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Help with warranty please

I bought a 7 year old Mercedes C240 7 weeks ago from a second hand car dealer, I was given a year AA warranty with the car. The engine management unit failed last week and the car is now in the garage. When looking at the warranty it states that each claim is only covered upto £500, the total bill is likely to be £1500. Several people have told me that the dealer has to give you a 2 month warranty regardless of the AA warranty. Is this true? :confused:
I bought the car on credit card, if the dealer will not foot the entire bill can I claim against the credit card company? :confused:
Thanks for looking.

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