Should I buy a rebuilt transfer case or a salvaged one?

Year: 1999
Make: Chevrolet
Model: Silverado 1500 LS
Issue: Bad Transfer Case

Late model 99 Chevrolet Sliverado 4x4 with push button transfer case. At the end of last winter the transfer case began a grinding-noise when attempting to go from 2H to 4H.

I have a great mechanic who has proven both his skill and honesty to me a few times now. I took the truck in for diagnosis. His hope was that the electronic transfer may be faulty but unfortunately found metal shavings when he went to check the lubricant in the transfer case.

Diagnosis: Bad Transfer Case - Replacement necessary.

Mechanic has recommended a salvaged transfer case from reputable salvage dealer.

I have sourced a rebuilt transfer case with manufacturer warranties from a "major parts chain" for approximately 1/3 more cost.

My debate: The truck (while very late model), has a rebuilt engine that has less than 50k miles on the rebuild. I have expectations that I will continue to drive and maintain this truck for a very long time.

Although I am always aligned with less cost, my first response is that the rebuild from "major parts chain" is warrantied and far less likely to require a replacement in the remaining life of the vehicle.

However I am also uncertain how to evaluate the existing transmission. Presumably it has >100k. Is there a risk in pairing an OEM rebuilt transfer case with a transmission this old?

Mechanic is suggesting the salvage for cost and life of vehicle, but I’m not sure I agree this time.

Thoughts? Suggestions?

For 1/3 more with warranty, I would go with a rebuilt. Transfer case won’t affect the tranny.

Rebuilt, hopefully with “case savers” that prevent wear-through or the rear case half (common problem with these). The T-case is completely separate from the auto-transmission. They don’t share oil so no issues there.

The extra 1/3 cost, as @knfenimore points out, comes with a warranty, likely longer than the salvage T-case. Seems like your next issue will be the transmission seeing how everything on either side will be rebuilt.

My vote is for the reman with a warranty. For what it’s worth and as a mechanic, my non-scientific estimate of salvage yard engines, transmissions, rear axles, etc that have problems ranging from comparatively (?) minor to major to utter scrap metal is probably in the 30-35% range.
That kind of percentage does not inspire confidence when placing a bet.

And yes, I’m fully aware that salvage yards “guarantee” the part to be good; a part they’ve never seen in action and which was torched out of a used vehicle they know nothing about other than that it was drug in behind a tow truck.