The astonished neighbour, 61, who hadn't used the garage for the past two years, found the car under a thick layer of dust, said police in Hildesheim, near Hannover.
In June 2007, the woman dropped the car at a local mechanic's workshop for a service.
They agreed the mechanic would return the car to her apartment building and park in the garage leading off the courtyard.
The mechanic left the car keys and the bill into the letterbox as they had agreed.
But when the woman went to use the car to go shopping, she found her garage empty. She immediately called the police.
The police in the German state of Lower Saxony assumed the car had been stolen and searched for it without success.
As it turned out, there were about 40 private garages in the building and the mechanic had chosen the wrong one. There it stayed for two years.
The woman will have to return the insurance money she collected, the police statement said. But she is not expected to have to pay back the interest.