Engine probably flattened

I have a question. I bought a Smart last August Built 99 with 83,000 on the clock. Now I have big problems with my engine. Came out only black smoke in the back and no more performance. I towed this directly to Mercedes and relied on my used car warranty. I called the seller (dealer) and he told me to have it repaired. The insurance(guarantee) will take care of the damage plus the SB. SB would be in my case at a I can pay 40% myself in parts. Now we start from the worst and I get a new engine (because the personnel costs pay the guarantee, which certainly has to pay less when installing a new engine than when repairing it). That makes just under 500-600 EUR only my excess. Now my question: Why do I buy from the dealer if I have nothing from a used car guarantee? In the end I pay! I bought the car privately, which would probably have cost me less than 1000€, then I would shoot a cheap engine and install it myself (am a mechanic). Now I have paid a guarantee when buying, which in the end does not bring me anything but costs. Is that so right? Because in the end I have nothing of it. This insurance applies only to engine, turbochargers and diff. I am even forced to do my maintenance at a specialist workshop. to let what is again cost!