What Happens When Your Turbo Stops in Your Car?
Usually when a turbo fails the pieces go into the intercooler along with a good amount of engine lube oil. If you do not shut it down quickly they can get smaller pieces into the engine, again with engine oil, the engine can actually run on this spilled oil and "Run away". If you have a failure, remove the intercooler, ALL intake system tubes. This includes the airbox, filter housing and associated tubes. Clean them well. These pieces are usually what causes a second, immediate failure.
However, turbos generally provide ample warning signs before this catastrophic event, the most noticeable is a whine that grows louder when boost occurs. If the condition is not fixed, it becomes a howl. Bad seals and bad bearings generally fail. Most turbos fail gradually and manifest as burning oil or coolant in the exhaust, or a LOT of oil in the intake, depending on where the seal fails. The good news is that, engine damage seldom occurs due a turbo failing. If the impeller chips off, they usually end up in the intercooler and catalyic converter.
You will no doubt experience a sudden loss of power. In smaller turbos, like a 91-94 Mercury Capri XR2, you will still be able to drive, albeit, WAY slow and very poorly. Some have driven some 25 miles in this state. During this time, over a quart of oil is used because of the broken seals etc. You will also have a lot of blue smoke, you will be embarrassed. With small turbos, like the Capri, the only time when the turbo is activated is when you need boost upon certain types of acceleration, at all other times, the engine acts as a non-turbo.
For a Capri, a new turbo runs between $500-600. The turbo may not even cause damage, it may just stop for other reasons. No boost = no acceleration! The car will run but not very well. In this case, check inlet hose, outlet hose, the turbine could be damaged or its bearings have seized, the Wastegate is stuck open or something as simple as a clogged air cleaner.