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'91 Buick Regal Crank Sensor

I have 2 questions, here’s the background:

Towed the car into the shop last night because it quit me in a parking lot and I couldn’t get it started again. It turns over just fine, just seemed like it wasn’t getting fuel/spark. Mechanic diagnosed a broken crank-shaft sensor and is concerned that the ignition modulator (sp?) could be damaged as well. While trying to remove the crank sensor he found it was impossible without removing the transmission as well (apparently it’s jammed in there pretty good and after 5 hours of working to get it out he’s given up). Here are the estimated costs:

Diagnosis and crank sensor: $230

Transmission removal: $650

Ignition modulator: $400

Total cost: $1280

We bought this car 5 years ago and it has run pretty well ever since - we’ve put in a new radiator, water pump and tires/brakes.

Question 1: Are we being told a correct story and being charged appropriately?

Question 2: Is it worth doing the repairs, or should we scrap it and start with another vehicle?