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Is it okay to buy a discontinued car?

By Jez Spinks, 20 May 2016 Car Advice

Toyota FJ Cruiser discontinued

As Australia farewells the Toyota FJ Cruiser and Holden Cruise, we take a look into discontinued cars and whether they’re worth the money.

The Toyota FJ Cruiser and Holden Cruze will both drive through the pearly gates later this year. 

That will signal enticing offers from dealers as they look to clear stock of these nameplates, which will either cease to exist entirely (in the case of Toyota’s retro off-roader) or be replaced by a completely different model (the locally built Cruze makes way for the European-sourced Astra). 

So does buying a soon-to-be-discontinued car leave buyers exposed to a vehicle that will no longer have parts available in the event of faults? 

The Australian Consumer Law isn’t particularly encouraging. Under ‘Consumer guarantees relating to goods’, it merely, and vaguely, stipulates that businesses selling goods – such as car manufacturers – “have spare parts and repair facilities reasonably available for a reasonable period of time, unless the consumer is advised otherwise”. 

Fortunately, manufacturers are more inclined to provide long-term assistance for customers rather than take varying guesses at what might constitute “a reasonable time”. 

Despite being under no obligation, both Toyota and Holden, continuing as specific examples, ensure spare-parts support is in place for at least a decade – well beyond the average vehicle ownership period, so potentially helping multiple owners of a particular vehicle. According to Holden’s research, only 15 per cent of owners hang on to their car for more than eight years.                                                                           

Toyota FJ Cruiser

“Holden adheres to an industry best-practice 10-year commitment to stocking crucial parts and beyond that we have a long-term commitment all our customers,” says Holden’s director of communications, Sean Poppitt. 

A team has been formed to ensure continuity of supply for parts for years to come, whether it be new panels to repair the exterior of a vehicle after an accident or filters and brake pads to complete a service, as per Holden’s industry-leading Lifetime Capped Price Servicing program.” 

Holden says its team – formed from the company’s manufacturing, engineering, supplier quality, supply chain and warehousing and distribution divisions – has created “a plan for every part”. 

This will also include the homegrown Holden Commodore, which from the end of 2017 will be imported as a rebadged version of the Opel Insignia. 

The review currently covers more than 20,000 part numbers spanning 222 Australian suppliers, and it assesses where part supply will be ongoing or considers different options where difficulties are envisaged. 

Crash-repair parts such as body panels, bonnets, bumpers, and current tooling and fixtures are typically packed up and relocated to new manufacturing sources to maintain supply. 

The plan for other parts, including engine ducts, interior soft trim and interior door handles, is to build them in sufficient quantities at Holden to ensure lifetime-supply inventory. 

The company certainly isn’t short on storage space. Just the Dandenong, Victoria, warehouse of Holden’s Spare Parts Operations business is big enough to fit three MCGs. It also stores parts dating back to the late 1970s. 

Holden Cruze rear

Toyota Australia can also use its vast dealership network, and the might of Toyota Motor Corporation in the brand’s homeland, to trace parts that are either decades old or more current. 

“We have anecdotal evidence from members of the LandCruiser club who have dragged parts out of our warehouse via the dealership network to help them restore models from the 1970s and 1980s,” says Toyota Australia’s product public relations manager, Steve Coughlan.  

“We also have the ability to source components or parts from Japan – we have a great level of support from our parent company. Especially for older models, they are still available in their warehouse and they’re either airfreighted or shipped in as required.” 

And for more recent models such as the outgoing FJ, Toyota has a policy that guarantees its genuine parts are available for both superseded and discontinued models for at least 10 years. 

“Customers can rest assured that parts will remain readily available for [the FJ] until at least 2026,” adds Coughlan. 

The availability of parts is also helped by the fact so many modern cars share numerous components – both major and minor – not just within the same brand but with sister companies. 

While the FJ shares its engine and underpinnings with the previous-generation Prado, vehicles like the Volkswagen Golf has an even more extensive family. The hatch shares engines, gearboxes and more parts with other VWs such as the Polo, Tiguan and Passat, as well as multiple models from Audi, Seat and Skoda. 

So even if one of those vehicles is discontinued, significant parts are still being produced for its related models. 

Holden Cruze front

For buyers unconcerned about owning a car that is no longer in production, or that has been replaced by a newer-generation model, there’s peace of mind to back those enticing run-out deals. 

It’s important to get as good a deal as possible, though, to help compensate for almost immediate decreases in value. 

Even if a model hasn’t been dropped owing to a lack of popularity – as in the cases of both the FJ and Holden Cruze – residuals expert Glass’s Guide says the resale value of models can be notably affected once they’ve stopped being produced or have been superseded. 

“You probably get about a five to 10 per cent drop once after they stop selling the model new,” says Nick Adamidis, marketing and sales manager for Glass’s Information Services. “And that’s probably because you don’t get that flow-on effect of advertising for the vehicle, which automatically gives interest to new vehicle, keeps it front of mind among decision makers.” 

Adamidis says a lower-volume model such as the the FJ Cruiser has a stronger chance of holding its value than a higher-volume vehicle like the Cruze. He also adds that the Ford Falcon and Holden Commodore will be particular susceptible to a major fall in value once their production runs end in October 2016 and end of 2017, respectively. 

“The higher the [sales] volume, the more adverse the impact is on resale values if they stopped producing it, or stopped advertising selling it new. 

“Toyota may only sell about 1000 of these FJ Cruisers this year. If [the FJ] achieves cult status, we could see huge demand for them in the used-car market. We’ve already seen some niche models such as the privately imported [Ford] F-series pick-ups double or even triple in value in some cases.”

Production of the Toyota FJ Cruiser ends in August, followed by the Holden Cruze in October.