If you are buying a setup that is worth $1,000 in good shape and you don't know the condition of the turbo itself, I would make an offer of what the setup is worth, less the cost of a new or rebuilt turbo. It has some value but what if you buy it for a grand and the turbo is bad and can't be rebuilt, you would be hurting. If you or he can't tell the condition of it, you should assume the worst.
You could see if the turbine spins freely and reasonably determine that the turbo could be rebuilt which is what you might or should do depending on how long the kit has been on the car or for just piece of mind since he toasted his engine and who knows what might be going through the oil lines. Make sense?
Steve
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