Tips on Buying Cars: New or used contract technicality, honda odyssey, department of motor vehicles

Question
Hi Jeremy,

I'm close to finalizing the purchase of a car.  It is a 2009 Honda Odyssey that has 2,200 miles on it.  It has not previously been titled - yet was driven by a Honda GSM some - hence the mileage.  They say the contract will read used and not new.  The loan officer at our credit union where we have our loan approval says that the contract needs to read new to get the "new car" interest rate.  If it reads used, the rate goes up by about 1.25%.  Is there any reason why the contract can't read new?  I brought it up with the salesperson and he re-iterated it will have to read used - even though it hasn't ever had a title issued.  

Basically, the difference in interest rate changes my perspective on the deal - and I'm looking at how to still achieve the lower 'new car' interest rate.

Thanks for any thoughts/perspectives.


Answer
Chip,

Thanks for your question.  Most dealerships do offer what is called "dealer demos", however it does seem odd to me that they are wanting to sell it as a "used" vehicle.  Most dealer demos are not titled, and have never been, they are still considered new vehicles.  If the vehicle has infact NEVER been titled, even to the dealer, then it should be marked as "NEW" not used.  Now, with that being said, if the dealership titled the vehicle to themselves, then yes it is considered used.  The only way a vehicle can be marked new is if it has an open "MSO".  That means a Manufactures's Statement of Origin.  It is like a title, but not.  It is for new cars that have never been titled.  Every new car has one, and when it is titled, the MSO must be turned into the Department of Motor Vehicles in the state where that vehicle was sold.  Once it has been titled, it will forever be known as used.  Call the dealer and find out and ask the specific question "Does the vehicle still have an MSO".  If it does, then the vehicle is NEW, not used.

Hope this helps.

Thanks - JB