If you have outstanding invoices as a car dealer, you will eventually need to write a payment reminder. But how do you correctly formulate a dunning notice? Which deadlines apply? And from when can you charge dunning fees or default interest? This guide explains the entire dunning process step by step – with templates, legal foundations under the German Civil Code (BGB), and concrete tips specifically for the automotive trade and workshop business.
What is a payment reminder? Definition and distinction
A payment reminder is the formal request to a debtor to make an overdue payment. It serves to put the debtor in default – an important legal prerequisite for claiming default interest and damages.
Payment reminder vs. dunning notice: the difference
In practice, the terms are often used interchangeably, but there is a subtle difference:
| Feature | Payment reminder | Dunning notice |
|---|---|---|
| Tone | Friendly, informal | Firm, formal |
| Legal effect | No automatic default consequences | Puts debtor in default (Section 286 BGB) |
| Typical use | First reminder after due date | After unsuccessful payment reminder |
| Dunning fees | None | Possible from 1st dunning notice |
| Deadline setting | Optional, recommended | Mandatory with specific date |
Good to know: Legally, a single dunning notice is sufficient to put the debtor in default. The widely used 3-stage dunning procedure is not legally required but has established itself as a customer-friendly standard in practice – especially in the automotive trade, where long-term customer relationships matter.
When do I need to write a dunning notice? Deadlines and default
Before you write a dunning notice, certain prerequisites must be met. The German Civil Code (BGB) regulates default very precisely in Section 286.
Prerequisites for debtor default under Section 286 BGB
- Due claim: The invoice must be due – the payment deadline must have passed
- Ability to perform: Payment must be possible for the debtor
- Dunning notice or statutory default: Either a dunning notice or automatic default entry
- No right to refuse performance: The debtor must not have legitimate objections (e.g., defects)
When does default occur automatically – even without a dunning notice?
In certain cases, the debtor enters default automatically, without you needing to write a dunning notice:
| Situation | Legal basis | Example in car trade |
|---|---|---|
| 30 days after due date and receipt of invoice | Section 286 (3) BGB | Workshop invoice with payment term “due immediately” |
| Calendar-determined payment date | Section 286 (2) No. 1 BGB | Purchase contract: “Payment by March 15, 2026” |
| Serious and final refusal to pay | Section 286 (2) No. 3 BGB | Customer declares in writing they will not pay |
The 3-stage dunning system: from reminder to debt collection
The proven dunning procedure consists of three to four escalation stages. Each stage intensifies the tone and consequences. As a car dealer, you should apply this system consistently – it protects your liquidity and documents your efforts for a possible judicial dunning procedure.
Stage 1: Payment reminder (friendly)
The payment reminder is the first step and is typically sent 7–14 days after the payment deadline has passed. The tone is polite and considerate – often the customer has simply forgotten to pay.
- Sent: 7–14 days after due date
- Tone: Friendly, understanding
- New payment deadline: 7–10 days
- Dunning fees: None
- Default interest: Not yet charged
Stage 2: First dunning notice (firm)
If the customer does not respond to the payment reminder, the first official dunning notice follows. The tone becomes noticeably more matter-of-fact and you reference legal consequences.
- Sent: 7–14 days after payment reminder
- Tone: Factual, firm
- New payment deadline: 7–10 days
- Dunning fees: 2.50 – 5.00 EUR (reasonable)
- Default interest: Charged from now on
Stage 3: Second dunning notice (emphatic)
The second dunning notice is the final warning before escalation. The tone is serious and you announce specific consequences.
- Sent: 7–14 days after 1st dunning notice
- Tone: Serious, emphatic
- New payment deadline: 5–7 days
- Dunning fees: 5.00 – 10.00 EUR
- Reference to debt collection agency/attorney and judicial dunning proceedings
Stage 4: Final dunning notice before debt collection (ultimatum)
The final dunning notice is the definitive ultimatum. Here you announce the handover to a debt collection agency or initiation of judicial dunning proceedings.
- Sent: 5–7 days after 2nd dunning notice
- Tone: Formal, unambiguous
- Final payment deadline: 5 days
- Complete listing of all dunning fees and default interest
- Specific announcement: debt collection, attorney, or judicial dunning proceedings
Required information: what must a dunning notice contain?
For a dunning notice to be legally effective and put the debtor in default, it must contain certain information. Missing details can, in the worst case, render the dunning notice ineffective.
Checklist: required information in every dunning notice
- Sender details: Company name, address, contact details of the creditor
- Recipient details: Full name and address of the debtor
- Invoice reference: Invoice number, invoice date, original payment deadline
- Outstanding amount: Exact claim amount in euros
- Dunning fees: Breakdown of dunning costs to date (if charged)
- Default interest: Calculated interest amount with stated interest rate
- Total claim: Sum of invoice amount + dunning fees + default interest
- New payment deadline: Specific date (not “within 14 days”)
- Bank details: IBAN and BIC for the transfer
- Consequences: Reference to next escalation stage in case of non-payment
- Dunning stage: Labeled as “payment reminder,” “1st dunning notice,” etc.
Tip: Use a professional invoicing software that automatically creates dunning notices with all required information. This avoids formal errors and saves valuable time. Get started quickly with free dunning notice templates.
Dunning fees: what are you allowed to charge?
Dunning fees are default damages that you may charge the debtor as reimbursement of expenses. However, there are clear limits – excessive dunning fees are invalid.
Permissible dunning fees at a glance
| Dunning stage | Recommended fee | Maximum permissible | Justification |
|---|---|---|---|
| Payment reminder | 0.00 EUR | 0.00 EUR | Friendly reminder, no costs |
| 1st dunning notice | 2.50 EUR | approx. 5.00 EUR | Postage, paper, time expenditure |
| 2nd dunning notice | 5.00 EUR | approx. 7.50 EUR | Renewed effort, increased urgency |
| Final dunning notice | 7.50 EUR | approx. 10.00 EUR | Registered mail recommended, greater effort |
Additionally recoverable costs
In addition to the dunning fees themselves, you can claim the following default damages:
- Postage costs: Actual costs for letter or registered mail
- Information costs: Costs for address determination if whereabouts unknown
- Default interest: Statutory interest (see next section)
- Flat-rate for B2B: 40 EUR default flat rate per Section 288 (5) BGB
Calculating default interest: Section 288 BGB explained
Once the debtor is in default, you are entitled to default interest. The calculation is precisely regulated by law and differs depending on the customer type.
Default interest rates under Section 288 BGB
| Customer type | Interest rate | Calculation (as of 2026) | Legal basis |
|---|---|---|---|
| Consumer (B2C) | Base rate + 5 percentage points | Current base rate + 5% p.a. | Section 288 (1) BGB |
| Business (B2B) | Base rate + 9 percentage points | Current base rate + 9% p.a. | Section 288 (2) BGB |
Calculation example: default interest for a vehicle purchase
Example: A private customer buys a used car for 15,000 EUR. The invoice has been overdue for 45 days. The current base interest rate is 2.27% (as of January 2026).
Calculation: Default interest rate = 2.27% + 5% = 7.27% p.a.
Default interest = 15,000 EUR x 7.27% / 365 x 45 days = 134.35 EURFor a B2B transaction (dealer to dealer), it would be: 15,000 EUR x 11.27% / 365 x 45 = 208.44 EUR – plus 40 EUR default flat rate.
Tone and wording: templates for every dunning stage
The right tone is crucial – especially in the automotive trade, where you want to retain customers long-term. Here you will find proven formulations for each stage.
Payment reminder: sample wording
“Dear [Name], it has surely escaped your attention that invoice no. [Number] dated [Date] for [Amount] EUR is still outstanding. The payment deadline was [Date]. We kindly ask you to transfer the outstanding amount to our account by [new date]. Should your payment have crossed with this reminder, please disregard this notice.”
1st dunning notice: sample wording
“Dear [Name], despite our payment reminder of [Date], invoice no. [Number] for [Amount] EUR remains unpaid. We must therefore emphatically request that you settle the total amount of [Amount + dunning fee] EUR by [Date] at the latest. In the event of non-payment, we will be obliged to charge default interest per Section 288 BGB and initiate further dunning steps.”
Final dunning notice: sample wording
“Dear [Name], despite repeated requests, invoice no. [Number] dated [Date] remains unpaid. The total claim including dunning fees and default interest now amounts to [Total amount] EUR. We hereby set a final deadline of [Date]. Should no payment be received by this date, we will, without further notice, engage a debt collection agency or initiate judicial dunning proceedings. Any additional costs incurred will be at your expense.”
Writing dunning notices in the automotive trade: special situations
As a car dealer, you encounter specific situations that require particular attention in the dunning process. Here are the most common scenarios and how to handle them.
Vehicle purchase with installment payments
When a customer pays the purchase price in installments and misses a payment, special rules apply:
- Dunning per installment: Dun each missed installment separately with its own due date
- Acceleration clause: Check whether the purchase contract contains a clause that makes the remaining balance immediately due upon payment default
- Right of withdrawal: Under Section 323 BGB, you can withdraw from the purchase contract if the customer fails to pay despite a dunning notice with deadline
- Retention of title: If retention of title was agreed, the vehicle remains your property until fully paid
Outstanding workshop invoices
Workshop invoices are due immediately upon acceptance of the repair (Section 641 BGB). Particulars:
- Contractor’s lien: Under Section 647 BGB, you have a lien on the repaired vehicle – as long as it is still in your possession
- Right of retention: You may retain the vehicle until the invoice is paid
- Cost estimate issues: If the customer received a cost estimate and actual costs differ, they may raise objections – clarify this before sending a dunning notice
- Warranty: If the customer claims defects in the repair, you should first resolve the complaint before dunning
Margin taxation per Section 25a UStG
For vehicle sales under margin taxation, there are no special features in the dunning process – the dunning notice always refers to the gross selling price. However, ensure that your invoices were correctly created to preempt objections.
Debt collection, attorney, or judicial dunning proceedings?
If all dunning stages have been unsuccessful, you have three escalation options. Each has its advantages and disadvantages.
Comparison of escalation options
| Option | Costs | Duration | Suitable for |
|---|---|---|---|
| Debt collection agency | Success-based or fixed fee | Weeks to months | Smaller claims (under 5,000 EUR) |
| Attorney | RVG fees (based on amount in dispute) | Weeks to months | Complex cases, larger claims |
| Judicial dunning proceedings | Court fees (low, based on amount in dispute) | Several weeks | Undisputed claims of any amount |
Judicial dunning proceedings: how it works
Judicial dunning proceedings are a standardized procedure that you can carry out without an attorney. It is particularly effective when the debtor does not dispute the claim.
Step 1: Apply for a dunning order
Submit the application for issuance of a dunning order to the competent dunning court. In most German federal states, this can be done online via mahngerichte.de. Costs: for a claim of 5,000 EUR, court fees of approximately 36 EUR apply.
Step 2: Service of the dunning order
The court reviews the application formally (not substantively) and serves the dunning order on the debtor. The debtor now has 14 days to file an objection or pay.
Step 3: Enforcement order
If the debtor does not file an objection and does not pay, you apply for an enforcement order. This is enforceable like a judgment – you can commission a bailiff with it.
Step 4: Enforcement
With the enforcement order, you can initiate enforcement: account garnishment, wage garnishment, or asset seizure by the bailiff.
Automating the dunning process with AutoPult
Manually writing dunning notices, entering deadlines in your calendar, and calculating default interest by hand – this costs valuable time that you could better spend on your daily business. AutoPult automates your entire dunning process and ensures that no outstanding claim is overlooked.
What AutoPult does for your dunning process
- Automatic deadline monitoring: AutoPult identifies overdue invoices and starts the dunning process at the right time
- Multi-stage dunning run: Payment reminder, 1st dunning notice, 2nd dunning notice, and final dunning notice are automatically created at the correct intervals
- Legally compliant templates: All dunning notices automatically contain all required information – including correctly calculated default interest and dunning fees
- Default interest calculator: Automatic calculation per Section 288 BGB using the current base interest rate – separated by B2C and B2B
- Sending by email or post: Send dunning notices directly from the system – digitally or as a letter
- Complete documentation: Every dunning step is logged – the perfect foundation for judicial dunning proceedings
- Integration with accounting and banking: Incoming payments are automatically detected and open dunning notices are closed
Save time: Car dealers who automate their dunning with AutoPult reduce manual effort by up to 90% and shorten the average payment duration by 12 days. Try AutoPult for free now and never forget a dunning notice again.
Common mistakes when writing dunning notices
Even experienced car dealers make dunning mistakes that, in the worst case, jeopardize the claim. Here are the most common pitfalls:
| Mistake | Problem | Solution |
|---|---|---|
| No specific deadline | “Please transfer promptly” does not establish default | Always specify a concrete date |
| Incorrect invoice details | Debtor cannot identify the claim | Always include invoice number, date, and amount |
| Excessive dunning fees | Invalid and contestable | Maximum 2.50–5.00 EUR per dunning notice |
| Threatening or offensive tone | Can be considered coercion | Remain factual and professional |
| Dunning despite legitimate objections | Damages the customer relationship, legally ineffective | Resolve complaints first, then dun |
| Default interest incorrectly calculated | Excessive interest is not enforceable | Always use the current base interest rate |
| Waiting too long | Statute of limitations (3 years, Section 195 BGB) threatens | Start dunning immediately after deadline expires |
Frequently Asked Questions about writing dunning notices
How many dunning notices do I have to write before engaging a debt collection agency?
Legally, a single dunning notice is sufficient to put the debtor in default. After that, you can immediately engage a collection agency or initiate judicial dunning proceedings. In practice, however, three dunning stages have proven effective for preserving the customer relationship and documenting your payment diligence.
May I charge fees for every dunning notice?
Yes, from the first official dunning notice you may charge reasonable dunning fees. These must reflect the actual expenditure (postage, paper, labor time). Recommended: 2.50 to 5.00 EUR per dunning stage. The payment reminder should remain free of charge.
From when may I demand default interest?
You may charge default interest from the moment the debtor is in default – i.e., from receipt of the first effective dunning notice or after expiration of 30 days after due date and invoice receipt (with corresponding notice on the invoice). The interest rate is base rate + 5% for consumers and base rate + 9% for businesses per Section 288 BGB.
Does a dunning notice have to be sent by post or is an email sufficient?
In principle, there is no formal requirement for dunning notices – an email is just as legally valid as a letter. However, a letter (especially registered mail) provides better proof of receipt, which can be important in a dispute before court. Recommendation: payment reminder by email, from the 1st dunning notice by letter, final dunning notice by registered mail.
What do I do if the customer disputes the claim?
If the customer disputes the claim (e.g., due to defects in the vehicle or the repair), you should first review the objections. If they are unjustified, document this in writing and continue the dunning process. For legitimate objections, you must first rectify or reach an agreement. When in doubt, legal counsel from an attorney is recommended.
How long can I pursue an outstanding claim?
The standard limitation period is three years under Section 195 BGB, starting at the end of the year in which the claim arose. An invoice from March 2026 therefore becomes time-barred on December 31, 2029. A dunning order or lawsuit suspends the limitation period.
Conclusion: professional dunning secures your liquidity
Writing dunning notices is part of everyday business for every car dealer – whether for a vehicle purchase, a workshop invoice, or spare parts deliveries. With the right system of payment reminders, graduated dunning stages, and clear deadlines, you secure your claims in a legally sound manner while preserving the customer relationship.
The key points summarized:
- A payment reminder is the friendly first step – free of charge and without legal consequences
- From the 1st dunning notice, you put the debtor in default and may charge dunning fees and default interest
- Adhere to the statutory provisions on dunning fees (max. 2.50–5.00 EUR) and default interest (Section 288 BGB)
- Consider the specifics of the automotive trade: retention of title, contractor’s lien, and installment payments
- Automate your dunning process with AutoPult to save time and never miss a deadline
