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That is pretty typical fender rust. It is easy to fix by welding in a piece of sheet metal. Just bend it to fit over the fender curve, cut out the rusted part and weld in the new piece. A little Bondo and paint and you are done. It is about a 2 hr job, not counting the time it takes for the Bondo to harden.
New aftermarket fenders are $150 - 200, but there have been a lot of complaints about fit.
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