My vote is, fix the headlight if you haven't already done that. Skip the body repairs. Ignore the claim that it is burning oil and forget about that so-called issue.
Then, either keep driving the car for now; or, if you feel like getting a new one, sell your car as-is on CraigsList. Even with the body damage, there are people who want a running car in that age and price range -- approx 2003 and approx $1,800 to $2,000.
In my State (New Jersey), the way that car inspections now work is that they ONLY do State inspections for emissions. And, once the car has a valid inspection sticker on it, that sticker is good until the expiration date on the sticker -- such as January, 2016 or whatever -- even when a new owner buys the car. So, a big selling feature for a used car in my State (New Jersey) is that if the car has a good inspection sticker that goes into the future, the new owner does not have to worry about it passing inspection until after the existing inspection sticker expires. Most likely, your State doe snot have the same rules, but check to be sure since it could make a difference if you decide to sell your car and get a new one.