I had a similar experience a while back on a ebay car buy. It was a great deal on a STS that I knew I could turn around and sell with a profit when I got tired of it. The engine blew on the STS the same day I received it. I threatened seller with Ebay's protection clause for autos sales and the outcome was the seller forked over 9k to get the Northstar engine replaced at a dealership. After I got the new engine I sold it and never looked back. Also I paid via credit card for protection. Never pay with check for that type of transaction, at least Paypal.
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