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I just got rid of my 1999 Chevy Malibu with 145K on it due to issues I had. ABS light on,tail pipe fell off,airbag light on,check engine light on etc... I don't suggest getting rid of your current vehicle unless you have to. The poor MPG I got and due to many issues is the reason i got rid of my car. If your mechanic is trust worthy and can fix it "like new" for $500 and it's been a reliable car for you for a couple years i'd suggest paying the repairs and keep driving it till something MAJOR happens like engine or transmission etc... especially if you plan to buy a house soon.
The in law can probably order any used vehicle you want.