Hahaha...rally car, WHAT!
In thinking about it more, I don't even know if I'd go over $3000 for the car. Materials alone would be around $300, and bumpers aren't cheap. I would be willing to bet there's hidden damage under the front too. It could be upwards of $1000 or more to repair the body, (or I should say repairing the front, and putting a band aid over the rust) even for me doing it myself at home.
In my searches, I wouldn't have given this car a second look, but after talking to the guy, I'm confident enough in the mechanical condition of the car to still consider buying it.