Understanding MSO: Manufacturer Statement of Origin
If you’re buying a vehicle or purchasing a vehicle from anybody other than a new car franchise dealer do not accept an MSO or manufacturer statement of origin. An MSO is kind of like a title but it’s not really a title. It’s exactly what the words mean: manufacturers statement of origin. It’s the manufacturer, meaning like Ford, Honda, Toyota, stating that they’re the origin of the vehicle. Right. That’s all it is. And on that title, it gives the name of the dealership that got the vehicle from the factory. Once that vehicle is sold, that dealership is supposed to sign the back and then turn it into the government to have the first title issued to the owner that bought it at the dealership.
The Risks of Fake MSOs
What’s happening is there are some people that are making up fake MSOs because they’re harder to trace. If you have a title, you can put in that VIN number in Carfax and NVTIS in the insurance industry, NCC, or at the DMV, and they can pull up to see if it’s a valid VIN, a valid title, and who’s the owner. An MSO is not a title. It’s never been titled yet, so there’s going to be no records. It looks like a title, but it’s not a title. If you are buying a car off the street from an individual and they try to give you an MSO, that could be a fake document because there’s no way to know if that vehicle is legitimate. A lot of people are getting scammed out of lots of money because an MSO is going to be for a newer vehicle.
Dealer Responsibilities and MSO Misuse
When you buy a vehicle from a licensed franchise dealer, they’re not supposed to hand out the MSO to the buyer. They’re supposed to sign it and turn it into the DMV so the DMV can issue a title for that buyer. If somebody has an MSO, something went wrong. That’s not how it’s supposed to go. Maybe they said, “Hey, I’m going to another state, so give me the MSO, and I’ll do it.” Even then, the dealership is not supposed to do it, but it does happen occasionally. That also means there may not have been sales tax paid. It might mean that there are other requirements that you need to do.
The Importance of Proper Title Transfers
On the back of the title, if it’s signed over to a person or a company, that person now can’t re-sign it to somebody else. It has to be titled in their name first. If you get an MSO that says signed over to Joe Smith and Joe Smith says, “Hey, buy this car from me,” and they give you the MSO, you can’t do anything with it. That paperwork is worthless because it’s not in your name, and he can’t sign it over to you because he is the assignee on the MSO. Be very wary of an MSO. Manufacturer statement of origin. Some manufacturers call it a CO or certificate of origin. Either way, unless it says certificate of title that you can verify with your DMV, these are highly suspicious.
Real-Life Scams Involving MSOs
In fact, there was an article we looked at just the other day in a newspaper out of the Pacific Northwest—I forgot if it was Washington State or Oregon—where a couple lost $45,000 because they paid for a vehicle in cash with an MSO that turned out to be a completely fake document. The VIN numbers were all fake, and the car actually was not stolen, but it was a new car somebody bought from a dealership, got a loan on it, and then switched all the numbers around and resold it. You can’t get a title because it has a lien. It’s got red flags all over it.
Challenges with Legitimate MSOs
Even if you have an MSO and it’s legitimate—even if somebody bought the car five years ago and never titled it—it’s going to be very difficult to get a title with the MSO. Many times, it’s easier to do a court order title or bonded title rather than trying to do something with that MSO. So stop buying cars with MSOs. If you do need more information about what to do if you have one or how to avoid it, click the link below. We have all the information. Plus, we have consulting.
