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I agree that replacing the car is ridiculous. If the seat or the door breaks you don't get a new car either. The engine broke. They're willing to give you a new engine. They're fixing what's broken, and they're not trying to pull the usual dealership bullshit of "let's replace a few cheap parts and hope the problem goes away until it's out of warranty." What more do you want? Asking for anything beyond that is pure greed.
Oh and by the way, exactly how in hell did it run for 3700km with no oil without her knowing it? Didn't that big red OIL light tip her off? She could have mitigated the damage if she'd figured out that bright red warning lights indicate a problem.
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