Seven people, including two police officers, were injured in the blast that threw the vehicle into the air.
Multiple houses and cars were damaged in the explosion, including two police vehicles. Dozens of officers and multiple ambulances were called to the aftermath.
"There's nothing left of the car that exploded. The engine flew 30 metres," a police spokesman said.
The full cost of the damage has yet to be determined. Houses as far as 500 metres from the blast were also hit by debris.
Police were called to the scene when the 49-year-old, who worked with explosives, threatened to harm his family late on Saturday night. Following the argument, he drove off. The wife and one of his daughters went to the neighbours. The other daughter was not at home at the time.
Police were waiting as the man came back home. It was then that he detonated the car, sending it up into the air.
What drove the man to take such drastic action is not yet clear.
"The people here are in shock and we haven't been able to question anybody," police spokesperson Wolfgang Keller said.
The neighbourhood has since been evacuated and the city of Homberg has provided housing for those affected. Police are warning those in the area not to use mobile phones for fear that unspent fuses could lead to further damage.