warranty to fix whatever went wrong on it in those three months, and the engine broken during those three months, their only obligation to do is to pay for fixing that engine (up to whatever amount provided in that extended warranty).

You do not have any inherent right to get your money back for the car simply because it needs a new engine, the issue is if that money should be your's either because the salesman breached their contract with you or they are failing to pay the warranty. Take a close look at both your sale agreement and the warranty to figure out exactly what the salesman is refusing to do and why it would be a breach of either of those agreements. If you can find such a breach in those agreements, yes, you can go to small claims court and demand your money back.