Lower your car payment in Delaware

What’s different about refinancing a car loan in Delaware

Vehicle titles in Delaware are issued by the Delaware Division of Motor Vehicles (Delaware DMV), which records and releases liens on paper titles. That is worth knowing because a paper lien release adds mailing time between your old lender and your new one.

• When the final payment is made on a recorded Delaware motor vehicle lien, the law requires that within 30 days the certificate of title be signed to show satisfaction in the manner the Division prescribes; once the certificate is presented, the lien register is amended and the title is stamped satisfied. A lienholder that fails to satisfy the lien within 30 days is subject to a statutory penalty, and if the lien remains unsatisfied after 60 days the Secretary of Transportation may satisfy it upon convincing evidence presented to the lien registrar.

  Source: Delaware Code, Title 21, Chapter 23, Subchapter II (Liens), 21 Del. C. §§ 2339-2340

• Refinancing puts a new lienholder on an existing Delaware title. Where a certificate of title is already outstanding and a lender wants its claim recorded, the statute requires the existing certificate to be returned to the Department together with an application for recording the lien on a Department-approved form; once the claim is entered, the certificate is returned to the person entitled to receive it. No claim of any kind is entered on a certificate of title until the applicant has fully complied with the subchapter, and liens properly set out are valid for all purposes from the date the certificate of title is issued.

  Source: Delaware Code, Title 21, Chapter 23, Subchapter II (Liens), 21 Del. C. §§ 2335, 2337

• Delaware repossession of a financed vehicle is governed by the Uniform Commercial Code rather than by the state Retail Installment Sales Act, because that act's definition of goods expressly excludes motor vehicles. After default a secured party may take possession of the collateral by judicial process, or without judicial process if it proceeds without breach of the peace. Before disposing of the vehicle the secured party must send the debtor a reasonable signed notification of disposition, and in a consumer-goods transaction that notification must include a description of any liability for a deficiency plus a contact for obtaining the amount needed to redeem.

  Source: Delaware Code, Title 6, Article 9, Part 6 (Default), 6 Del. C. §§ 9-609, 9-611, 9-614

• A Delaware borrower keeps a statutory right to redeem a repossessed vehicle. The debtor, any secondary obligor, or another lienholder may redeem by tendering fulfillment of all obligations secured by the collateral plus the reasonable expenses and attorney's fees the statute allows, and redemption may occur at any time before the secured party collects the collateral, disposes of it, contracts for its disposition, or accepts it in satisfaction of the debt. Every aspect of a disposition, including method, manner, time and place, must be commercially reasonable, and the right to notification of disposition may be waived only by an agreement entered into and signed after default.

  Source: Delaware Code, Title 6, Article 9, Part 6 (Default), 6 Del. C. §§ 9-623, 9-624, 9-610(b)

• If a repossession sale leaves a shortfall, Delaware law does not let the lender simply bill a number. In a consumer-goods transaction where the debtor is owed a surplus or the consumer obligor is liable for a deficiency, the secured party must send an explanation to the debtor or consumer obligor showing the aggregate amount of the secured obligations, the proceeds of the disposition, the expenses and credits applied, and the resulting surplus or deficiency amount, so the borrower can check how the figure was calculated before paying it.

  Source: Delaware Code, Title 6, Article 9, Part 6 (Default), 6 Del. C. § 9-616

• Paying off an existing Delaware motor vehicle retail installment contract early, which is exactly what a refinance does, is protected by statute. The chapter governing the financing of motor vehicle sales provides that a buyer may prepay the debt due under a retail installment contract in full at any time, that the holder may not impose any prepayment charge in connection with that prepayment, and that where the finance charge was precomputed the holder must refund the unearned portion. Any waiver of the chapter's protections is unenforceable and void.

  Source: Delaware Code, Title 5, Chapter 29 (Financing the Sale of Motor Vehicles), 5 Del. C. §§ 2909, 2912

• How co-owners are listed on a Delaware title controls who must sign when ownership or the lien changes. The DMV states that all sellers must sign the title and print their names if ownership is shown as AND on the front of the title, while titles showing AND/OR require only one owner to sign. Delaware titles do not require a notary, and where the buyer is financing the vehicle the lien section on the back of the title must also be completed. Every owner must sign an application for a duplicate title, and a lienholder must complete a section of that application to either satisfy or acknowledge the lien.

  Source: Delaware Division of Motor Vehicles, Vehicle Services - Title Transfer / Duplicate Title

These are general procedural facts about Delaware, not advice about your loan. Rules change, and your lender’s own process may add steps — a licensed specialist can tell you what applies to your situation.