Should I spend 500 on this car?

Battery needs a charge?
Lol.  That's doubletalk for an old battery or an alternator that's failing.

Car makes a knocking noise?
Lol.  That's far worse than a defective battery. 

What color was the engine oil on the dipstick?  You checked it?  Or no?  Was it black like coal?  Did it have metallic sparkles in it? 

Knocking = Danger Will Robinson!! 

You mentioned that the car is 16 years old, but you didn't mention the mileage.

I would not buy anything that I could not drive away.

Knocking noise from engine?

Thank seller for his/her time, say 'NO', and walk away...

Engine is shot.  Do not waste your money.

Knocking has me walking.(reality, running; but it don't rhyme)

Ask to drive it.  Go five miles out and five miles back.  If it did not start or run, then forget it.  The rule is ten cents a mile.  $500 would be 5000 miles.  Offer the guy $275.  He will take it.

No a bad knock in the motor can cost you a fortune for engine rebuild. Keep looking. I rebuilt lots of motors and people say well the person told me it was a little low on oil or it was like that when I bought it and never gave me any problem. Then found out what was wrong and is trying to dump it. If you want to take a chance pay no more than $150. or less and hope if you drive it easy that it lasts. Then dump it at the wreckers or sell it whole for parts only car.

If it ACTUALLY runs, it MAY be worth $500. Last I checked, you should be able to get $300 as SCRAP METAL. That said, unless you can literally drive it away, it DOES NOT RUN, no matter what the seller claims. I wouldn't buy a vehicle from a private owner without having an mechanic of MY choice inspect it first.

An engine with a knock can last 3 to 4 months but it may fail tomorrow depending on what is causing the knock. You will be taking a chance but $500 is very little to pay for a car. Once the engine fails completely you can sell the car for salvage for around $100. If the knock is very loud walk away for sure. But if the knock is not loud at all I probably would take a chance on it. Change the oil/filter as soon as you get the car but do not buy the car until you can hear it run and actually drive it.  

NOPE. WASTE OF MONEY.  Apparently you're pretty clueless about cars. 

Walk away. Buicks that knock often have broken piston skirts from severe piston slap common in that engine. If you want to spend $500 on a car that needs a new engine, it's up to you.

$500 is a good price if the body, tires and brakes are in good shape. You'll need a motor put in it right away. I just paid $5,000 for a 2006 Buick Lucerne with 119,000 miles on it.