2001 A4 timing belt

2001 Audi a4 1.8T Quattro
Automatic 87000miles
driving to work week ago and everything shut down.
Had to be towed to local shop. They claim (without really looking) that the timing belt broke and probably would have damaged the valves. Follow-up is that they think it would cost $4000 and no guarantee that the oil pump wouldn't be a problem next. They suggest replacing that entire motor with a used one hopefully with less miles. I am confused. Do I dump $4000 into this one to repair or is the replace engine a better long term solution (they haven't quoted yet, but suggested $3,500 for the used motor)? Or do I scrap the car and pick up a new car payment?

Any advice would be appreciated.
Erinn