Corona help for used car dealers
The renewed lockdown in the wake of the coronavirus pandemic also poses new questions for car dealers. In this article, we have summarized what you need to know now to receive financial corona aid from the state and other support.
Lockdown forces used car dealers to close their showrooms
While the car trade continues to take place online, for example on car exchanges, car dealers are forced to close their showrooms. In many places, however, garages are allowed to remain open. In some cases, the collection of purchased cars may also be organized via these workshops, for example via a car auction. However, this depends on the respective federal state.
Car dealers receive state support
The state is supporting companies during this time with so-called "corona aid". Many companies qualify for this aid. From small used car dealers to large car dealership groups. You can find out which aid you can claim here.
What are corona aids?
There are two different types of corona aid: Monthly aid (e.g.: November & December aid) and bridging aid (currently bridging aid II & III). These terms summarize the financial support provided by the state.
What is the difference between November, December and bridging aid?
Bridging aid covers part of the fixed costs (e.g. rent, depreciation and financing costs, as well as an entrepreneur's salary). In many cases, the November and December aid is only available to the hotel, catering and similar sectors, as these were already closed at the beginning of November by decision of the federal states.
Most companies in the automotive sector (such as car dealerships, used car dealers, exporters of dealer vehicles) are affected by Bridging Aid II & III, as they have had to remain closed since 16.12.2020.
Monthly aid (e.g. December aid)
Who receives the monthly aid?
Car dealerships and car dealers in general are not normally entitled to this aid, as only companies and solo self-employed persons affected by the closures at the beginning of November receive the aid.
Used car dealers receive bridging aid
Who receives the bridging assistance?
Car dealerships, independent car dealers, car repair shops and many other companies that are experiencing a drop in sales due to Corona can receive the bridging aid.
How can I prove a drop in sales due to coronavirus?
There are three ways to prove a decline in sales due to corona:
Option 1: You have recorded a drop in sales of at least 50% in two consecutive months.
Option 2: You must demonstrate an average drop in sales of at least 30% from April to August 2020.
Option 3: You generated 40% less sales on average between November and December 2020
What is the difference between bridging assistance II and III?
There is no difference in the content of Bridging Aid II and III, except for the period for which they apply. Bridging Aid II is valid from September to December 2020, Bridging Aid III from January to June 2021.
How much money do I receive as a used car dealer?
As a rule, you will receive EUR 200,000 as bridging assistance. In special cases, the support can be increased to up to EUR 500,000. However, as things stand at present, only uncovered fixed costs will be reimbursed.
What are fixed costs that are reimbursed?
Typical fixed costs that are reimbursed are rent, financing costs and depreciation (up to 50%). The amount of the reimbursement depends on your drop in turnover:
Decrease in sales 0% - 30% = 0% fixed cost reimbursement
Decrease in sales 31% - 50% = 40% fixed cost reimbursement
Decrease in sales 51% - 70% = 60% fixed cost reimbursement
Decrease in sales 71% - 100% = 90% fixed cost reimbursement
Example: You have a turnover of EUR 10,000 in December 2020 after having a turnover of EUR 50,000 in December 2019. This corresponds to a drop in turnover of 80%, which is why you would be reimbursed 90% of your fixed costs if your fixed costs are not covered by the turnover actually generated.
How do I apply for bridging assistance?
The aid must be applied for exclusively via a so-called verifying third party, e.g. tax consultants and lawyers. The costs of this application may also be eligible for reimbursement.
What is the maximum amount of money I can receive as a used car dealer?
Overall, there are no limits on payouts. However, there are different responsibilities for disbursements of different amounts. However, you can receive disbursements of up to EUR 1 million without additional checks by the federal government or the EU.
What needs to be considered?
It is important to note that other state benefits are taken into account. This means that bridging assistance, short-time working allowance and social benefits can reduce the amounts you finally receive.
