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I think it's very important when discussing how long an engine "should last", particularly compared to cars less expensive initially, that this engine did not wear out. It didn't gradually go downhill, start consuming oil and smoking, and eventually become useless because of general wear. They found chunks of metal in the oil. Whatever the cause, there was a more catastrophic failure. To me, the "initial cost" argument doesn't hold any weight in a catastrophic failure kind of situation.
Replacement is much earlier than reasonable expectations, without a doubt.
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