Seeking advice about sourcing a new engine (blown head gasket)

Hello, I'm a long-time reader of this forum, but this is my first post. I guess the bottom line to my question is:

How much should I aim to pay for a used engine? What details should I look for and confirm? Minimum warranty time? I'm seeing ones on eBay right now from $700 to $1500 w/ free shipping; The ones I looked at all seem to be around 50k miles and have a 30-day warranty.

The TDLR is that I have a blown head gasket at 255k miles. I have a reputable mechanic who says his labor cost would be about the same to either fix/replace the head gasket, or swap in a new engine (quoted me around $1500 for labor; seems pretty good?). He got me a quote of $1800 for a locally sourced used engine but suggested I could find something less expensive on eBay. Do you think this is my best route? Aim to get a new/used, low-mileage engine in for around $3k (total) or less? I'm not really mechanic savvy. Also, FWIW, I recently used Dr. Prius to test the hybrid battery and it estimated 56.74% capacity left in fair condition. Don't know if that's the most reliable way to know the life of the battery?

A little more background regarding the blown head gasket: I drove to Nashville a couple of weeks ago and noticed the engine vibrating and the "check engine" light came on. It seemed to only be knocking when driving at lower speeds, and not really consistently. I chose to drive it the 180ish miles home to Knoxville, and I did not notice any knocking on the highway, and there were no obvious signs of the engine overheating. When I got home, I looked up the codes that indicated misfires of cylinders 2 and 4 and random misfires. I checked the coolant level which was below "low," but not empty. I honestly have no idea where the level was previously because it's not something I have been in the habit of monitoring (I know, I know-- lesson learned!) I went to the Toyota dealership the next day and paid them $180 for them to tell me I had a blown head gasket; Apparently, they stuck a camera down the cylinders and saw fluids spraying around in #2.

I've been bouncing back and forth about whether or not to just fix the head gasket, replace the new engine, or move on and invest in something "new." Not that I have much money available for spending. Any other feedback, questions, or suggestions?

Thanks for taking the time to read this!

 

Thanks for your input! What about all these "JDM" motors on eBay? There seems to be a bunch from various sellers, all noted to be imported from Japan from vehicles with around 50k miles. They all say they've been compression and leak tested and have a 30-day warranty. They don't appear to have a VIN # provided, however.

 

Thank you everyone for the feedback. I have a few more questions...

Could you please clarify what I should be looking for here?
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I just spoke with the mechanic who said he has not been able to get an EGR cooler as clean as it should be, so he sourced one for $500 for a customer. I am seeing EGR coolers on eBay for around $200. Does this seem like a reasonable option; To just buy a new one?
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This is such a touch/scary choice to make. I'm considering taking a gamble, and just trying to have the head gasket fixed (assuming I can also get the mechanic to make the EGR, valve, and intake manifold right). I was leaning towards getting a new motor, but I'm feeling intimidated.

 

Well about a month later I have finally landed on the decision to take a gamble and get a used JDM motor off eBay and have that installed. I plan to pull the trigger within the next week. Hopefully I can get through this whole thing for around $3k and get some more life out of my Prius.

I'm wondering if I should go ahead and purchase a new water pump while I'm at it?

 

I just wanted to provide an update for those who are interested:

I bought a used JDM motor off eBay for $1400 (including tax & shipping) and had a mechanic install it a couple of weeks ago for $1500. So for just under $3k, my 2013 Prius is up and running again. I also immediately had a muffler shop put an aluminum shield over the catalytic converter. I have already driven 1000+ miles and so far, so good... I think...

The check engine light was still on when I got the car back, and I assumed the mechanic just neglected to clear it. A couple weeks later I have just now taken the time to connect the OBDII to clear the CEL and noticed that it has actually thrown a different code. It was previously throwing misfire code prior to the motor swap, but now it is code P2238: O2 Sensor Positive Current Control Circuit Low Bank 1 Sensor 1

I am feeling a little paranoid... is this a serious issue, or does it seem like it could just be an inaccuracy that somehow got triggered due to the motor swap? I'll probably start a separate thread to get a read on this situation.

 

The CEL was on when I got the car back, but I have not actually cleared it yet. If I clear it and it stays off, is it safe to assume there's nothing to be concerned about?