Strewth! £500 just for the strip down! They are definitely "having a laugh". For a competent person with full workshop facilities and power tools etc this has to be less than 2 hours work. (probably at around £60 to £80 per hour? in a smaller workshop) I hope you haven't agreed anything with them yet? If it's still driveable you need to get it out of their grasp.
Pity you're not down here in Edinburgh as I could recommend at least a couple of garages who would do this for you economically. Anyone here on the forum who knows of a good small garage up there in the Aberdeen area?
FIAT Scotland have a section in the "clubs and events" section:
https://www.fiatforum.com/forums/fiat-scotland.330/ but it seems to be a "read only"? I met some of their members a few years back at Hopetoun House on a Scottish/Italian cars day and they were very nice and helpful people - any of you from up that way who could help?
A big dealership like AC are not going to be at all interested in doing anything with the car except trying to recover whatever they give you for it through an auction or other trade contact, they'll have no interest in trying to repair it for resale - at 10 years old it's really too old for them to be interested in it as a stock item anyway. To them the car is worth next to nothing so they've got to make the money on selling you another car. When you think deeply about this it means basically you're going to loose seriously on any deal. I still think it's worth giving Gumtree, or the like, a go and then, if successful, you'll not have the millstone of your broken car to contend with. An extra £500 if you take finance with them? Finance deals don't come FOC and they are not "giving" you £500 for nothing. It's going to be clawed back in the deal. Also beware the terms and conditions of in house finance deals, they often tie you into stuff you're better without - look carefully at what the end of contract conditions are (byback terms etc). If you can get one, a bank loan can actually work out cheaper in the long run, You just have to do the sums. Oh, by the way, same comments about aftermarket warranties. If they are giving it to you for free then Ok take it. But if you have to buy it then generally I don't think they are economic. Far too many things excluded when you start reading the small print on most of them.