I had a 2001 with a blown engine that I really researched getting a new motor for.

The first question is how long have you been going to your mechanic and do you really trust him? Does he only work on Audi/european cars or is he a "i can fix everything" guy?

If you go for a used engine, make sure you clean it out so there is no sludging issues and it's going to need some parts updated and replaced. Finding a good $450 engine is a great find, and very rare. However you should be able to find a decent engine with mileage around 100,000 for ~$1000 max. Assuming you're not doing any work yourself and depending on how good your mechanic is and what needs to be upgraded/replaced, it could be another $1000 - $1500 for parts and labor.

At the end of the day you're still in the $3000 range. If you get a warranty and a really good and thorough job done, might be worth it because you'll know you have a good engine that will last you a while.

Then you can pocket save as much cash as possible for your upgrade to newer Audi!

 

I got my s4 engine with turbos and everything for $ 400. Junkyard up my way is 200 an engine then they add the accesories and everything. I checked the compressions so i know it wasnt shot. Its possible to find an engine for cheap just need to know where to go.