I had a 96 Hummer Turbo Diesel Wagon. It was fine around town, except for parking, and it rocked offroad. Although in east texas there wasnt much terrain to challenge it. It pretty much drives like a car, has a sharp turning radius and almost no roll tendacy.
Ok, now for rest of the story. The engine is loud, very loud. The turbo is loud. Between the rattle of the diesel engine and the whine of the turbo, you may as well take your stereo and toss it out the window. When it rains, its almost impossible to keep the windows from fogging up. The straight up & down windshield seems to be a magnet for rocks on the hiway and treelimbs offroad. Its top speed is about 75mph... the huge tires it has are not meant for 75mph on the interstate, the whole thing is constantly bouncing and adjusting the air pressure with the CTIS didnt really seem to make any difference.
At the time, my other vehicle was a C5 vette. Vettes are great cars, but cant fit the family in it, it cant carry much, and of course you dont take a vette offroad. I was stuck going from one extreme to the other, so I traded the hummer straight up even for a brand new fully loaded chevy avalanche. Avalanche is a great vehicle, I kept it for 6 months till the H2 came out, traded it in on my H2.
As for my experiance with the H1 vs H2: The H2 will do almost everything offroad that the H1 will. Almost. You give up some ground clearance and approach angles, but most likely you wouldnt notice it anyway, unless you were really in some extreme shit. The H2 gets terrible gas mileage, I average 10.5 mile per gallon. I averaged 13 miles per gallon in the H1. The H2 (mine is fully loaded, everything except for sunroof) has an awesome sound system, you barely hear the engine, its very comfortable inside with heated leather seats, and automatic climate control. I dont know its top speed, but I've had it up to 90mph on the interstate and it still rode just as smooth as 45mph. You do get some wind noise starting at around 65mph but its not bad. And of course the H2 has all the neat GM shit like onstar, 6 disc cd changer, seperate rear sound system for the back passengers and all that other cool stuff. It has amazing traction control when offroad, you just push a button on the dash to fit your situation, and dont worry about it. It handles better than any other SUV I've driven.. you just drive it like a car. It has huge sway bars and the body barely leans when taking sharp turns.
There isnt much offroad that the H1 will do that the H2 cant. The H2 has very nice onroad manners that the H1 doesnt have, you can use it as a daily driver with no problems. I wouldnt suggest an H1 as a daily driver unless you lived far from civilization, and had some other vehicle for getting to civilization. And the cost isnt an issue in my opinion, I bought my H1 used for $45k, and I have about $60k in my H2... I added some accessories, and a 10.5 inch drop down LCD and dvd player
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