What should I do with my car?

Sounds like you need a different shop. This sounds like dealer prices. Try an independent shop for a quote.

Yes... The cost to replace should be around half that. You'll need to have the car running properly to sell or trade it. Otherwise you'll really suffer on price. Suggestion. Talk to the new car dealer, especially if it's a Lexus dealer. Not a salesperson, but the manager. Explain what the car needs and ask if they'll take the car in trade as is. They'll likely charge less than you were quoted just to sell a new car.

They said my Lexus needs 2 catalytic converter’s to pass smog and they are 1500 each.

There are universal units that require some exhaust modifying start at 221.99 each from Walker, Magnaflow has some direct fit starting at 459.99 each. Of course there are more listed at higher prices but they top out at 778.99, so I don't know where they are getting those prices from. Factory units?

Thank you for helping. I’m now definitely going to check another shop or show them your answer. ☺️

Never use a dealer after the warranty runs out, they are only after your hard earned money. ASE certified independent shops are your best dollar value.