I've done alot of work in card fraud (prevention I should add) - paypal etc seem to be more into protecting payers than sellers so I'd be very cautious. This is from their site:
"You're protected wherever you shop with PayPal. Not just on eBay, but on any of the thousands of sites where PayPal is accepted, you can get full protection* for your purchases. So in the unlikely event that an item doesn't arrive or isn't what you expected, you can get your money back."
Potential scenario is that the guy claims he never got the car or that he got scammed or that it's not fit for purpose etc and you're left liable to paypal if they pay him back.
Personally, if I was buying a car, any car, I'd want to see it with the exception of buying from a reputable dealer and the cars ordered through them. Question why someone would buy a car like he wants to and I think it answers your questions.
I'd politely decline and would only take cash or an immediate bank transfer. You can't even trust a bankers draft anymore. Lots of people go to deposit the bankers draft they've been given to find out they're dud.