Sludge in the Engine - 2002 Toyota Camry V4

Remember my 2002 Toyota Camry I just bought to replace my Saturn? The car I've had for less than 6 weeks? The car we paid cash for?

History. Toast. Buh-bye.

The oil light came on when we drove to Washington, causing us to turn around and come home and select a different car. We took the car into the Toyota dealership this weekend and they called to say there is a bunch of metal in the oil pan and the engine is filled with sludge. We can either replace or rebuild the engine, both of which will run close to $6000.

Massive bummer.

Per the dealership, they say the sludge comes from whoever had the car before us not keeping it up. That seems odd, as I know the person who drove the car before us and am positive she had regular oil changes. At my best friend's urging, I went online to do some due diligence and learned that sludge in the engine is a HUGE problem for Toyota, and in fact there has just been a settlement this February with Toyota and Lexus owners (Not that the dealership we took it to bothered to mention this). However, my year car is not included in the settlement. Still, I went to consumer affairs and there are multiple reports of my year/make/model car with engine sludge and owners adamant that they kept the car up. Apparently, Toyota's kneejerk reaction is always to say, "The car wasn't kept up. Nothing's covered."

Our choice is to repair the engine or bail and get a new car. We were aiming for repairs, but as we started talking to the dealership we started getting more of the "Well, we won't know what we're going to find until we're in there," talk, and that makes me nervous. Very nervous. I don't want to throw good money after bad and end up with a $16,000 car that's worth about $7000 and may still have future problems. So now we're looking at buying another used car. And we all know how enamored I am of that process. I'd rather run three marathons back to back then deal with buying another used car.

The good news is, there's no rush. I'm going to take my time and look and compare. And most likely file a complaint with Toyota, if I can prove the car was maintained properly but still developed sludge.

I'm trying to look on the bright side. It kills me to see all the money just slide away--might as well have burned it. But on the other hand, something of this nature would do a lot of people in and leave them with no options. We're not anywhere near that point, so I'm trying to count our blessings.