DHS overvalues a car that needs to be sold. What do you do?

So the person who lives in the house has a 2005 Freestyle with over 225k miles on it. I am not a mechanic but there is something with the transmission and would cost $8-$10k to fix. The car is beat, does not run. Want to sell the car, it is an eyesore. Scraping it would be around $500, the mechanic says the value as is is about $350. Medicaid states the FMV is $4500, so cannot sell for less than that. Worker not grasping it. Is there anything that can be done?