yes you CAN get out of it
That sounded like a smug answer. You CAN get out of a contract if you really want to. Did they tell you that the demo was a new car? If so, that is fraud. On the contract it is marked new or used. Also, you can call the bank and let your objections be known abou the car and the shadiness of the deal. Tell them that they are not gong torecieve any money on this. If the finance comany doesnt finance the car, the dealer must rescind the deal.
I am not a lawyer, but i have done this before myself, successfully. Good luck.