Remanufacturing gives a full new service life for every usage cycle of a product. Since remanufacturing avoids material dissipation, it is conceivably superior to material recycling. However, quantifying the effectiveness of remanufacturing is difficult due to the fundamental lack of indicators and supporting tools designed for the task. In this study, the volume of avoided material dissipation was adopted as an evaluation indicator to measure the effect of product service life extension. The circulation path of remanufacturing was incorporated to a dynamic material flow analysis model called the MaTrace model to quantify the effect of remanufacturing on the extent to which material dissipation was avoided over time through product life cycles. Through a case study of vehicle engines over a period of 50 years by applying the extended MaTrace model, a comparison with a case where used products were all recycled, revealed that extending product service life cycles through remanufacturing reduces the overall physical loss of steel, Ni, and Cr in the vehicle's engine by 3%, 2% and 5%, respectively. These results quantitatively clarify the superiority of engine remanufacturing over material recycling with respect to the effect of avoiding material dissipation in a circular resource system.