I just Joined the Delayed Entry program with the United States Marine Corps and had the oppurtunity to field strip an M-16 last weekend. (2 Minutes apart and together)  I am fascinated by this weapon and would like to know how to purchase one LEGALLY.  I'm think it can be done but I am new to the gun scene so I don't know what permits I would have to apply for etc.
Any help you could give me would be greatly appreciated.

-Eric

My personal feel on Class 3's is don't get into the NFA system. Once you do, you can say goodbye to privacy.

Personal feelings aside, first you need to find out if your state of residence is a Class 3 state.  This means that civilians can own Transferable Machine guns.  Now find a Class 3 dealer in your town and let him/her know that you want a transferable M-16 (either in Registered Receiver (RR) or Registered-Drop-In-Auto-Sear (RDIAS) form)  

The RR M16 is ready to go.  The RDIAS is a small piece of metal that sits behind the trigger group in the lower on an AR15.  You'll need an M16 selector group and M16 bolt carrier to complete the setup.   Once you've found one, You'll need fill out BATF paperwork, either a Form 3 or a Form 4 and pay a $200 transfer tax.  Along with the Form 3 or 4 you will need to submit a Fingerprint card and a CLEO sign-off.  Approximate wait for your first transfer is 6-8 months depending on the load of your local BATF office.   You must have a CLEAN record.  

Oh yeah, the RR M16 or RDIAS will cost you about $3000 - $5000 which you'll need to pay at least half up front and the balance on delivery (after the Transfer is approved)  Subsequent transfers won't take as long if you want to start collecting NFA items.

Take it FWIW.

As you said you are ne to the firearns scene, you may want to consider an AR-15, its a whole lot cheaper and plus not as much paper work and red tape. Dont get me wrong owning an M-16 would be cool but to me its just not worth the paper work.
I dont if you know but the AR-15 is just the same as the M-16 with out the full auto or burst controls.

Six

I don't know where those prices came from, but that's cheap for my area. Cheapest DIAS I've found is $4000.00 not including fee's. That's just a tiny piece of metal with numbers on it...no gun,but can be moved from gun to gun,basically creating several different varieties of a full auto gun. The prices vary on full-auto M-16's from $6,900 to $9,100 depending on the model & who you talk to. You can get a nice Post-ban AR-15 semi-auto for around $700 and Uncle Sam won't know your number.......Something to think about.......   [:\]

Just recalling the prices of a few years back, no harm intended [beer]

Don't listen to those nay sayers. Having full auto guns is the elite of the gun owner spectrum. Anything else is just a wanna bee.

Ok I saw by your profile you showed Minnesota as home state. Well Minnesota is what is referred to as a C+R state. Citizens may only own firearms listed by ATF as Curio or Relics. This means gun typically over 50yrs old or determined to be so collectable that no one would use them as a weapon.

Only the earliest of M16s would qualify as a C+R gun and C+R guns must be originals never conversion guns.  You will have to shop hard to find a C+R gun and expect to pay a premium for it.  I would guess close to 7k.

Contact Bob Bowman [email protected] he is a machine gun dealer in the twin cities area. He can give you a closer value to what a C+R M16 is gonna cost. Also there is a machine gun shoot comming up in May outside the twin cities. Contact Bob for info. That way you can go and rent some various guns and decide what you like and might want.

I have a 45 Reising C+R gun for sale for $2400 first transfer paid. This could transfer direct to you after you got a C+R collectors license through the ATF. Not an M16 though. They are the most versatile gun going and that is why they bring the big bucks.

7k what have u been smoking last last a non  C&R m16 is about 8k on up

You're looking in the wrong places!

                 
In case anyone was curious.... The prices I posted earlier are accurate....Reason is 'cuz I'm looking for one myself... I saw an M16 A-1 at Fort Washington gun show for $6,900 (got the guys card in my truck) Also talked to my class 3 dealer...Henry Smith of "Smith Specialty Arms",he's selling them for $6995 + fees.Also spoke with class 3 dealer, Dennis Todd and his wife, at Fort Wash. they had a "DEAL" on new M-16A2's for $8,900 (deals over now)...now they're up around $9,100-$9,300 I think......So, my Quotes are fact not fiction....      [:)]

Instead of a M16 get a converted AR15 lower.  Those run around 4800 - 5500.  I paid 5k last year.

Check the Colt M-16 George Denkins has for sale for $6,395.  Good person to work with.  The URL is http://www.denkins.com/coltm16.htm