WWGRMD?

My oldest son and his wife bought an Xterra a few, maybe 4 years ago. I think it had one problem or another the whole time they had it, but they liked it and from what I recall it is in very good condition. It's an 05 with the 4L/6spd, and some mileage on it. Now the motor is pooched and it's a bit of a job to replace, and not a cheap endeavour no matter how you go about it.

Fix it and drive it?

Sell it as is

Part it, though I'm not sure there's any market for parts as these seem to be more commuters than off roaders.

If they’d likely keep it for a long time, and the rest is in good shape, I’d replace the motor.  

What kind of problems did it have during their ownership? Engine related? Electrical gremlins? XTerras seems to hold their value fairly well, and they don't really make anything like that anymore that could be a direct replacement (maybe a 4 Runner could). If the body is in decent shape, and not in danger of rusting away I can see spending the dough to replace the engine and keep a good thing going.

Down here in FL,  Xterras depreciate like stones.  There are several claimed to be good running examples on FB and CL daily for under $3K.   Now, since it's FL, a lot of those are 2wd models.   Even so, I've always been puzzled why they are so cheap----as they seem to be just a stripper Pathfinder with a strange looking body.   I know they have a reputation of being thirsty and slow, but with the 4 liter, how bad could they be?  

To the O.P.---- if they love it, and it's in decent shape, replace the engine with a lower-mileage junkyard find.  Otherwise sell it as is and cut your losses. (or theirs)   

Sell it, replace with a 3rd gen 4Runner. Done. 

Remove 4L replace with 5.3

Look at comps and compair to price of a motor replacement. Simple math will tell you what to do. If the math is close then a tie is always decided by how much other service is up to date. Like brakes. Ate they new or do they need work. How are the tires?  Suspension in good shape?  Rust is always an obvious one. 

The engine replacement will come out, all in, about the same as the thing is worth. They're not worth much here either. Maybe that's why they bought it in the first place. It's not rusty but it will always be a Nissan...

If it were me I'd see if I could sell it as is, but since they don't really seem to be enthusiast vehicles, there's probably not much demand.

I don't see a lot of options, I just wondered if anybody here might have some brilliant idea we didn't think of. It wouldn't be the first time.

Offer it u as a challenge starting point?