Man, this would be a great question to call Car Talk with.

However, my BS-O-Meter is going off. .

Take it to a mechanic and have them assess the wear on the engine. I imagine this would be a good way to get an opinion on whether this is BS or not.

No. A Toyota Camry idles at something less than 1000 RPM. 3000 RPM is nowhere near idling, especially given that the torque peak for the car is around 4000 RPM.

That doesn't mean that the engine isn't in good shape, though. The 1996 Camry has a 3VZ-FE engine in it, which is relatively inexpensive but durable and easy to maintain. That's a lot of miles, but it's conceivable that it's still in good shape. I'd take it to a reliable mechanic before buying.

Highway miles really are much less stressful to a car, but 250k is still a whole lot of miles. I hope you are getting this car cheap?

That would be extremely high mileage even for a diesel engine, and this one's gas.

The engine is only one part of the whole package, which is itself over 10 years old now. Lots of other things start getting loose and breaking down over time, like the steering, braking system, etc. Also there might be rust on the car.

If the owner wants to charge less than $1k for it, then that might be reasonable, but certainly pay no more than $1000 for the car, and try it out first.

What's at play here is the constant rate of motion. When You accellerate, you burn more fuel, as the car attempts to overcome the drag coefficent.
On a Ford community site, a poster explains (6 comments down) how cruise control can actually burn more fuel in a number of instances, as not all highways are perfectly straight and level.

This is not unheard of, especially for a Toyota, but it bears checking out and I would not be expecting to drive across country in it.

And my best advice is to get AAA. It is the most useful $45 you'll spend if your car craps out on you.

But the seller's "explanation" is utter bullshit, they have zero idea what they are talking about or are intentionally lying to you about the car's condition.

What fenriq said. He's polishing a turd.

Granted, it's a rather shiny turd to begin with: It's a Toyota. Those suckers just keep going.

I've seen late model Toyotas run through extreme desert heat with a completely dry oil pan for two weeks straight and they just acted sluggish. Most other cars would just seize and die - forever. Adding oil brought it back to life, undoubtably with some pretty harsh engine wear, but still. It's a Toyota. Parts are cheap, they're usually easy to work on and they generally just don't want to die.

Almost any obviously smooth running Toyota is worth at least a grand (in car centric locations) just for this reason alone. But (heh) your mileage may vary.

Take it to a Toyota/import mechanic and have 'em look at it. Don't pay too much. As clevershark said, $1000 might be about right or way too much, considering the wear and tear on everything else, from the frame/body to the drivetrain, to the weatherstripping and interior.

*adjusts MeFi Junior Detective's Cap*

The Camry averages at about 25,000 miles' use per year, at ~480 miles per week.

It sounds like it was a commuter car; the highway refs imply a 25-30 mile range (more like 35, but let's allow an additional 5-10 miles locally for short hops, such as groceries.) It's quite a bit, as average use would be roughly 12-14,000 miles, annualy.

The cruise story in the email implies he wants to unload this car quickly. While it may be in decent shape, the seller's haste would be reason enough to keep looking.

the seller's haste would be reason enough to keep looking

Or to lowball him.

The guy's askng price is $3500. Ahahaha. Hahaha. Ha.

With modern lubricants, as long as you keep clean oil in the engine, they will never ever wear out (don't believe that 20,000 km betwen oil changes crap, by the way). But there is no way of knowing this, so you could be buying something that is still in perfect condition inside or that is about to throw a rod because all the bearings have fallen out. Once modern engines get worn, you can usually not repair them, as oversize pistons etc are simply not made for most cars these days. When they wear out, their life is over.

If you can establish that the car has been well enough looked after, it may be a good buy - I have seen taxis with 1,000,000 km on them still running perfectly (even if the bodies are a little rattly). Highway milage is defiintely better for a car than town work, but that is still a long way for a Camry to go and I wouldn't touch it with a 10 foot barge pole, myself.