Hello,
I think the technician is trying to scam you here. I don't know what kind of hard drive could cost up to $500 unless you are talking about new high end ones like SSDs.
My recommendation, buy a laptop hard drive separately, and install it yourself. This isn't very difficult to do and I have done this myself before. Your laptop manufacturer's website should also have a manual which shows you how to disassemble you laptop to replace the hard drive. If you need help doing this, you can ask me.
To boot from your external hard drive, install it like you would with any hard drive. But before that you have to change the boot order from your BIOS. Boot into your BIOS by pressing
Del at boot up and change the boot order to USB.
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