T-5 search
Prices you quoted are not out of line for a guaranteed rebuilt T-5 in AZ. They are a popular transmission for a lot of swaps. First, make sure it's for a Ford as there are lots of T-5s out there for S10 pickups, Camaros, Firebirds, etc. Next thing, take off the top cover and look inside for damage. Make sure it's a World Class trans because the gears and pieces inside are stronger, better bearings etc. If the trans still has a tag on it run the numbers through one of many websites and you can find out what model it came from and what gears are in it.
Check local wrecking yards and swapmeets for them. I just got back from the annual Big 3 swapmeet in San Diego where we were looking for a T5 for my brother's truck. We found 8 of them....from $150 for a junk one to $750 for guaranteed rebuilt one for $750. Unfortunately, all were the GM T5 and the only Ford T5 we saw was $800, dirty and nasty and no idea how many miles on it or if it was any good.
My personal experience locally is that I got one for $125 knowing it was junk inside. My transmission guy went through it, replacing the main shaft and 3 gears, syncros, bearings and so forth for $750. I'm into it for $875 but at least I know what I have. You can also find new ones in auto parts catalogs for $1200 to $1600.
For what it's worth, there is a big swapmeet at Glendale Community College this weekend in Glendale AZ. The Good Guys hot rod show also this weekend at Westworld in Scottsdale AZ. It features a good swapmeet and there is usually lots of T5s there. Later on this month is the AZ State Fairgrounds swapmeet at 19th Ave and McDowell Road in Phoenix but I'm not sure which weekend. It will be listed in the Arizona Republic newspaper automobile want ads under Vintage and Classic Autos.
Contact hot rod clubs in Tucson or Sierra Vista....those guys usually know where to find T5s or maybe even have one or two laying around they might sell. I hope this helps you in your search. Good Luck.