It sounds like you're in a tough situation with the 2015 Yukon XL. Given the misfire and the 0 PSI compression in cylinder 7, it's understandable that the mechanic recommended replacing the engine, especially with the vehicle already having 207k miles. Here are a few things to consider:
1. Cost of Engine Replacement:
The cost of a new or remanufactured engine for a Yukon can range anywhere from $4,000 to $7,000 or more, depending on the source and labor costs. If you opt for a used engine, you might find a lower price, but you'll have to balance that with the risk of inheriting other problems. Factor in the labor costs on top of that, which can be substantial.
2. Further Diagnosis:
While it's frustrating to keep spending money, getting a second opinion or more thorough diagnosis from a GMC dealer could confirm whether an engine replacement is truly the best option or if there are alternative repairs that could be more cost-effective. This would also give you a clear idea of the total scope of the vehicle's mechanical health, including the transmission.
3. Transmission Concerns:
With 207k miles, the transmission could indeed be a concern in the future, especially if you end up replacing the engine. If you already have doubts about trusting the vehicle, the risk of future transmission issues might reinforce your hesitation about investing further.
4. Trade-In or Sell:
If you feel like you're ready to move on from this vehicle, you could try selling it as-is or trading it in at a dealership, but you'd likely get very little without fixing the engine. Another option would be to sell it privately as a project vehicle for someone who is willing to put in the time and effort to replace the engine themselves.
5. Next Steps:
Given that you're working at a dealership and have some insight into how these situations are handled, you could continue pushing for a more reasonable trade-in or assistance from your "friend" at the dealership. However, if that's not working out, moving on to cut your losses might save you from further financial strain.
In short, you're at a crossroads between investing in the vehicle or moving on. If you're concerned about future issues and feel like it's not worth the risk, letting go now might be the best option. If you decide to move forward with repairs, a clear diagnosis from a dealership could help prevent further surprises.