Buying Surplus Vehicles (and other stuff) at US Government Auctions

Guest post today from “Angry Mike”. Take it away Angry!

The US Government Auctions an enormous amount of “stuff” every month. Everything from household goods, medical equipment, clothing, boats and vehicles are auctioned almost daily and in almost every state. The list seems endless. I will share a little of what I know about these auctions and hopefully you can capitalize on them or get items you need or want.

Many vehicles will probably need some sort of mechanical work. Many will not have keys and you can bet your life savings it will have dead batteries. Suffice to say that you will not be able to drive the vehicle away. Bring a trailer or tow truck. Even if it has keys and charged batteries you will be driving an unregistered/uninsured vehicle unless you are a car dealer and have a dealer’s tag.

It’s really a crap-shoot when buying these vehicles. They buyer is not normally allowed to inspect or preview the vehicle or start/drive it (if it runs). Bidding is done online with a pick up time that needs to be scheduled. There is not normally anyone available to help you remove or load the vehicle either. If the vehicle is filled with garbage, that garbage is now property of you and it is your responsibility to dispose of it properly.

There are NO titles offered with any vehicle, only an SF-97 document. This document basically states that you purchased the vehicle from the government and will need a title from your state of residence. I am not certain, but I have heard that some states will not title a vehicle with an SF-97. If this is true you will need to find a friend or relative in a state that does and have the vehicle titled there first.  There are also titling agencies that can help you do this. Due diligence is a must before you bid on a government owned vehicle.

There are many ¾ ton Chevy pick-up trucks, K-5 Blazers and 6X6 trucks with very low miles. Look at these carefully. It may have extremely low miles because it was only used off-road and subsequently beaten to death and rendered useless by the government. I would avoid any low mileage (under 30,000) vehicles as well as vehicles in a desert camo or tan paint scheme. These were probably used in the desert and will have 30 pounds of sand in every part that can’t have sand in it to function properly.

Another telltale sign that something might be wrong is rust on top of the air cleaner cover or rust/water marks around the odometer. All vehicles auctioned will typically have pictures of the engine compartment, odometer, interior, cargo area and at least one shot of the exterior. All of these lead to one thing: the vehicle was submerged in water. I noticed a large quantity of vehicles with these exact signs being auctioned in Louisiana about 1 year after Hurricane Katrina hit. Obvious signs such as abnormally worn tires or severe body damage should also be scouted for.

Some things to look for on the positive side are new looking alternators and brake boosters as well as batteries. There are 2 batteries in each as they are 6 volt systems. Higher mileage usually translates in to a vehicle that has been used recently on the road and therefore maintained properly. Tires with good tread life, body damage/rust are all things to consider.

A friend of mine purchased a K-5 Blazer for a paltry $730.00 with 55,000 miles on it. It had “keys that work” and it “ran if it was jump started” as the ad stated. It was a very true statement. He made the 3 hour ride with a trailer, loaded it and took it home. Once home he jump started the K-5. It purred like a kitten, even for a Diesel. He took it for a spin down the road…not a problem at all! Everything worked and it even had straight alignment. Good tires, no rust, great truck and its still running strong with over 100,000 miles on it.

He went through the process of getting a title for it which ended up costing him about $175.00 plus time. He registered it, insured it, had it inspected and has not ever had a problem with it. He liked it so much that he bid on another one.

This time he was not as lucky. In his excitement and haste he bid on a K-5 that had a fantastic paint job, but that was it. Some of the telltale signs were there: rust on the air filter cover, rusty brake booster, etc. He only paid $290.00 for this one and for good reason. It had no keys so he hot wired it to see if it would run. It wouldn’t.

The motor was seized and the trans was full of water. He resigned that one as a parts truck. What he got out of it was a good rear axle, transfer case, drive shaft(s), seats, dashboard, fenders, tail light covers, grill, hood, bumpers, etc. and 5 good tires and wheels because it had a spare. He sold the transfer case for $200.00 and scraped the remaining junk after pulling the good parts.

At a factory rated 150 Horsepower these vehicles are anything but speed demons. They have great torque, somewhere in the 370 lb. ft. range which is very useful for off-road or towing. They are thrifty on fuel for what they are and average 18-22 MPG highway according to my friend and Diesels are legendary for running longer without break down than gas motors. A little maintenance and oil changes as needed and it might be the last vehicle you ever buy.

More good news is that all of the pick-up trucks and K-5 Blazers use the same 6.2L diesel motor and transmission. They are also used in the HUMVEE with the main difference being the exhaust manifolds. If TEOWAWKI hits you can probably obtain parts and fuel from our always friendly troops.

I have also seen auctions for 6.2L Diesel engines in crates without fuel systems. The condition of the engines were listed as unknown and they never sold. They were listed with a $100.00 starting bid. Hmmmm…scrap vehicles for under $300, engines for $100 and good runners from $700-$1500…for $5,000.00 you could buy two good vehicles and enough spare parts to rebuild them both 3 times. Theoretically of course. Still not too shabby.

Other auctions I have seen were for field gear. I bid on and won a lot that included 26 Extreme Cold Weather Sleeping bags, 14 shelter half pup tents, 11 large Alice packs, 9 sleeping pads and “miscellaneous” items which included a few dozen Alice clips, 3 M-16 magazine pouches, 5 first aid pouches with supplies and 3 pair of arctic mittens.

Unfortunately one pair of the mittens had 2 left hands. Who cares though? The whole lot cost me $380.00! I had to drive 3 hours to get to the base and it turned out being an almost all day affair there, but it was still a fantastic bargain.

This was before I operated Clay Street Wholesale at www.mresource.net and I quickly went to a flea market and sold most of it and ebayed the rest of it. I wish I would have kept some of it!

I read a story of a man who bid on a Captains Bed, a REAL Captains bed, for his son. He won the bid for $50.00 When he went to pick the bed up he had actually won 48 Captains Beds. He was able to donate the others to a Church group who distributed them to the needy. One never knows exactly what you will get!

The problem with bidding on these auctions is that ALL of the big players are bidding as well. The big hitters of the Army Surplus world have buyers bidding and picking this stuff up all of the time. If something is a hot seller for them they will bid until they win it, driving the price out of reach for the average Joe or Jane.  They can afford to. They may pay more for one lot this month but get another of equal value next month for peanuts. It balances out with volume.

I use a 10% philosophy when bidding. Each auction lists most if not all of what is included in the auction as well as an “acquisition price”, what it cost Uncle Sam to buy. I typically do not bid on anything for more than 10% of the original cost. I do make exceptions but only if I REALLY want it. I also do not fall in love with anything up for auction as there will be hundreds if not thousands more just like it.

None of the Surplus I sell is bought at auctions. I typically use other vendors and get preferred pricing on their goods. Why? Warehouse space in New Jersey is $2.00 – $4.00 a square foot in a bad neighborhood. I estimated that I would need 4,000-5,000 square feet of storage space to be well equipped to sell it from a warehouse. Add insurance, employee’s, equipment, phones, computers, trucks, you get the drift. The cost could quickly exceed $100,000.00 before $1.00 had been made. Until business picks up, dramatically, I have to do it this way.

However for my own needs (or for your own needs) this could be ideal. Writing this is not helping me sell more, but as I have said before; money is not what motivated me to open my business in the first place.

Now that I made you have sugar plum dreams of 4X4’s and sleeping bags you probably want to know where to bid, right? Go to http://www.govliquidation.com/index.html and start shopping Uncle Sam’s Second Hand shop!

~ Angry Mike

Ranger Man BTW: News article: As economy sinks, officials fear violent solutions.

Good comments on yesterday’s post. Awww yeah.