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2002 Toyota RAV4 - Fuel tank

We have a 2002 Toyota RAV 4 with about 160K miles on it. The mechanic- who I trust and has done good work before- says the fuel tank is rusted out and needs to be replaced, at a cost of about $1000. A friend suggested asking about a used fuel tank. Even if we could get the price on that down to $500 to replace and repair fuel tank… would it be worth it given the age of the car and the miles on it?

You could look for a used tank. But new tanks can be had, depending on source, for under $200. There are additional parts that may require replacement, filler neck, sending unit, fuel pump, and/

To complete my response:
tank strap.
As far as is it worth it? You would have to decide that, with a rusted out fuel tank chances are you have other rust issues that will compromise the safety and longevity of the vehicle.

Seems steep! I had a tank replaced on a full size Chevy some years back for $365 including labor.

The labor guide shows 4 hours labor to replace the fuel tank if the vehicle has all wheel drive plus 0.7 hour to clean the tank. If you get a used tank for free it will cost $500 to have it installed.