It’s a bit of a catch-22 situation: should you drive on and take the depreciation as it comes, or should you sell pronto?

Stuck with a discontinued car model and clueless on what to do with it? Fret not. We brought in the car experts to weigh in on how to deal with a discontinued model. Base your decision on these factors…

Examine why the model was discontinued

Each year, a few car models are discontinued for various reasons and it’s important to understand why a particular car was stopped before choosing to buy/keep/sell that model. “The most common reason is product lifecycle. Most cars follow a 5-to-7-year lifecycle, after which an all-new model replaces it,” says Rush Parekh, Founder of Team-BHP.com. For example, Chevrolet Blazer, which was replaced with the far more modern Chevrolet Trailblazer in the early 2000s.

However, there could be a number of other reasons and Rajat Sahni, CEO – Used Cars, CarDekho.com, lists them: Outdated design and change in demand pattern, is one. For example, the Nissan Xterra, which débuted when truck-based, body-on-frame SUVs were popular, before the rise of the car-based crossover. Another reason could be the unexpected exit of major market players, like in the case of General Motors’ exit from India. It forced Chevrolet to discontinue the Beat. The third reason could be performance-related issues, as compared with competitors, or a shift in market trends. For example, the Renault Pulse, introduced in India in 2012 as a slightly altered version of the Nissan Micra, failed to capture the Indian market and continued to sell in poor numbers. In 2017, Renault decided to discontinue the hatchback.

Similarly, Honda launched its first MPV, the Mobilio, in 2014 with high expectations, but the seven-seater did not click in the Indian market. The main reasons behind its failure were its looks and the entry-level trim lacked features. In July 2017, Honda discontinued the Mobilio after facing tough competition from rivals like Maruti and Toyota.

Look at the brand

The brand definitely makes a difference in the decision to sell/keep a car. “As an example, if you own a discontinued model from Maruti or Toyota, parts and service shouldn’t be an issue. However, you are in for challenging times if you have a discontinued model from brands like Fiat or Chevrolet,” says Mr. Parekh.

Brand does impact the resale value, says Mr. Sahni. “If a brand shuts down completely, then it may not be the best decision to discard your car, as no one would be willing to buy it at a decent price.”

Check for after-sales support

It’s an unspoken rule that manufacturers must support their cars for 10 years after they have been discontinued. “Of course, in reality, after-sales support depends on a variety of things. There are cases where even two- or-three-year-old models aren’t supported well,” says Mr. Parekh.

“The discontinued vehicles are still part of a brand with an image to uphold, so after-sales service/support still follows the same policy,” says Mr. Sahni. “But if the brand shuts down in a particular country, then there are no provisions for such services, and the owner may have to find an alternate solution for servicing or any other kind of support.”

Check for availability of spare parts

Though understandably, companies continue to manufacture spare parts for these models, it’s always an ordeal to source them. “In that case, look at the big shops in prominent spare part markets, like Shetty Motor Stores in Opera House, Mumbai. If you are finding it difficult to source parts, also consider shopping online. There are lots of parts suppliers who might be able to help you,” says Mr. Parekh.

However, Binu Vijayan, Deputy General Manager, Popular Maruti in Thiruvananthapuram, urges caution over sourcing spares from online dealers, as the parts may not be certified by manufacturers, even as a large number of ‘local’ spares also flood the market. “Sometimes, it so happens that a particular part may not be in stock and will have to be ordered directly from the dealer or original maker. This may cost more and take more time,” he says.

One advantage is that, many modern cars share parts with other cars, says Mr. Sahni. “So even if the vehicle has been cancelled, it’s likely that the automaker will still build parts for other vehicles that share its engine, transmission or even smaller pieces, such as window switches.”

Ask about resale value

There is no fixed algorithm for calculating a fair price of discontinued models. Only demand and supply drives this. Mr. Sahni suggests two ways to evaluate this:

1. Inspecting the vehicle to know its exact value after considering various factors like wear and tear, depreciation and other factors.

2. Arriving at a tentative fair value of the model through inspection, though exact figures are known only after analysing the market demand for that particular model.

Paradoxically, for certain popular models, the resale value can actually go up, just like, say, motorbike models like Yezdi or old Yamaha RX 100, which retain a vintage appeal, says Mr. Vijayan.

Banned?

In case of a government decision to ban a certain genre of cars, how does one sell the car? “The car penetration level in India is merely 22 cars / 1000 citizens (versus 800 cars / 1000 citizens in USA). Hence, there will always be a very healthy market for 10-year-old cars in India,” points out Mr. Parekh. Mr. Sahni suggests, two disposal strategies that could be opted for: inter-State sale, where the vehicle is sold in a different State; scrap sale, where it fetches value from its functional parts, which can be further resold/reused.

Generally speaking

Situation 1: If you bought a model only a few months or a year before it halted production

Advice: Keep it. “The resale value is unpredictable and likely won’t rise much (if at all) in a short time,” says Mr. Sahni.

Situation 2: If you have a five-year-old car that the company chooses to stop

Advice: Consider selling, but it’s best to do so before the new model is launched. “If a car is cancelled or heading for cancellation, dealers won’t want to keep it around long — either because something else is on the way or other dealers nearby will drop prices to move inventory, leading to a cycle of lower prices and shrinking profits. So, if you are planning to sell, then look for a buyer immediately.”

Situation 3: You love the car!

Advice: Definitely keep it! “In fact, two of the three cars from my garage are discontinued, but I have no plans of selling them as I am extremely satisfied with their performance,” shares Mr. Parekh. A good example of this is the Skoda Yeti, which even after being off production for quite some time, continues to be loved by many consumers. Especially, because of the style quotient.

Should you buy a discontinued car?

It’s a mixed bag to buy a stopped model, says Mr. Sahni. “There are positives, such as getting a good deal, as there’s usually a discount on these models, and that parts will be available, warranties will be honoured. However, there are also negatives, such as lower resale value and the diminished reputation of having a discontinued car.”

Buy a model only if it was popular and sold well, says Mr. Parekh. “Cars with high sales levels and good popularity enjoy support from both the manufacturer and the market. If you buy a flop model, no one will support it and the car will be painful to own.”

Sell well

Some still-hot models…

Toyota Innova, Honda Civic, Honda CR-V, Hyundai i10, Toyota Qualis, Hyundai Santro, Maruti SX4, Maruti Ritz

(With inputs from Harikumar J S)