REBUILT OR USED Engine

I'd get a second opinion. Engines are commonly rebuilt and if done properly and by a professional engine machine shop they will be at least as good and often better than what came from the factory. There are some machining procedures that can only be done a limited number of times before there is not enough metal remaining for another attempt but that doesn't necessarily have to be done every time. The rebuilder will check for that before they start working on it. Any rebuilt engine will come with a warranty so they have to do a good job.

I suspect your mechanic has a hidden agenda unless he can provide some details supporting his claims. Perhaps he has had some bad experiences with rebuilt engines in the past. We all have, . . . just like we've all had bad experiences with engines that came in brand new vehicles. Maybe he has a used engine he's trying to get rid of. I don't have any idea what he means by "shady engine". Shops that specialize in engine rebuilding have to do a good job or they won't stay in business. Very few independent repair shops have the equipment and experience to rebuild an engine and they know it. That's why they will remove and reinstall an engine, but they take it to an engine specialty shop to have the work done on it.

You didn't say why you think you need a whole new engine. Whatever happened to it, a used engine will be the same and will be likely to develop the same problems. Common problems are often addressed by professional rebuilders who have access to improved parts and machining techniques. That's why you often get a better engine than what you take out of your vehicle.

Whenever it comes to choose between rebuilt and used engines, the better option would be to choose rebuilt, as these engines are fitted with new parts that comes with more warranty but are pretty expensive than the used ones.