Hi there - Australian Defender owner here. After 1999 they dropped the TDi motor, and adopted the BMW built TD5 engine. In Austrlia, from 1999 onward the Defender was available as the Xtreme model, and some were available with an expedition pack (racks, ladders, bars, lights winch, gps, etc). this is the most saught ofater model, and luckily for me the model I own.
I have no trouble with my engine, although there are a number of reported issues with them, most commonly it seams oil in the ECU wiring loom, which eventually finds its was to the ecu, and then you are in trouble. I have not had this issue, nor have the majority of owners.
Regular servicing to Land rover spec is the most important thing for the TD5, and I would expect to see an extensive Land Rover service history. One of the issues is that the defender has 2 oil filters, (One filter, one centrifuge), and non Land Rover dealers, and most owners do not realise this, and the centrifuge, which feeds the turbo with oil does not get changed. After a while it can block up, and starves the turbo of oil - you guess the rest. Still - you can pick up a complete service kit from a VIC dealer I know in austrlia for $100 AUD, and easily servie it yourself... The centrifuge is under that dome next to the turbo - even easier to replace than the filter, as you dont need to take the engine cover and heat shield off.
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