It comes down to what your legal rights are. They're not going to give you a new car unless legally obliged.
I'd cop the new engine but be a pest in other ways. I'd be asking for the warranty to be extended to 7 years (like they were offering early last year)plus free servicing for 3 years etc. They should give you whatever you want if it's reasonable.
Thanks and I agree 100% but if you don't ask then there's absolutely no chance, (realistically probably none anyway).
I like your idea of being a bit of a pest especially with the extended warranty. You guys might be interested to know that in N.Z. we get 3 years complimentary servicing with every new Holden but only 3 years warranty with a 100,000 km limit. Frankly I think I'd rather have a longer warranty and even a 5 year one in the circumstances might be a reasonable ask and is probably what I'll ask for when they turn down the new car request.
5 Years warranty is becoming more common in N.Z. with Ford, BMW, Mazda, Honda, and Kia among others already at 5 years.