No,they don't have to,but they may.
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Factory warranty ends at 3yrs or 100k
For example a part fitted at 2.5 years would technically only be covered for the remaining 6 months. However a goodwill claim could be made in a situation where the part failed again.
Just wondering if you did question what was the cause of the blown engine? When you are mentioning the ongoing issues, I think it would be fair and at least honest of the dealer to give a reason. If human fault, low oil, flogging it or was there an underlying issue? I couldn't imagine the software would allow over revving the motor in command select mode or even a grab or reverse would throw a big end?
Be thankful it failed whilst they were driving it.
Imagine the world of hurt you'd be in now if it failed whilst you were driving it home from the service.
Not really following the thought process here!
A new engine is manufactured at the engine plant, not by the dealership.
There's every chance that some numbskull at the dealership could botch the fitting of the engine into the car(been there before!), but that's no reason to assume that it's going to fail in any way.
It's just as easy for the manufacturer to botch the assembly process in some way too tho.
If two identical vehicles came up for sale, one with original motor, one with a 'new motor' and they were similarly priced/spec/condition ... for sure I'd be more inclined to buy the new engined vehicle(everything else being equal).
I think you're giving too much credence to the point that it's not going to be as it came out of the factory.
As for declaring that the motor is new when it comes time to sell, I don't understand why you HAVE to do that?
Obviously that needs to be declared to the registration authority in your state, but once that's done, that's it!
Paperwork changed.
In your situation now tho, if you plan to keep the vehicle for 50+ years, as already said, if this vehicle becomes a type that is in high demand as a classic, it will have lost some of that appeal, and value to the purist.
But, an in demand classic car with an original motor or not is still going to fetch more money than it did at the time it was originally purchased.
if you intend to sell the car privately tho, in the immediate future, with not too many more klms on it(eg. at 100K klms) you would tend to advertise the point that the engine is 30K newer than that!
As for the level of faith in the dealer to fit the engine into the car with 100% surety .. I think you're justified in being worried about that! [thumbsupbig]
ps. my reference to having a botched engine fitment to a vehicle, was on my dad's Holden Frontera.
He had something done(not 100% sure) where his mate's mate's mechanic removed engine, did whatever and fitted engine.
Doofus mate's mate's mechanic didn't fit it right, less than 1K klms later it broke it's flex plate/ring gear.
Mechanic was forced to do it again, no expense to my dad. A week later same thing happened, with new parts(supposedly) used.
Mate's mate's mechanic blamed vehicle. Dad getting frustrated! Was 'informed' that the car was a POS, and to get rid of it.
I took it off his hands, knowing it was a POS, but not in the way that this idiot mechanic claimed.
I took it to my mechanic, he explained exactly what the idiot mechanic did wrong .. simple ... he didn't use new dowels when mating engine to transmission.
My mechanic did, didn't charge me much to refit the engine and a second hand flex plate used, I got about 3years and 180K klms from it with no issue .. other than what every other badly abused 360K klms courier vehicle endured!
Yes it is inconvenient, no it won't devalue the car.
It is likely that they overfilled the oil and it had a runaway event. This isn't unknown and isn't helped by the lack of a dipstick.
The engine may have been a dud (there are plenty in the UK) and just happened to fail on the test run, perhaps done with a bit more throttle than you normally use but perhaps not too.
Reasonable, yes but not the law. Warranty has to be paid for to apply. This is paid with the purchase of a new vehicle. Anything replaced in the warranty period is covered until the end of the warranty period. Once that's over it's up to the dealer to decide to cover it under good will or not. Used to work for a large engine OEM - explaining this to customers confused many.