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We've installed used motors for customers over the years, some with great success, others without. We put a used 2.5 into a customer's car last year, which we recently had to do a head gasket on (he elected to only freshen one side of the engine, against our recommendation). See our other thread for today's fun with that car.
In terms of the M96 motors, it's not unheard of to have head cracks, and sometimes, they can be very difficult to diagnose. Pressure testing is the only method, and since these cracks can be small, heating the head to temperature is highly recommended.
As to trusting an engine from a salvage yard, while we've used that approach many times over the years, it seems to be becoming more and more risky now that less qualified people are starting to put M96 motors together.
Now that we are an LN dealer and have our own M96 engine program in house, we strongly urge customers to have any work done by us, as we can control the entire operation and warranty our work.
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