Engine blew up in the shop.

This is likely going to end up a no win situation. Giving the customer money is admitting guilt, people don't handout money for no good reason. Here's a few possibilities of what is likely to happen. Even if the OP were to hand money out, odds are after the payoff the customer is going to say I brought my car in for service, the repair was botched I brought it back to fix it they blew up the engine. They paid me peanuts for my loss and I'm out a lot of money trying to replace the car now. Certainly not something I'd want to hear as a shop owner.

The OP could explain the reason for why he thinks it happened, then sit and wait to get sued. If sued let the judge determine who is right or wrong. Then pray the judge is a car guy with half a brain. Either way imo the customer is lost and he is going to tell his story regardless of what kind of goodwill payout he gets or doesn't get.

Or the OP can apologize, handout cash and pray the customer tells the story of how his engine blew up when in for repair service and the shop was great and paid him a bunch of money for his loss.

Final option is listen to the customer, explain the expert opinion of what you think happened, dig in and hope it goes away with no lawsuit. You can't please everyone and in business things like this happen unfortunately. The longer you're in business the more chances for something to go wrong. Odds are anyone saying they were in business for decades and never had a problem are probably liars.

Flip a coin, unfortunately any way it's sliced the OP loses. JMO
 
Not being accusatory but I’m in the camp of disbelief….in 50+ years in the automotive industry I’ve been around every blown motor scenario there could be….even race engines. A connecting rod coming through an engine block at “idle” without first hammering like a jackhammer for an extended period would be a hard sale for me and anyone else that’s been in the business.
 
The vehicle came into the shop running poorly you're shop diagnosed and made necessary repairs unfortunately you lost the patient @ 200k miles there's lot of variables on past history and owners use. I would say it would be in your favor despite how sore the customer is with you. If you want to write it off don't charge the customer for any of the work done but that also looks bad as an admission of guilt. Maybe start with not charging for labor and material just the diag fee then throw out the hero card of no charge may divert the customers attention unless they got a psychology degree. Lol
 
Some people can be very reasonable. In a previous job, one of our delivery guys had a new SubZero fridge fall off the truck lift deck in a customer’s driveway. That was a problem. The real problem was that the Lady of The House was there, and she tried to get under it and catch it. I took the call from the driver and heard the ambulance sirens approaching. I told my boss who was the owner. I have never seen someone turn white and scream in terror like that before or since.

The Man of The House called us and told us no worries, he admonished his wife for being anywhere near that truck, and further thinking she could stop a 550 lb fridge from falling. She had a broken arm and some bruises, we delivered him a new fridge and never heard anything again.
You never know how people can surprise you, for good or ill. Just a little story to give you some hope.

Definitely watching this thread with interest.
 
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