I was imagining taking advantage of the large amount of iron within the dust and rocks of Mars, allowing for magnetic engines of some kind propelling vehicles forward. Is this possible at all? What are the limits if so?
Despite the higher elemental concentration of iron, Martian soil isn't actually magnetic.
The iron in the Martian crust is primarily bound up in iron oxides. Specifically, it's mostly iron(III) oxide, which is generally only weakly magnetic at room temperatures. (Technically there's a phase of iron(III) oxide that is strongly magnetic, but it's much rarer in nature.)
Even if you build a device that has a high magnetic pull, to the point where it would be drawn to martian soil, it would be just that: drawn to martian soil.
Same goes for repulsion.
I'm struggling to find a way to actually guide this vehicle in a steerable fashion. Nevermind the issue of making the locomotion more energy-efficient than other ways of getting it to move.