It sounds like the rack and pinion was going bad. That is about a 250.00 part from a parts store plus around 3 hours labor to replace.
As far as the engine, that could be a hundred different things. It may just need a tune up which should be around 150.00.
If the car is in good condition, it may be worth putting the money into it. I have no idea where you live so I don't know if it is rusted, damaged from an accident.
Sunday, June 30th, 2013 AT 11:56 AM