The 8K is if you repair the engine and sell the car privately to someone at the upper end of KBB. It’s unlikely you will sell for that much, and almost certainly not as a trade in. If the rest of the car is in great shape you might get $6K, and slightly less from a trade in perspective.

The engine costing 4K isn’t that surprising; and there is some benefit to doing the repair and then trading in:

A) you get some tax savings on the new car you replace this one with B) you might be a few hundred dollars richer when all is said and done C) you can also continue to drive this car for at least a little while longer, as the new car market continues to cool, so you don’t have to overpay for the new one

There’s a lot of contingencies between being able to find the right replacement car, at a dealer that will also give you the right trade in value, so that will take some time.