1997 Pontiac Sunfire gt 2.4

Sister in law has a sunfire. Started making knocking noise. Mechanic said that car had no oil in it and motor is shot. The car has never leaked oil and oil changes were done as needed. There were no signs of leaks, and no oil being burned out through the exhaust. Also, im not sure if it has an idiot light for the oil or if there is a gauge, but whichever one it has, there was no indication that the oil was gone. The mechanic says it will cost almost 5 grand to replace motor, and that seems a little steep. I have researched the net and found motors as low as $850 and they have been tested and all that. I am wondering what it actually costs to replace an engine, and if it is worth it to try and buy a used engine and see what another shop will charge, or if $5000 is a fair price. Thank you.