A builder proposed treating outdoor timber with several coats of used engine oil — is that a reasonable option?

On performance, setting the other issues aside: it is mediocre rather than terrible, and it is not doing what people think.

Oil-based treatments work mainly by repelling water, which reduces the moisture swings that cause splitting and slows fungal decay. Used engine oil does that reasonably well and it does penetrate.

What it does not do:

• It offers no ultraviolet protection, so the surface degrades in sunlight regardless.
• It is not a preservative in the sense of being fungicidal or insecticidal. Any claim that it protects against rot is confusing water repellence with preservation.
• It never fully cures. It stays oily, attracts dirt, transfers onto anything that touches it, and remains flammable.

And the important point for your project: your timber is already pressure treated. The preservative is in the wood. It does not need a preservative coating, and adding one contributes very little to longevity.

There are reasons to avoid it that go beyond performance, and the first one is likely to settle it.

It may well be illegal where you are. Used engine oil is classified as hazardous waste in many jurisdictions. It must be collected and taken to a proper disposal point, and applying it to timber that will sit outdoors in the weather is disposal by another name. Rules vary and it is worth ten minutes checking yours, because "the builder suggested it" is not a defence.

It is a genuine contaminant. Used oil is not fresh oil. It contains combustion products, metals worn from the engine, and additives that have degraded. Applied to timber outdoors it will leach into the ground with every rainfall, and it will do so for years.

For a bin enclosure at a beach house — near sand, near drainage, near water — that is the part I would weigh most heavily.

What I would use instead, at similar cost:

Nothing. Treated pine outdoors, left bare, weathers to grey and lasts for many years. For a bin enclosure that is a completely reasonable choice and it is free.

A penetrating exterior oil made for the purpose. Costs more than free and less than most people expect, contains ultraviolet inhibitors and often a fungicide, cures properly, and does not transfer onto clothes.

Exterior stain. Best appearance retention, needs recoating on a schedule.

Given that you are not concerned with appearance, the honest comparison is between doing nothing and a proper exterior oil. Used engine oil sits below both once you account for the disposal issue, and it is only cheaper because the cost is being paid by the ground it drains into.

Worth raising with the builder directly and without accusation. This is a genuinely traditional practice in some trades — people have done it for decades on fence posts and machinery sheds, and many who suggest it have never thought about where the oil goes.

"I would rather not have used oil on this given how close it is to the beach, can we price a proper exterior oil instead" usually ends the conversation in thirty seconds. It is also worth knowing what they intend to do with the oil if you decline, since somebody has to dispose of it properly either way.