A Step-by-Step Guide to Purchasing or Leasing a Car in Germany

Don’t let the eVB foul things up! (See more below.)

Buying or leasing a car – no matter where you are – is a time-consuming matter. Look, test drive, buy, get in, and drive away… maybe in the movies, but not in real life. And definitely not in Germany.

Welcome to the German Way step-by-step guide for expats or anyone else in Germany who wants to buy or lease a car. Even if you’ve purchased or leased a car before in the US, Canada, or the UK, you’ll find the German way of doing that is a bit different. For one thing, the Germans require that your car be insured (by a German insurer) before you complete the purchase (or lease) and drive away with your shiny new vehicle. In fact, the first thing you should do before selecting a new car in Germany is to determine how much it will cost to insure. Depending on the brand and model, auto insurance can be rather expensive in Germany.

1. Which Car?

Germany currently has more than 45 million registered vehicles, and that figure continues to grow. Purchasing a brand new car in Germany starts at about €9,000 for a bare-bones Dacia. The upper price ranges are almost limitless, including many German premium and luxury brands: Audi, BMW, Bugatti (owned by VW), Mercedes, or Porsche. But a typical new mid-range vehicle will cost you from €20,000 to €40,000, depending on the model and the options you choose.

Monthly lease rates vary from a spartan Skoda for €76 to a sporty Porsche for €597 – for a 48-month lease with no down (keine Anzahlung) and an annual limit of 10,000 kilometers (from Sixt or others).

No matter which car brand your heart desires, you can’t avoid these vital decisions:

• Gasoline, diesel, electric, or hybrid
• Automatic or manual (stick) shift
• Subcompact, compact, midsize, SUV, van, sports model, or convertible (Cabrio)
• Practical car, fun cruiser, or midlife crisis auto
• Determining the cost of insurance for the particular model you want

Only you can decide which choice is best for you and your lifestyle. Most Germans opt for the purported freedom of a manual transmission. (You can’t pass the German driver’s license road test without knowing how to use a clutch pedal!) In recent years, however, many German buyers have been attracted to the convenience of automatic shift, despite the higher cost for automatic. But unlike in the US, in Germany you may not be able recover the extra cost when you sell or trade in the car later. Premium models may include automatic in the higher base price.

2. Where Should I Buy or Lease My Car?

Beyond the obvious, an authorized auto dealership (Autohändler), there are a few other options. Online brokers like Drivek allow you to choose or even build the car you want from the comfort of your home. For used cars, you can turn to a private seller (von privat), smaller used-car dealers, or an auto flea market. Although you may find a bargain via a private seller, you could also pay a price later for unexpected problems not covered by any guarantee. As always, caveat emptor! (Buyer beware!)

More on The German Way Autokauf: German-English Glossary Vocabulary related to buying or leasing a car in Germany

That’s why we recommend an authorized auto store or a reputable online car broker. An authorized dealer usually provides good advice, the opportunity for a test drive, and expert periodical servicing of your car – often included in the purchase or lease price, depending on the brand and model you want. An authorized dealer in Germany is also a good idea for a used car. They are required to include a 12-month warranty on used cars. Don’t try to save up front, only to have it cost you more in the long run. A little paint can cover up serious but unseen defects. You’ll also face the rigorous TÜV safety inspection that all cars in Germany must undergo. (A new car has three years before its first TÜV checkup.) If you don’t have a warranty, you’ll have to pay for repairs.

Before you buy a used car (Gebrauchtwagen) in Germany, consult the Schwackeliste, the German version of the Kelly Blue Book. (Also a good idea if you plan to trade in your current car for a new one.) There are also online references for used car values. ADAC, for instance, lists the values for 4,200 used car models. A good alternative between new and used is the Jahreswagen, a low-mileage car that is only one year old.

Negotiating the Price
Do you have to pay the “sticker price” at a dealership in Germany? While there may be some possibility of bargaining (verhandeln), in general there is less flexibility for haggling in Germany than is usually the case in North America, especially if you need to finance your lease or purchase. A cash buyer usually has more bargaining leverage, but a non-cash buyer also may be able to get a better deal based on adding or subtracting certain options, shopping at a smaller dealer away from a large city, selecting a car on the lot rather than designing your own, choosing a car from the previous model year, and so on. But once you think you’ve negotiated a final price, there’s one last surprise…

The destination fee (Überführungskosten): Unlike in the US, the destination fee (delivery charge) is not listed as part of the sticker price in Germany. Buyers are often surprised to get hit with this extra charge at the end of negotiations. It’s a hidden expense meant to cover the cost of shipping your car to the dealer. Depending on the automaker, you’ll be asked to pay from 460 to 1200 euros.

Oddly, this fee does not actually reflect the true cost and actual mileage. Mercedes in Sindelfingen near Stuttgart charges €560 to deliver one of its cars to Kiel, 800 km away, but charges €650 for delivery to Stuttgart, only 20 km from the factory. Many buyers don’t realize that the amount can be negotiated, even if the salesperson says otherwise. A July 2016 EU court decision may soon require that the destination fee be listed up front in the sticker price in Germany, just as required in the US.

The Factory Pickup
A unique car-buying option available in Germany is picking up your car at the factory (im Werk). Almost unheard of in the United States, one out of three Audi/VW buyers in Germany chooses to take delivery of their new vehicle directly from the factory. An average of 400 new owners pick up their new Mercedes each day in Sindelfingen. German automobile buyers view the factory alternative as a special occasion that is far more exciting than simply picking up their vehicle from the dealer – who may only offer a glass of champagne and a photo (still far more than usual in the US). The following automakers offer factory delivery in Germany: Audi, BMW/Mini, Mercedes-Benz, Porsche, and Volkswagen (Seat).

Factory pickup, reflecting the German devotion to cars, is an event. The Volkswagen factory in Wolfsburg features an Autostadt (auto city) amusement park, where buyers can also arrange to take delivery of their VW model. In Munich, BMW has its elaborate, stadium-like BMW Welt (“BMW World”) complex where new owners come to drive away with a new BMW. (See photo below.) For luxury buyers, BMW even offers a premium lounge, similar to an airport first-class lounge. Audi offers pickup from its Audi Forum at each of its factories in Ingolstadt and Neckarsulm.

However, the factory option may not save you any money. You’ll avoid the dealer’s delivery fee, but you still have to pay to get to the factory, plus your costs for food and lodging. On top of that, most German automakers charge extra for the privilege! The factory pickup fee varies from 200 (VW) to 700 euros (Porsche). BMW has a range of prices for three levels of service starting at €495 for basic, up to €845 for “Premium Advanced.” Most packages include car prep, a factory tour, a food voucher, a museum visit, free parking, and some other perks. Ford and Opel don’t offer a factory pickup option at all. Choosing the im Werk option may save you 20 to 40 percent over dealer delivery, depending on the brand and model. Only Mercedes-Benz offers factory delivery for free!

Test Driving (Probefahrt)
Some dealerships in Germany may require a security deposit before allowing you to go for a test drive. In any case, you’ll need to show a commitment to buy before most dealers will let you get behind the wheel of one of their autos. If you plan to order online, your test drive options are much more limited.

3. How Do I Finance My Car?

Germans like to pay cash for many things, including cars. But other than for a used car or an economy car, cash may not be a practical option. Most authorized dealers prefer not to accept cash. German law requires that cash purchases of €15,000 or more be declared. As part of anti-money-laundering laws, the buyer must state the source of the cash and provide other information on an official form. The law also considers a series of smaller cash payments declarable, if the total exceeds €15,000. Payment using a German bank debit card (EC card) or a credit card is also considered a cash payment.

That’s why an auto lease or purchase usually involves some sort of bank or dealer financing. This makes matters a bit more complicated for expats, depending on the type of German residence permit they have. In order to get a loan approved, expats with an unlimited or longterm German residence permit must prove residency and provide proof of sufficient income and/or financial resources.

4. Which Documents Are Required for the Lease or Purchase of a Car?

Another advantage of buying or leasing through an authorized dealer is that they usually help with the financing, the paperwork, and registration process. Working with an online broker will be similar.

If on the other hand, you are buying a car from a private seller, you need to make sure you have your own written purchase agreement (Kaufvertrag). You can obtain suitable contract templates online or from a local stationery shop (Papierwarenladen) such as McPaper. Having a written contract protects you and the seller, providing the seller’s name, contact information, and other data. It also helps with the vehicle registration process, which in Germany is much more complicated than in North America. The seller has to de-register the car and cancel the insurance, while you, the buyer, must now insure and register the vehicle in your name.

The process of registering a new car purchase or lease is complicated enough in Germany that many people use a private vehicle registration service (Zulassungsdienst) or have the authorized dealer (Vertragshändler) handle the paperwork. Although it will cost extra, the vehicle registration service can make your life a lot simpler by guiding you through the registration process, especially for first-time car buyers.

A registration service or your dealer can also help with finding the best auto insurance policy. In Germany today there are about a thousand auto insurance firms competing to offer over 100,000 rate combinations! You probably want help sorting all that out.

But if you should end up with an insurance policy or rate you don’t like, don’t worry. You have the option of changing to another provider after one year, without cause. You can change companies even sooner if your insurance rate goes up. (Remember, you’re now living in a country where you can’t even cancel a magazine subscription without adequate advance notice!) More about insurance below in Section 5.

Oh yeah. The documents you’ll need: passport, longterm residence permit, Anmeldung, work contract from your firm (if you work in Germany), German bank info, proof of adequate financial resources/income, and a valid German driver’s license. (Note: An IDP or non-EU license won’t be accepted.) And most important of all: your eVB!

5. Auto Insurance and the eVB (elektronische Versicherungsbestätigung)

It sounds simple, looks simple, but of course it’s not. The eVB, or “electronic insurance verification,” is a vital part of buying or leasing a car in Germany. Once you discover how much auto insurance can cost in Germany, you may want to rethink the whole idea of buying a car. It is possible for the annual insurance premium on an older used car to exceed the amount of the purchase price.

Basically, the eVB proves that the car you want to buy or lease is covered by insurance. Without an eVB, you can’t register or take possession of your new vehicle. An eVB is valid for a period of six months. If your eVB expires before you have completed the steps to obtain your new or used car, you’ll have to renew it or get a new one.

But before you even consider talking to an insurance broker, you need to understand the following three key factors that will determine the rate you’ll pay to insure your car:

• SF-Klasse: The SF stands for “Schadensfreiheit” (“damage free” or “accident free”). Your SF class will help determine your insurance premium. The German accident-free classifications range from a low of zero or even minus, up to a high of SF35. The higher the SF class, the lower your premium. We’ll discuss this a bit more below.
• Typ-Klasse: The “model class” is an official statistical determination (annually) of how accident-prone a particular model of car is, and the cost of repairing that model.
• Regionalklasse: Your “regional class” is based on each of the official 415 registration districts in Germany, and the frequency of accidents for various car models in each district. In other words, where you live in Germany helps determine your cost of insurance. As in North America and elsewhere, if you live in a big city or metro area, you’ll pay more for insurance than if you live out in the middle of nowhere.

For expats, the SF class, your accident-free level, may present some problems if you are new to Germany and have not previously had German auto insurance. You want to avoid starting out at the zero SF, or beginner’s level, especially if you have been driving for years outside of Germany. One possibility is to get an official letter from your North American or other non-German insurance agent stating that you have been accident free for x-number of years.

So, before you buy or lease a car, you need to consider these three factors and get your eVB, which will be transmitted electronically to your local Zulassungsstelle.

In order to issue your eVB, the agent or broker will need the following information:

• The model number and the key number (VIN) of the car
• Date of the car’s first registration and the date of your registration as the car’s buyer
• Whether you intend to buy, lease, or buy the vehicle with a trade-in
• Whether you have had auto insurance before, and where
• Your registration location (Zulassungsort)
• The type of insurance you want (comprehensive, accident, casualty, etc.)
• Any supplemental insurance protection you may want

Only after you have determined your SF (accident-free) class and obtained answers to the other insurance factors above, should you sit down with an insurance agent or, as a first-time buyer, consult with a broker or dealer about getting insurance. A good broker or dealer will help you get the best SF class possible, as long as you can provide supporting documents.

Some German drivers make it a sacred ritual year after year to try to find more favorable insurance coverage. (The annual deadline is Nov. 30.) But they may be forgetting that the lowest insurance premium is not always the best solution. The true value of an insurance policy only becomes apparent when you have to file a claim. The level of service, and the amount of assistance and goodwill your insurance company/agent provides when you really need it is the true test of a policy’s value.

6. Legal Protection for Motorists • The Automobile Club

For many Germans, and for some expats as well, the family car has an almost sacred status. They care for it like the valuable treasure it is, constantly washing, cleaning and polishing it. The tiniest scratch is cause for horror. For even the slightest damage, these owners are willing to go to court and legally challenge anyone they think has marred their vehicle.

Germany is a very litigious country. If you find yourself facing one of these car freaks in court, you’ll feel a lot better if you have the backing of an automobile club and/or a legal protection insurance policy. Consider joining the ADAC, Germany’s largest automobile club, similar to AAA in the US. Besides legal protection, ADAC offers other types of support for motorists in Germany.

In closing, we’d like to remind you of what we said in the beginning: Germany’s roads and highways are bursting at the seams. And now YOU want to add another vehicle to the mix. Make sure you have good insurance and be a considerate driver!

• Also see our Autokauf: German-English Glossary

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About the Authors

Peter Goldmann has 26 years experience as an insurance broker in Berlin, Germany. Over the years, he has also personally purchased or leased several cars in Germany.

Marco Marlia is the CEO and co-founder of MotorK, the most important lead generation company in Italy for the automotive industry. He holds a degree in economics, financial markets and institutions from Bocconi University of Milan, Italy. He is the co-author of Oltre Wikipedia (Beyond Wikipedia) and E-learning e Piccole e Medie Imprese (E-learning and small and medium-sized enterprises).

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