Army Surplus: General Motors Won't Sell You a Humvee -- but the U.S. Army Will

By Markets Fool.com


U.S. Army surplus 1989 AM General M998 Humvee HMMWV -- yours for the low, low price of $10,000 (and up). Photo source: GovPlanet.com.

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Back in the dog days of the financial crisis, as the U.S. government pledged tens of billions of your tax dollars to try (and fail) to keep General Motors out of bankruptcy, the automaker acquired a certain unfortunate moniker among stock cynics: "Government Motors."

In those same days, GM embarked on a series of moves to slim and rightsize itself, shedding Saab andPontiac, Saturn and Hummer. Today, more than a half-decade after the crisis, General Motors can no longer sell you a "Humvee."

But the U.S. Army can -- and will.

Humvees for sale! Come one, come all!
With the wars in Iraq and Afghanistan now officially over (other headlines notwithstanding), DefenseNews.com reported last month that the U.S. Defense Logistics Agency has begun auctioning off to the public some of the thousands of surplus Army High Mobility Multipurpose Wheeled Vehicles, or HMMWVs.

Yes, that's right, folks. For a bid starting as low as $10,000, you can own an authentic Humvee that looks like this...

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Another Army surplus Humvee that the Pentagon is auctioning off -- this one practically new at a 1990s vintage. Photo source: GovPlanet.com.

...instead of a $60,000 poseur that looks like this:


Perhaps the symbol of pre-financial-crisis American excess -- the General Motors Hummer SUV. Photo source: Sin Amigos viaFlickr.

No reasonable offer will be refused
According to DefenseNews.com, bidding on the Army surplus vehicles began several weeks ago. Ultimately, the Army hopes to unload 4,000 Humvees. But in a strategy that appears calculated to keep demand (and bid prices) high, the contractor charged with selling off the vehicles, GovPlanet.com, is advertising them in small batches. Just 11 were available for purchase as of this writing, for example. But according to Randy Berry, senior vice president for operations and services for GovPlanet's parent company, Iron Planet, "we expect to have a steady stream of those available over time," with new batches going up for sale weekly, according to DefenseNews.com.

So far, so good. Interest in the ultra-macho Army jeeps has been running high, with DefenseNews.com reporting that "nearly all the Humvees" were attracting bids last month. This despite the fact that the vehicles sold do not include any "armored" Humvees, have all been "demilitarized," and can only be used off-road.

Act fast, this is a limited-time offer
But should you buy one? The prices are certainly right. At starting bids of just $10,000, these Army surplus Humvees cost a bare fraction of even used prices on GM's civilian-version Hummer, still in circulation.There are, however, a few factors you should consider before "investing" in a used Humvee.

First and foremost: gas prices. You've probably noticed that they have been dropping, right? But that has happened before, and it didn't last long. According to website treehugger.com, the average fuel efficiency on a military-grade Humvee is "around 8 [miles per gallon]on the highway and 4 in the city."

And that's for diesel.

Second, buying an Army surplus Humvee might be the easy part. Take a few moments to chew on this policy statement from the website of AM General, which makes the vehicle:

The Humvee was designed for a military mission and was not designed to meet civilian safety standards. AM General does not endorse nor support the sale of these military vehicles to the general public or private entities. AM General further opposes any use of these military vehicles by individuals or entities outside of the military context for which the vehicles are designed. AM General does not sell the military vehicle or service parts for the military vehicle to the general public. [Emphasis added.]

Suffice it to say, AM General is not exactly jumping for joy over the Army's decision to sell off used Humvees. If you buy one, the company might not want to service it. If it is missing parts, or if something breaks, it might not be willing to sell you a replacement.

Put another way: Before buying an Army surplus Humvee because "It'll look cool in the driveway," think how it will look when sitting up on cinder blocks in the front yard.


Once a thriving GM Hummer dealership, this store is now a vacant lot: Photo source: m01229 viaFlickr.

The article Army Surplus: General Motors Won't Sell You a Humvee -- but the U.S. Army Will originally appeared on Fool.com.

Rich Smith has no position in any stocks mentioned. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.