These guidelines have been developed to assist those working in the motor dealing industry. They are a guide only and not a substitute for legal advice. If you are unsure of your obligations you should refer to the Motor Dealers Act 1974 or seek legal advice.

You need a licence if you run a business which involves buying, selling, dismantling or exchanging new or second-hand motor vehicles and certain types of parts.

Motor vehicles include cars, trailers, motorcycles, tractors and commercial vehicles.

Commercial vehicles are vehicles made especially to carry goods, ten or more passengers and for industrial or agricultural use. Tractors, dual cab and crew cab vehicles are commercial vehicles.

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The type of licence you need depends on the nature of your business. The following provides a brief description of the licences offered:

Motor dealer licence – allows you to buy, sell or exchange any vehicle and to undertake any of the activities allowed by other types of licences listed below except that of a car market operator.

If you intend to buy, sell or exchange commercial vehicles, caravans, motorcycles, or trailers (with a tare weight of more than 250kg) you will need a dealer licence.

Auto-dismantler licence – allows you to demolish or dismantle vehicles or their parts, buy vehicles, sell substantially demolished or dismantled vehicles and to buy or sell certain prescribed parts and accessories. You require an auto-dismantler licence if you sell the following parts:

• airbags
• alloy 'mag' wheels
• boot lids
• bonnets
• car radio, tape, television, digital videodisc (DVD) or compact disc (CD) equipment
• chassis and major body sections
• electronic navigation equipment
• engines and engine blocks
• front and rear bumper bars
• front apron panels
• gearboxes and transmissions
• hatchback doors
• instrument clusters
• right and left back doors
• right and left front doors
• right and left front mudguards.

If you hold a repairer's licence under the Motor Vehicle Repairs Act 1980 and only buy or sell parts and accessories in the normal course of your repair business, you do not require an auto-dismantler's licence.

Wholesaler licence – allows you to carry on the business of selling vehicles to, or exchanging vehicles with, financiers and other licence holders. Wholesalers may purchase vehicles from the public but cannot sell directly or through auctions to the general public.

Motor vehicle parts reconstructor licence – allows you to carry on the business of buying or acquiring for the purpose of selling, exchanging or reconstructing parts and accessories of motor vehicles such as:

• airbags
• engines and engine blocks
• gearboxes and transmissions
• instrument clusters.

Motor vehicle consultant licence – allows you to advise others about where they can purchase a particular vehicle.  A motor vehicle consultant cannot be a party to the sale of any particular vehicle.

Car market operator licence – allows you to provide a site from which other people make private sales of second-hand vehicles.

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An application must be lodged with Fair Trading. To be granted a licence, you must meet the following criteria:

• be at least 18 years of age
• be a fit and proper person
• not be a disqualified person as defined under the Act
• not be bankrupt
• have approval from the relevant local council
• have appropriate knowledge and expertise for the purposes of the licence
• have sufficient financial resources to carry on the business.

You can obtain an application form and further information from the Business Licence Information Service on 13 32 20 or visit blis.fairtrading.nsw.gov.au

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All licensees must display a sign in their place or places of business to which the licence applies. The sign must:

• contain the words ‘licensed motor dealer’, ‘licensed auto-dismantler’, ‘licensed wholesaler’, ‘licensed motor vehicle parts reconstructor’, ‘licensed car market operator’ or ‘licensed motor vehicle consultant’ depending on the licence you hold
• contain the words ‘licence number’ followed by the number
• have lettering at least 50 millimetres high.

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You are not required to hold a licence if your business is conducted only in relation to buying, selling or exchanging the following:

• cranes, hoists or conveyors, as defined by the Occupational Health and Safety Act 2000
• motor vehicles or second-hand motor cycles (not including new motor cycles) that are incapable of being registered in NSW
• excavators, road graders, road rollers, bulldozers, fork lift trucks or other equipment other than a tractor and which is not constructed on a chassis of a type normally used in the construction of a motor lorry
• motor vehicles constructed or adapted for road construction or maintenance, including cleansing, sweeping or watering roads
• trailers that have a tare weight of 250 kg or less.

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Unlicensed motor dealing in NSW is an offence and can result in the issue of a penalty notice of $5,500 or prosecution with a maximum penalty of $110,000. A court may also order a person convicted of unlicensed motor dealing to forfeit any proceeds made from any vehicles sold.

It is also an offence in NSW to interfere with an odometer reading by either altering the reading, removing or replacing the odometer or rendering the odometer inoperative or inactive by any means.

Odometer interference can result in prosecution with a maximum penalty of $110,000 and you may also be liable to pay the losses of a purchaser through civil action.

You may seek written approval from Fair Trading to alter or replace an odometer reading of a motor vehicle in accordance with the terms of that approval.

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