Car dealer licence in Germany: requirements for traders
Car dealer licence in Germany: trade registration, reliability check, VAT number, red plates and what foreign dealers need to buy from German sellers.
· 8 min read
There is no special car dealer licence in Germany. Buying and selling used cars is a trade you register with the local trade office (Gewerbeanmeldung), and because it is a monitored trade under § 38 of the Trade Regulation Act (GewO), the authority checks your reliability after registration. On top come tax registration and a VAT ID, and, if you want them, red dealer plates. Foreign dealers need no German registration to buy in Germany.
Do you need a car dealer licence in Germany?
You do not need a licence or permit to trade used cars in Germany, but you must register the business and pass a reliability check. Under § 38(1) GewO, the buying and selling of motor vehicles is listed as a monitored trade (überwachungsbedürftiges Gewerbe). This means:
- you register the trade like any other business;
- the authority must check your reliability promptly after registration, normally by requesting a certificate of good conduct (Führungszeugnis) and an extract from the central trade register (Gewerbezentralregister);
- if you are found unreliable, for example because of relevant criminal convictions, the trade can be prohibited.
A permit is needed only for some activities around car sales:
| Activity | Requirement |
|---|---|
| Buying and selling used cars | Trade registration, reliability check under § 38 GewO |
| Brokering consumer loans or finance | Permit under the GewO for credit brokerage (§ 34c) |
| Selling insurance (e.g. GAP, warranty insurance as broker) | Permit or registration under § 34d GewO, unless covered by an exemption for ancillary intermediaries |
| Running a workshop that repairs cars | Entry in the crafts register (Handwerksrolle); motor vehicle technician is a master-craft trade |
If you only trade cars and buy repairs from independent workshops, the registration and reliability check are all you need on the trade side.
How do I register as a car dealer in Germany?
You register as a car dealer in Germany in a few administrative steps, most of which can be done online in many municipalities.
- Choose a legal form. Sole trader (Einzelunternehmen), partnership, or a company such as a GmbH or UG. A GmbH must be entered in the commercial register (Handelsregister) through a notary before trading.
- Register the trade (Gewerbeanmeldung) at the trade office of the municipality where the business is located. The fee is set locally and is usually modest.
- Provide reliability documents when the authority asks: certificate of good conduct and trade register extract.
- Register for tax. The trade office informs the tax office; you then submit the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) electronically via ELSTER and receive a tax number.
- Apply for a VAT identification number (USt-IdNr.) from the Federal Central Tax Office (BZSt). You need it to buy VAT-free from dealers in other EU countries.
- Join the chamber. Membership of the local Chamber of Industry and Commerce (IHK) follows automatically from registration.
- Arrange insurance and premises: liability, stock and trade plate insurance, and planning permission for using the site as a car lot where required.
The small-business VAT exemption under § 19 UStG (prior-year turnover up to €25,000 and current-year turnover up to €100,000 since 2025) is rarely useful for car dealers: a handful of cars exceeds the limits, and without VAT registration you cannot use the margin scheme properly or deduct input VAT.
For car dealers
Know your margin before you buy
MyCarDealer compares any car from an auction or listing with the market in your country and shows the net margin after VAT, transport and costs – and the maximum bid.
Request accessVAT rules German car dealers must know
German car dealers mostly sell used cars under the margin scheme in § 25a UStG (Differenzbesteuerung), which implements Articles 311–343 of the EU VAT Directive. VAT is charged only on the dealer's margin, at the standard rate of 19%, provided the car was bought within the EU from a private person, from another margin-scheme dealer or in another situation where no VAT was charged.
Key points:
- Cars bought from VAT-registered businesses with VAT shown separately are sold with full VAT, not under the margin scheme.
- Invoices for margin-scheme sales must not show VAT separately.
- Sales to dealers in other EU countries can be VAT-free intra-community supplies if the buyer's VAT ID is valid and the car leaves Germany.
Our guides to the VAT margin scheme for used cars and to intra-community supplies of cars explain the details.
How does a dealer get red plates in Germany?
A dealer gets red plates (rote Kennzeichen, also called 06 plates) from the local vehicle registration authority, which issues them to reliable vehicle manufacturers, dealers and workshops under § 41 of the Vehicle Registration Regulation (FZV). They allow unregistered vehicles to be used for test drives, trial drives and transfer drives.
What you need:
- trade registration showing the motor trade;
- proof of reliability (certificate of good conduct, trade register and driving-points register information may be requested);
- motor liability insurance for the plates;
- evidence that you regularly need to move unregistered cars.
The plate number for commercial users starts with "06". With the plates you receive a vehicle log book (Fahrzeugscheinheft) and must keep continuous records of every journey: plate, date, driver, VIN and route, retained for a year. Authorities can withdraw the plates if they are misused, for example for private driving or for days-long "test drives".
For occasional moves, anyone can obtain short-term plates (Kurzzeitkennzeichen) under § 42 FZV, which are valid until the end of the fifth day after issue. Cars leaving Germany for good usually go on export plates; see our guide to German export plates.
Other compliance duties for German dealers
Beyond registration, a German used car dealer has ongoing duties that matter in practice:
- Consumer warranty. Sales to consumers carry a statutory liability for defects, which for used cars can be shortened to one year by contract. Excluding it altogether is only possible in sales to businesses.
- Anti-money laundering. Dealers in goods who accept or make cash payments of €10,000 or more must identify the customer and apply due-diligence and risk-management duties under the Geldwäschegesetz.
- Price and advertising rules. Adverts to consumers must show the total price including VAT; new-car adverts also need fuel consumption and CO2 information.
- Bookkeeping. Separate records for margin-scheme and regular sales, with purchase and sale price per car.
- Data protection. Customer files and test-drive ID copies fall under the GDPR.
Can a foreign company buy cars in Germany at trade prices?
A foreign company can buy cars in Germany at trade prices without any German registration, provided it is a genuine business with a valid VAT number. German dealers and auction houses sell to foreign traders every day; what they need from you is proof that you are a business and that the car will leave Germany.
- Valid EU VAT number, checked by the seller in VIES, plus your company register extract.
- Net purchase for VAT-qualifying cars: the German seller invoices without VAT as an intra-community supply. Margin-scheme cars are sold with the margin VAT included, which you cannot reclaim.
- Proof of arrival. German sellers need evidence that the car reached another EU country, usually a confirmation of arrival (Gelangensbestätigung) under § 17b of the VAT Implementing Regulation, or alternative proof such as transport documents or the registration in the destination country. Expect a deposit equal to the German VAT until you deliver it.
- Transport by your own carrier or on export plates.
- Trade-only access. Many trade auctions and remarketing platforms require registration with company documents before you can bid.
Our checklist for buying a car in Germany as a foreign dealer covers the full process. Before you bid, compare the German purchase price with what the car sells for in your own market after transport and VAT; MyCarDealer calculates that margin and the maximum bid for you, and you can request dealer access.
Frequently asked questions
Do you need a licence to sell cars in Germany?
No special licence is needed. You must register the trade with the local trade office, and because car trading is a monitored trade under § 38 GewO, the authority checks your reliability afterwards. Permits are only required for side activities such as brokering finance or insurance.
How do I register as a car dealer in Germany?
Choose a legal form, register the trade at the municipal trade office, provide a certificate of good conduct when requested, register with the tax office via ELSTER and apply for a VAT ID at the Federal Central Tax Office. A GmbH must also be entered in the commercial register.
How does a dealer get red plates in Germany?
Apply to the local vehicle registration authority with your trade registration, proof of reliability and insurance. Red "06" plates under § 41 FZV may only be used for test, trial and transfer drives, and every journey must be recorded in the vehicle log book.
Can a foreign company buy cars in Germany at trade prices?
Yes. A foreign business with a valid EU VAT number can buy from German dealers and auctions, and VAT-qualifying cars are invoiced net if the car leaves Germany. The German seller will want proof of arrival and often a deposit until you provide it.
Do I need a German company to buy cars at German auctions?
No. Most German trade auctions accept registered foreign dealers. You will need your company documents, a VAT number and sometimes a deposit, but not a German establishment.