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I was looking at my old Iron Hand Straken model today and wondering, "what do most players do with old models that have been retired from the game (ie Commissar Yarrick and Colonel Schaeffer's Last Chancers)?

Some models have legends rules for friendly games and others are just gone into the mists of time...

So, what do you do with your old models? Sell them? Box them up? Turn them into terrain? Give them away?

Usually I still use them as generic HQ units or whatever is closest to what they would be in the game if there's an equivalent.

For example, a lot of Ork characters that didn't have plastic models got squatted rules-wise like Kaptin Badrukk or Boss Zagstruk. For the former, I still use him when I use the Mek Kaptin enhancement to be a counts as SAG Big Mek in the Taktikal Brigade detachment since he basically has the same rules as the OG Badrukk before he got removed from the codex. As long as the base size is the same/adjusted and the body of the model is roughly proportionate to what I'm using it ruleswise and I let my opponent know ahead of time, it's usually not a problem. Same for the old metal Ghazzy model I have, I still occasionally use him as one of the Meganob bosses instead of being Ghazzy himself.

Drop out of the edition cycle and play whatever I want with the 4 other people I game with.

Two of us attempted 9th back when it launched, didn't work out and haven't played 40k since.
We've also not moved to HH3 so currently we're fully kitted out for anything we want to do, in fact our issue is that we don't have rules for new things that are coming out (Saturnine for example). In that vein, we just use whatever seems closest to the WYSIWYG for the models.

Counts as if I can. Moved down to a secondary display shelf if not.

I keep using them.

As long as its got current edition rules - Codex or Legends, it gets used as what it is.
As I'm not in a tournament I don't need my opponents permission to use the rules of the game.

Straken for ex? Still has Legends rules. So Straken he is.
If someday he doesn't have unique rules? Then he'll get used as a generic HQ guy. Or a generic trooper. Whichever i decide best fits a bionic arned dude waving a shotgun.

Same with other stuff. It it doesn't have current edition rules, I'll find something for it to represent.

Carry on playing with them. Discuss with opponent and either use the last existing rules or tweak them. Rule of cool and don't be stupid about it