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As it is not me footing the bill i have to accept what they offer.
Not really mate, when my original truck went west, i had lot's of conversations with both Nissan, and the dealer.
I had already written to the dealer, to say i was rejecting the vehicle, and was told my case was being dealt with. About a week later i ring Nissan CS, and this young guy came on the phone, i really think he must have been the tea boy?.
He was saying things like, "come on be fair" and "you have to give us a chance here"

he went on to tell me that the engine from my truck had been removed and stripped down, and they were doing all they can to get it sorted
After finaly getting through to his boss, i explained what the young guy had said, and i was told that he shouldn't even have been talking to me about this, as he was only supposed to answer calls (switcboard)
Anyway i told Nissan, and the dealer that under no circumstances would i accept the the truck back, or any repairs being done to it, i told them if i had to take legal action, i would.
A few days later, it was confirmed that the rejection was accepted, and i had the choice of a refund, or replacement truck.
Now i have to say, that through all of the nightmare, Nissan, apart from the tea boy, acted in a very profesional and appropriate manner.
Maybe as in your case if the vehicle had been older, they may have acted differently?
I really wasn't impressed with the dealer in the way they handled things, or rather didn't handle things
What i'm saying is, if i'd let them, they would have repaired a vehicle that i'd only used for a few days, and then given it back to me?, now there's now way i would have accepted that, would you have done?
My best advice to you, is to get some legal advice, we could all talk about it here forever more, but none of us (AFAIK) are lawyers, so it's all down to what you feel is acceptable?
If you're happy for them to rebuild the engine, and any other repairs, then you must give them the ok, if not take it further.
I really do hope you get things sorted in a way that you'll be happy with, and wish you good luck with it.
On the point of whether we should all be worrying about the D40 engines, sure it's a concern, but as i said before, with all makes of vehicle there will be failures, now we have a lot of members on this forum, and how many cases of blown/broken D40 engines have we heard of?
Also try searching on the web for any blown D40 engine stories, you won't find many, in the past we had a thread posted that said of 5 cases, but no proof or back up to these stories was ever given, and the member who started the thread had been logged in many times and never posted a single word???
The D40 has been out now for over two years now, i would bet that there are a lot out there that have done more than 40000 miles, so i think if there were any serious issues we would be hearing of more cases?
Time will tell i suppose, atm i don't think everybody should start worrying about something that might not happen?
Anyway Gialloevoii, good luck mate, and please keep us informed of events
Steve
