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I cannot advise you but your case is strong because why would you trust this dealer to rectify the problem when he denied it until AMVIC was involved and when he, as your expert, should have already known about the issue and not sold you the car.
You can sue in Small Claims Court and self-represent so there will not be any legal costs.
If you don't want to take the settlement then send them a letter demanding reimbursement in full by a deadline that you set and threatening to sue.
If you end up having to sue you can always post on this site again if you find you need some help during the process and I can assist you further.