Vettel had led for the majority of the race from pole position, but slithered out of contention from the lead on lap 52 of the 67-lap race.
The German hit his steering wheel in frustration at the mistake of crashing into the Turn 13 barriers.
Hamilton started 14th and took advantage of the downpour that soaked the circuit in the latter stages that caught out a number of drivers – including Vettel – and which led to the safety car to be deployed.
In the chaos, there was an instant reversal of fortune as a Ferrari 1-2 became a Mercedes 1-2 during the rain shower.
All race, teams were constantly trying to second guess the conditions and most drivers stayed out on dry-weather tyres while the storm passed and the circuit began to quickly dry up.
Hamilton in particular was helped by having pitted for fresh ultrasoft tyres not long before the rain began to fall, while many of his rivals were on more used tyres.
Valtteri Bottas finished in second, but had an attempt at overtaking his teammate when the safety car period ended on lap 57.
The Finn got alongside Hamilton at the Turn 6 hairpin, but Hamilton was just able to retain the lead. Just a lap later, Bottas was instructed to hold position.
Kimi Raikkonen took third place, ahead of Max Verstappen's Red Bull. The Dutchman had been one of those to gamble on intermediate tyres when the rain started to fall in just one section of the track.
Two laps later, Verstappen had returned back to the pits for dry tyres – the gamble failed – but then the whole circuit was doused.
Charles Leclerc and Fernando Alonso also switched to intermediate tyres, only to go back to slicks soon after, while Pierre Gasly was sent out on full wets and went into the gravel.
Nico Hulkenberg was fifth for Renault, ahead of Romain Grosjean's Haas and the two Force Indias of Sergio Perez and Esteban Ocon.
Sauber's Marcus Ericsson and Toro Rosso driver Brendon Hartley both benefitted from the chaotic conditions to scoop the final point-finishing positions, the latter after Carlos Sainz was handed a 10s penalty.
At the start, Vettel led away from Bottas, Raikkonen and Verstappen and was comfortably in control of his home race. By lap 25, Vettel held a five-second lead over Bottas when he came in to pit from ultrasofts to softs.
His Ferrari teammate Raikkonen was the first of the frontrunners to pit on lap 14 and once the first stops were over, the Finn held a slim lead over Vettel.
But the German was on tyres that were 11 laps fresher and Raikkonen was instructed by engineering director Jock Clear to led Vettel past.
Hamilton started on the soft tyre and made swift progress in the early laps to make his way through the field. After starting 14th, he was up to seventh by lap eight.
Daniel Ricciardo stopped after 27 laps due to a loss of power in the second Red Bull, having made his way up from the back of the grid to sixth in the early stages.
Both Williams drivers also failed to finish, Lance Stroll and Sergey Sirotkin stopping within two laps of each other in the closing stages.
20- 22 Jul 2018 Hockenheimring, Hockenheim
1 | 44 | Lewis Hamilton | MERCEDES | 67 | 1:32:29.845 | 25 |
2 | 77 | Valtteri Bottas | MERCEDES | 67 | +4.535s | 18 |
3 | 7 | Kimi Räikkönen | FERRARI | 67 | +6.732s | 15 |
4 | 33 | Max Verstappen | RED BULL RACING TAG HEUER | 67 | +7.654s | 12 |
5 | 27 | Nico Hulkenberg | RENAULT | 67 | +26.609s | 10 |
6 | 8 | Romain Grosjean | HAAS FERRARI | 67 | +28.871s | 8 |
7 | 11 | Sergio Perez | FORCE INDIA MERCEDES | 67 | +30.556s | 6 |
8 | 31 | Esteban Ocon | FORCE INDIA MERCEDES | 67 | +31.750s | 4 |
9 | 9 | Marcus Ericsson | SAUBER FERRARI | 67 | +32.362s | 2 |
10 | 28 | Brendon Hartley | SCUDERIA TORO ROSSO HONDA | 67 | +34.197s | 1 |
11 | 20 | Kevin Magnussen | HAAS FERRARI | 67 | +34.919s | 0 |
12 | 55 | Carlos Sainz | RENAULT | 67 | +43.069s | 0 |
13 | 2 | Stoffel Vandoorne | MCLAREN RENAULT | 67 | +46.617s | 0 |
14 | 10 | Pierre Gasly | SCUDERIA TORO ROSSO HONDA | 66 | +1 lap | 0 |
15 | 16 | Charles Leclerc | SAUBER FERRARI | 66 | +1 lap | 0 |
16 | 14 | Fernando Alonso | MCLAREN RENAULT | 65 | DNF | 0 |
NC | 18 | Lance Stroll | WILLIAMS MERCEDES | 53 | DNF | 0 |
NC | 5 | Sebastian Vettel | FERRARI | 51 | DNF | 0 |
NC | 35 | Sergey Sirotkin | WILLIAMS MERCEDES | 51 | DNF | 0 |
NC | 3 | Daniel Ricciardo | RED BULL RACING TAG HEUER | 27 | DNF | 0 |
Note - Sainz finished the race in 10th place but received a 10-second time penalty for overtaking under Safety Car conditions
1 | Lewis Hamilton | GBR | MERCEDES | 188 |
2 | Sebastian Vettel | GER | FERRARI | 171 |
3 | Kimi Räikkönen | FIN | FERRARI | 131 |
4 | Valtteri Bottas | FIN | MERCEDES | 122 |
5 | Daniel Ricciardo | AUS | RED BULL RACING TAG HEUER | 106 |
6 | Max Verstappen | NED | RED BULL RACING TAG HEUER | 105 |
7 | Nico Hulkenberg | GER | RENAULT | 52 |
8 | Fernando Alonso | ESP | MCLAREN RENAULT | 40 |
9 | Kevin Magnussen | DEN | HAAS FERRARI | 39 |
10 | Sergio Perez | MEX | FORCE INDIA MERCEDES | 30 |
11 | Esteban Ocon | FRA | FORCE INDIA MERCEDES | 29 |
12 | Carlos Sainz | ESP | RENAULT | 28 |
13 | Romain Grosjean | FRA | HAAS FERRARI | 20 |
14 | Pierre Gasly | FRA | SCUDERIA TORO ROSSO HONDA | 18 |
15 | Charles Leclerc | MON | SAUBER FERRARI | 13 |
16 | Stoffel Vandoorne | BEL | MCLAREN RENAULT | 8 |
17 | Marcus Ericsson | SWE | SAUBER FERRARI | 5 |
18 | Lance Stroll | CAN | WILLIAMS MERCEDES | 4 |
19 | Brendon Hartley | NZL | SCUDERIA TORO ROSSO HONDA | 2 |
20 | Sergey Sirotkin | RUS | WILLIAMS MERCEDES | 0 |
1 | MERCEDES | 310 |
2 | FERRARI | 302 |
3 | RED BULL RACING TAG HEUER | 211 |
4 | RENAULT | 80 |
5 | FORCE INDIA MERCEDES | 59 |
6 | HAAS FERRARI | 59 |
7 | MCLAREN RENAULT | 48 |
8 | SCUDERIA TORO ROSSO HONDA | 20 |
9 | SAUBER FERRARI | 18 |
10 | WILLIAMS MERCEDES | 4 |
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