BUYING (NOT LEASING) A CAR BEFORE JANUARY 2, 2026? READ THIS FIRST
One of my clients recently got caught in a trap most buyers never think about. If you purchase a service loaner or demo vehicle, you can save a lot of money — it’s still the current model year, comes with a full factory warranty, and has never been titled in anyone’s name.
But here’s the catch:
Many lenders still classify these cars as used vehicles because they’ve been in “service use.” That means:
• No high loan-to-value consideration
• No preferred “new-car” interest rate
• Financing terms may be less favorable overall
The reasoning? Lenders view mileage and prior dealership use as depreciation, even if the title is technically new.
Bottom line: You can get a great deal — just make sure you understand how your lender will categorize the vehicle before you sign. But sometimes these factors “eat up” the savings you think you are getting.
