Should I pay cash for a vehicle?
In Germany there is an upper limit for cash payments - under one condition
Many people pay for their car in cash, often with banknotes worth several thousand euros. If the new vehicle costs more than 10,000 euros, since 2017 this has only been possible in Germany with presentation of ID. In doing so, the German government implemented an EU directive.
The law states that payments over 10,000 euros are no longer possible anonymously. This is intended to combat money laundering and the financing of terrorism. But experts doubt its effectiveness against terrorism. The shadow economy specialist Friedrich Schneider from the University of Linz said to the "Frankfurter Allgemeine Zeitung": "That brings almost nothing." Especially gold dealers, jewelry dealers, car dealerships and the art trade are affected by the new law.
An upper limit for cash is common in Europe
In southern European countries such as Italy, Spain and Greece there has been an upper limit for cash payments for a long time. The Scandinavian countries also introduced an upper limit. In practice, however, there are exceptions. Together with Austria, Slovenia, Lithuania, Latvia and Iceland, Germany was one of the few countries that did not yet have an upper limit.
In general, politics aims to reduce cash flows. For this, it rewards merchants who no longer accept any cash amounts over 10,000 euros. You then have less administrative effort.
The EU is even discussing a general ban on cash transactions in excess of 5,000 euros. Federal Finance Minister Wolfgang Schäuble can imagine this practice, but the EU has so far no concrete plans for this.
Cash is popular with Germans. According to a GfK survey last year, 75 percent said that they would rather pay in cash than electronically if they had a choice. If you want, you can still pay amounts of 10,000 euros or more with banknotes - all you have to do is identify yourself.
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