When negotiating a car loan with a lender in Delaware, you’ll want to make sure you secure a low interest rate and a loan term that works for you. Having a credit score of 660 or higher will help you get a favorable loan.

Buying a car is not a simple process, and securing a loan can be a headache if you don’t know what to look for. You want to make sure you get a loan with monthly payments you can handle, keeping in mind what works for you may be different than what works for most people.

If you’re shopping for a car loan in Delaware, the car insurance and loan experts at Jerry are here to walk you through the process.

How to get a car loan in Delaware

If you’re like most people, you probably don’t have the money to buy a new car outright. Instead, you’ll need to get a car loan so that you’re able to pay off your car over a few years. There are several places you can go to get a car loan, with the most common choice being a bank.

Here’s what to expect when you take out a car loan in Delaware:

You’ll be asked to make a down payment. As a rule of thumb, you should put down 10% of the car’s value at a minimum.
You’ll decide how long you need to pay off the loan, also known as the loan term.
You’ll negotiate an interest rate, which is the amount you’re paying to borrow the money and the way in which lenders make a profit.

Once all that is settled, you’ll have to keep up with the monthly payments for however long you agreed. Your monthly interest rate will be determined by your annual percentage rate (APR).

Several factors will affect the loan a lender will extend to you. Your credit score, the type of car you are going to buy, and the loan term you decide on will go a long way in determining how much you ultimately pay for a car loan.

Credit Rating

Car Make	Average Annual Interest Rate	Average Monthly Payment
ACURA	8.46	$361
ALFA ROMEO	8.53	$362
ASTON MARTIN	8.53	$362
AUDI	8.66	$363
BENTLEY	8.53	$362
BMW	9.17	$367
BUICK	8.56	$362
CADILLAC	8.86	$365
CHEVROLET	8.56	$362
CHRYSLER	8.89	$365
DODGE	8.69	$363
FERRARI	8.53	$362
FIAT	8.6	$362
FORD	8.56	$362
GENESIS	8.53	$362
GMC	8.49	$362
HONDA	8.32	$360
HYUNDAI	8.56	$362
INFINITI	8.69	$363
JEEP	8.32	$360
Jaguar	8.53	$362
KIA	8.79	$364
LAMBORGHINI	8.53	$362
LEXUS	8.49	$362
LINCOLN	8.66	$363
LOTUS	8.53	$362
Land Rover	8.53	$362
MERCEDES-BENZ	8.53	$362
MINI	8.53	$362
MITSUBISHI	8.69	$363
Maserati	8.53	$362
Mazda	8.53	$362
NISSAN	8.63	$363
POLESTAR	8.53	$362
PORSCHE	8.68	$363
RAM	8.56	$362
ROLLS-ROYCE	8.53	$362
Subaru	8.53	$362
TESLA	9.02	$366
TOYOTA	8.32	$360
VOLKSWAGEN	8.56	$362
VOLVO	8.36	$361

Once you’re ready to shop around for a car loan, here are the steps you should take.

MORE: What is a prepayment penalty on your car loan?

Check your credit

The first thing you’ll need to do when you want to secure a car loan is to check your credit score. If you have a score that’s 660 or above, you’re in good shape. You should be able to find a car loan with a reasonably low interest rate.

If your credit score is 700 or higher, you can expect to find interest rates as low as 3%. Considering the national average hovers around 5%, that’s a significant amount of money you’ll be able to save by having good credit.

If you have a credit score under 660, it may be difficult to find a lender that will work with you. If you find one that does, you can expect them to offer you a high interest rate.

Credit Rating

Loan Terms	Average Annual Interest Rate	Average Monthly Payment
24	11.63	$699
36	8.8	$471
48	8.25	$364
60	8.15	$301
72	8.51	$263

Compare lenders

Since you’ll be excited to get behind the wheel of your new car, you may be tempted to take the first car loan offer you receive from a lender. It’s a much better idea to compare a few different lenders and see which one has the best offer.

You’ll want to find out what your interest rate would be with at least three lenders before you choose to work with one. You can also take things like customer service into account when making your choice—just search online for customer reviews.

MORE: How to get a cosigner for a bad credit car loan

Choose your loan term

When you’re negotiating a car loan with your lender, one of the most important things you need to decide on is your loan term. Your loan term is the number of months you’ll have to pay off your loan. On average, car loans range between 60 to 72 months.

You may think that a longer loan term is better since you’d have more time to pay off what you borrowed and can do so in smaller increments. However, short loan terms are better in the long run.

Since you have to pay a monthly interest rate on your loan, having a longer loan term means paying more interest overall. So, you want your loan term to be as short as your finances allow and ideally, no longer than 60 months.

Credit Rating	Average Annual Interest Rate	Average Monthly Payment
Fair	16.92	$415
Good	8.42	$361
Very Good	5.11	$341
Excellent	3.89	$333

Get preapproved

If you can, you want to make sure you get preapproved for a car loan. Being preapproved means that a lender has agreed to loan you an estimated amount of money at an estimated interest rate.

The benefit of getting preapproved is that it will help you shop for a car with a little more certainty. You’ll have a much better idea of your budget so you can choose your new ride with confidence.

Can you get a car loan in Delaware for a used car?

Many people purchase used cars with car loans in Delaware. But there are a few differences you’ll want to take note of:

Many lenders will not finance cars that are older than whatever limit they have set.
Banks generally have a minimum value for loans they give out, and cheap used cars may not qualify. You can consider working with a credit union if this is the case.
Car loans for used cars usually have a higher interest rate. You can expect a rate of around 8%.

If you’re wondering how the age of the car you want to buy may affect your loan, take a look below:

Car Make

Car Year	Average Annual Interest Rate	Average Monthly Payment
2021	7.73	$305
2020	8.14	$309
2019	8.28	$309
2018	8.11	$307
2017	8.31	$309
2016	8.47	$310
2015	8.67	$312
2014	8.64	$380
2013	8.71	$381
2012	9.7	$512
2011	9.7	$512
2010	9.7	$512

MORE: How to calculate total interest paid on a car loan

Delaware car loan calculator

Between the loan term, the interest rate, and other fees, there is a lot that goes into a car loan. If you’re looking for a way to put it all together, we’ve got you covered. The Jerry car loan calculator will use your credit score, car make, and loan term to give you an idea of what your interest rate and monthly payment might look like.

Keep in mind these numbers are just based on averages in Delaware, and probably won’t be the exact numbers that lenders will offer you. Still, you can use this calculator as a baseline of how much you might have to pay.

Car Make

Credit Rating

Loan Terms

Loan Amount

Average Annual Interest Rate	Average Monthly Payment
8.59	$362

How to find affordable car insurance in Delaware

Even after you secure a car loan and pick out a car, you can’t drive out of the lot until you have car insurance. Delaware law includes minimums for car insurance, so you’ll need to make sure you’re sufficiently covered before getting behind the wheel.

If the thought of spending hours browsing car insurance quotes doesn’t excite you, then you’re in luck. Jerry’s car insurance comparison app will browse quotes from over 50 top insurers in minutes. Once you find a rate that works for you, Jerry’s team of experienced agents will handle all the paperwork and help get you set up.

Best of all, the average Jerry user saves $887 a year on car insurance.

“I usually don’t leave reviews, but this app was amazing! I’m young and wanted a nice car, so I thought insurance companies would charge me extra. But Jerry chopped my usual payments in half! Thanks, Jerry.” —Gabby E.

FAQs

What credit score is needed to buy a car in Delaware?

Many lenders will require that you have a credit score of 660 or higher to secure a car loan in Delaware. There may be some lenders willing to give you a loan with a lower credit score, but you can expect a higher interest rate.

Will a bank give me a loan for a used car?

Many banks are willing to extend car loans to people looking to buy used cars. However, most banks have a specified minimum car loan amount. If you’re looking to buy a very cheap used car, you may be better off working with a credit union.