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Hi,

Had my 97 Legacy GT Auto 145k towed the other day after seeing the temp gauge rise to 3/4, and burning smell&smoke coming from the rear.

I pulled over straightaway, turned the engine off etc. I noticed oil dripping from the front plastic undertray, presumably coming from somewhere at the front of the engine..? It was towed to a garage who have looked at it, done a compression test on it as well. At the time I could see no other fluids leaking, and looking in the coolant reservoir it looked fine, no oil etc.

They have since found a small head gasket leak as well the oil leak (not 100% sure as to the location of it yet). They are recommending a new engine, radiator check, coolant refill, oil filter and change. all in plus labour, $2600nzd, although this could be cheaper they say as they have over estimated the 16 hours labour in the hope that they can do it quicker.

They are not keen on replacing the head gasket it seems? I've had a good look around on forums etc and it seems that this is an option? also, replacing crank seals, o-rings etc, all the stuff behind and below the timing belt is also doable, as opposed to buying and fitting a replacement engine?

Are you able to give me a few hints in deciding what to do? The car is worth up to $2-3000 i'd say, if it was fixed, as i bought it for $3200.

Time to cut my losses, or negotiate another repair option, or am being taken to the cleaners..!?

(I am somewhat invested in the car, so far it's had 2 new tyres, rear brakes, rack ends, general service etc)

Many Thanks in advance,

R.

Yes there are other options, but there are no guarantees. If you decide to go down the road of having your own engine repaired, the price could be even more, depending on what is found to be wrong. Unfortunately, when an engine has been overheated to this extent, there is a high chance of damage to the cylinder heads and other parts of the engine. Heads often crack and overheating can damage pistons, rings, bottom end and engine block. Therefore, it can be a very expensive repair (much more than your mechanic's estimate to replace the engine.
On a car of this age, your mechanic's advice of replacing the engine is usually the safest and most cost effective option and his quote doesn't sound excessive.
However, whether a car of this value is worth repairing is the dilema here. On one hand, if you fix it, the engine should be OK for a period, plus the vehicle has some resale value, but other things can fail in the future too (transmission or other worn parts).
If the rest of the car is in really good condition, it could be worth saving as if you cut your losses, you still have to replace the car. However, if it's only average, then you may be better to quit now and put the money into a better car. The decision is really yours, and it's difficult for us to advise one way or the other.