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It's either the radiator is blocked and needs to be flushed or changed,or the thermostat (the temperature regulator) is blocked and needs to be changed.
That would be up to you and how much work you want to put into the vehicle, how comfortable you are at working on the Engine, how much you want to spend, and what is causing the loss of compression. If it is stuck valves causing the problem it is a relatively cheap repair compared to replacing an Engine. Then again, you maybe able to purchase a relatively good replacement cheaply depending on where you are at. If it where me and I knew it was bad rings or a head issue such as a blown head gasket I'd just do the repair. If it is a cracked block then replacing the block is the only option. The bad news is you are going to have to disassemble the Engine and have everything checked. The good news is you have to do that anyway to replace the motor so you might as well find out what is actually causing the problem and possibly save yourself some money.
When you say new engine I have to assume we are talking a manufactured short block engine. Here is a list price of just such an engine:
CHRYSL
2
122
4
C
2000-01
Neon,
Stratus, Breeze,FWD,SOHC, MFl, 16 Valve,upper blk #642,651,lower
blk
#769,head #737,crank #755,valve cover has 10-6mm bolts, extra 8mm
bolt
under #2  intake port,with water pump Head part # call
DD91
$1,990 Here is a page you should view for brand new engines as a comparison.
If your going to get a manufactured short block engine replacement, and an engine computer along with a new battery AND labor you are getting a fair price.
Many internal engine problems, such as a blown head gasket, cracked head or cracked piston, can be repaired without having to replace an entire engine.
Potential
While taking the time to replace an engine may seem labor-intensive and costly, it will add years to a vehicle's life and will save a car owner from the cost of having to buy a new car.
Benefits
Taking a car to a mechanic and replacing an engine with a used engine can cost between $1,000 to $2,000 for parts and labor.
Solution
Car owners interested in replacing their engines with new ones can expect to pay anywhere between $2,000 to $4,000.
Speculation
For those interested in doing the engine replacement themselves, purchasing specialized tools needed for the job is a cost to consider in addition to the price of a replacement engine.
No, that sounds about right. Depending what's wrong with it, the simplest thing is to replace the whole engine. Sounds drastic I know, but it's not nearly as painful as diagnosing a seized engine.
You can shop around for 'crate' engines, and your guy could probably find a junkyard engine that would work. I'd recommend a crate motor though, they usually have a decent warranty.
It depends on which engine you have, but it seems that the belt itself is about $30 from Rockauto.com. I would recommend getting the timing kit as well, which is an extra $70 and that includes all new pulleys which keep the belt tight. This is very important in an interference engine like yours. Which means if the timing belt snaps while the engine is running you will damage the engine and can get very expensive. The kit is cheap insurance. Also, you need the belt on top of that as it is not included in the kit. So expect to pay about $100 if you go for both.
Yes under the new US/Obama deal you can get 4500 for it at a dealership if you buy a new car. The better the mpg of the car you get determines how much of the 4500 its worth. Other than that I would think 500 would be fair for a car that might not make it home.
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