2002 Jetta 77K miles Engine fails

I bought a 2002 Jetta used in 05. It is an automatic GLXV6 and it had 50K miles on it at the time. Since I bought it, I have replaced lots of little things and kept up with normal maintenance. Last week, it died on me and the VW dealership says that the timing chain broke which bent the pistons. (Forgive me, I know very little about cars) They said it would cost about 7K to fix it. Friends say that they could get it fixed with a rebuilt engine for under 4K. A non VW dealership offered me 2K for it with the broken engine.

Other than the engine, the car is in great condition. If it had a running engine, then it would be worth about 9.5K, which is almost how much I still owe on it.

Any ideas/suggestions as to what the best course of action would be?
Thanks!

I personaly say try to get the engine rebuilt, but not by the dealership. I have the 1999.5 GLS 2.0 Mark 4 and it has proven to be a solid car good engine, tranny and what not. In fact I just hit 127,000 miles today and I havent had any major problems with the car, but then again I changed the timing chain as soon as I got it :grinyes: at that time it had 89,000 miles. But for future referance try and find the manual or some info on your VR6 engine, and find out how often you should replace the timing chain. So, try to get the engine rebuilt but don't spend more than you have to.

But, then again I do not know how dependable those VR6 engines are compared to the 2.0L Inline 4 engines