Valid to UK only - excludes oversized items
The simple answer is yes, it is advisable to varnish your decal, for a couple of reasons
One being that if the model is going to be handled regularly the decal could be easily scratched off making the model look tatty.
The other reason is that over time the decal can become brittle on the model and start to flake off, by adding the varnish, you will seal the decal avoiding these potential problems.
Also the varnish will give the appearance of a professional job weather it be for your Loco or wargaming figures.
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