Under Texas law, if you knew of defects, but did not disclose them, you could have liability even under an "As Is" sale. A lot depends on the facts and circumstances, and whether the defects were readily apparent. That the buyer advised you immediately upon driving home is not a good sign. That fact would tend to indicate that the defect pre-dated the purchase. So, was the defect something apparent or latent (not apparent)?
The resolution to this dispute may depend on how many miles the buyer drove. If the buyer used the car substantially, the buyer should at least owe something for the use of the car -- kind of like a rental charge.
My gut reaction would be for you to take the car back, avoid the time, hassle and expense of litigation, and reach a deal on how much you refund with you getting an offset for the buyer's mileage and use of the car. But again, it depends on the defects of which the buyer is complaining, and whether the defects were apparent, latent, or caused by the buyer.
Incidentally, when someone really sells a vehicle in Texas, they should file a vehicle transfer notification with the Department of Motor Vehicles. Otherwise, the title may never be transferred out of the seller's name, and the seller (still the owner in the eyes of the DMV) would be liable for traffic tickets, parking tickets, etc. The web address for this information at the DMV is:
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The web link for the Texas Motor Vehicle page on notice of vehicle transfers for my answer above did not copy correctly. The link is: