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Buyer Beware: When To Walk Away From A Sale

Jun 11, 2015 - 4 years ago

By Supply Post

If you’re considering purchasing a used U.S. military truck, crane, forklift, Humvee, or other piece of equipment, you’re in luck! The U.S. Defence Logistics Agency (DLA) sells certain surplus government vehicles to civilians at auction online, opening up a steady and easily-accessible supply to fleet managers, off-road enthusiasts, and collectors.

Buying military surplus vehicles as a Canadian citizen or resident of Canada involves a few extra considerations. Here are some common pitfalls and how to avoid them.

Don’t: Assume all government surplus equipment for sale will meet your specific needs.
Do: Get a detailed inspection report on equipment condition.

While they’re often quite good buys for your money, even U.S. government surplus items need to be carefully vetted for equipment condition before your purchase. The equipment is likely to have had regular maintenance, but be sure to get reliable information about vehicle features, age, mileage, oil lab results, tire and frame condition and more.

Don’t: Make plans for equipment use before checking military restrictions.
Do: Consider U.S. military re-use limitations on surplus equipment.

If the equipment you’re considering has a requirement for “trade security clearance” or a demilitarization code of F or Q noted in the inspection report, that indicates you will need to go through an approval process (including a background check) for a government-issued end-user certificate. Only U.S. citizens may apply for the certificate, so you’ll need to work with a U.S. citizen in your company to purchase any F or Q class items and get the appropriate end-user certificates. Then, to import restricted equipment into Canada, you’ll need to apply for import authorization from the U.S. State Department’s Office of Trade Controls.

Some military surplus items have strict limitations on use after sale. For instance, particular vehicles may not be approved for road use; this is the case for Humvees.

Don’t: Plan to cross the border with your equipment immediately after sale.
Do: Plan for a delay of at least 30 days.

Not only will you need to plan for the usual short delay for your transaction to be finalized and the equipment to be released for transportation, but in order to import even non-restricted equipment into Canada from the U.S., you’ll need formal proof of ownership. Since U.S. government surplus equipment doesn’t come with a title, the title or proof of ownership will need to be generated for you by your online marketplace. This can take about 30 days.

For restricted, demilitarized equipment in classes F and Q, including Humvees, you’ll need to go through a few additional steps before your assets can be imported, including a background check and import authorization from the U.S. government.

Don’t: Skip the details on vehicle specification.
Do: Research local regulations so you know you’ll be able to use what you purchase.

Not all provinces and municipalities have the same set of regulations for heavy equipment. Research applicable rules for your purchases, including requirements on registration and titling, weight load per axel, and axel spacing. Then, be sure to check vehicle specifications from a guaranteed inspection report against those regulations to verify that you have not purchased equipment that cannot be registered or utilized in your local area.

Don’t: Leave cross-border transportation arrangements until the last minute.
Do: Get competitive transportation estimates before you buy.

Buyers are typically responsible for moving their equipment away from the seller’s site, usually within a few days to a week after the date of sale. Consider using a transportation provider network or an online market place that offers transport cost estimates ahead of the auction, and remember that you may need a place to store the equipment in the U.S. while you gather customs documentation.

Don’t: Forget about documentation you’ll need for a U.S.-Canada border crossing.
Do: Understand international export regulations and prepare ahead of time.

Check with your transportation provider about who will be handling your customs documentation before you make a purchase. You’ll need a business number from the Canada Revenue Agency, tariff classification, any duty fees, a commercial invoice, Bill of Lading, proof of ownership and more. Your transportation provider or a customs broker can help you navigate these waters without any complications.

Understanding these five common pitfalls for buyers of U.S. military surplus equipment will help you plan your purchase and get it to your yard safely, legally and efficiently. Always work with a marketplace you trust for these transactions; a good marketplace can provide you with reliable inspection reports, help you with the intricacies of customs, and will be there every step of the way to ensure a smooth transaction.

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