For starters, make sure you have records of when the engine was
changed.   Nikasil problem, I'm sure you  heard of  Also fully check
the operation of the transmission, IIRC those are sealed units and
will cost plenty to replace.

On Sun, 15 Jan 2006 09:46:22 +1300, Chris Halpin <chalpin@xtra.co.nz>
wrote:

The shop that cares for my old XJ40 tells me the early V8's (thru mid
2001) commonly have problems with the timing chain that can trash the
engine if not caught early... there is a relatively inexpensive upgrade,
but the labor cost to install that upgrade is NOT inexpensive; I'm told
all those early V8's will need the upgrade at some point (I was quoted
US$1700). I recently looked at a 45k-mile 99 XJ8 that turned out to have
bad A-arm bushings ($500), which caused serious (uneven) wear across the
face of the tires ($600+), so look for that. It also had bad oil leaks
around the valve cover gaskets ($450 quoted). The cost of the
combination of those things would be enough to bust my already strained
budget, so I didn't buy the car.