Legal question about selling a motorcycle?

Need some legal advice. I sold a guy a motorcycle on craigslist for $1,100. I did not say that I was selling the bike as is. I advertised the bike at $1300. He came over and test drove it with his friend who knew a little bit about bikes, but at 18 and having gone through dozens of them I knew a lot more. They were driving the bike home and about a quarter of the way they got to a grocery store and stopped and tried to start it again and it wouldnt start. They tried cranking it for hours and didnt call me till then, which I came over and started it for them in under 5 minutes. Then they take the bike home, and as I found out today it worked fine the first 3 days. But after that the Ignitor box went out, which delivers spark to the plugs and since the bike is from 1981 it's a bit hard to find but not impossible. So they took it to a mechanic of course, being completely incompetent, and he diagnosed it and did a "revamp" of the electrical system. It starts now but only with starting fluid, which according to the mechanic is because of the carburetors being out of adjustment or dirty. I cleaned the carburetors myself although I did not tune them. So it's still at the mechanics shop, and hes going to give an estimate for the carburetor work tomorrow. They put a $315 deposit on it, and today when they called and told me all of this, I said I'd give them $250 back, mainly because I thought they could sue me if I didn't. Also I did this because I have to meet up with them to give them the title. What should I do in this situation? I'm meeting up with them in 2 days, and being 18 and having never been in this situation, I don't know what to do.