German police have arrested a Syrian refugee who allegedly asked ISIS to fund an attack using explosives-packed vehicles.

The unemployed 38-year-old migrant urged an ISIS contact via mobile phone message service Telegram to send him 180,000 euros, prosecutors said.

Police commandos raided his apartment in Saarbruecken near the French border around 2:00 am on New Year's Eve.

He was detained before being formally arrested on terror financing charges on New Year's Day.

The man's 'as yet undefined attack scenario' suggested turning cars into suicide bombs in Germany, France, Belgium and The Netherlands, police said.

On 19 December, 12 people were killed when Tunisian man Anis Amir drove a truck into crowds of people at a Christmas market in Berlin. ISIS claimed responsibility for that deadly rampage.

Police commandos raided the Syria refugee's apartment in Saarbruecken near the French border around 2:00 am on New Year's Eve.

Spiegel Online reported the plan was to re-paint the vehicles to make them look like police patrol cars.

It named the suspect as Hasan A and said his contact was located in the militant group's de facto capital of Raqqa, in Syria.

The man had entered Germany in December 2014 and applied for asylum in January 2015, obtaining refugee status and a residency permit, prosecutors said in a statement.

More than a million asylum-seekers entered Germany in 2015, while a further 300,000 were projected to have arrived over the past year.

In December 2016, he asked an ISIS contact in Syria to send him the money 'so he could purchase vehicles which he could load with explosives and which he wanted to drive into crowds...and blow up in order to kill unknown numbers of people who do not follow the Muslim faith'.

According to messages found on his phone, the man said each vehicle would be re-painted and packed with 400-500 kilogrammes (880-1,100 pounds) of explosives at a cost of 22,500 euros each, prosecutors said.

Prosecutors said the man 'admitted contact with the ISIS but denied terrorist motives' - suggesting he claimed to have attempted to defraud the extremist group.

Investigators said there was no evidence the suspect had already obtained and prepared any vehicles for an attack.

Police said 'an initial evaluation of the evidence did not point to a concrete threat to New Year's Eve events'.