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Hyundai Santa Fe with blown engine- fix or replace?

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I paid $4200 ten months ago for a 2003 Hyundai Santa Fe 3.5L and the engine is kaput at 108K miles. It was making a knocking noise when accelerating from a stop, so I took it to two shops who independently told me that the engine is shot and is not worth repairing. I called a few other shops who said they would not touch a Hyundai engine rebuild. mechanics told me not to drive it at all but I might have to take a chance on a few trips around town in the meantime.


option one: The best quote I have gotten is about $3000 for parts and labor to replace the whole engine with a 65K mile used engine. this will get the car working again and worth driving for a while longer. we could get it fixed and then sell it for something that we have more faith in. how much is a car worth that says it has 108K miles on it, but has an engine with only 65K?


option two: sell as-is. Everything on it works now but the engine could fail in five months or five miles. I have been offered $400 for the car as-is for parts but if that's the going rate, I might hold out for $500. Then we would have to buy another car. We would not have a car at all in the meantime, making car shopping difficult but not impossible.


My wife and I both work in retail and make a pretty lousy hourly wage. Buying a newer car for $5000 would wipe out most of our meager savings. We have been debt-free for a few years after working our tails off to get there and living simply in a small apartment for our whole marriage. We share one car and I ride my bicycle to work most days because riding bikes is awesome. (seriously much more fun than driving a car, but that's another topic.) We are trying to get ahead and feel that leasing a car or taking out a bank loan for a car would be a giant leap back for us financially, but we have to totally ruled it out if it means getting that much more of a reliable car that won't crap out on us in a few months.


Either way, we are losing a lot of money that we barely have. I just would like to know if anyone can give me a good reason why replacing the engine for $3000 or of scraping it for $500 and buying another car is a better idea.

Edited by hammersticks

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While Hyundai is getting better, there are still some engine issues. That said, it is not nearly as expensive as it would be to fix a BMW or Audi so you have that to hang your hat on.

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