What you need to know if you run a retail or wholesale business that buys, sells or exchanges motor vehicles in NSW. Includes information on conduct and licensing, as well as the forms you need to use.
On this page
Key information
- In NSW, people working in the motor vehicle industry have certain responsibilities and requirements they must meet.
- You must hold a current motor dealer licence and display your licence details at your place of business.
- You must keep prescribed records of all motor vehicles that are bought or sold.
- It is against the law to tamper with vehicle odometers.
Licensing
You need a motor dealer licence if your business involves buying, selling or exchanging motor vehicles as a retailer or a wholesaler. A wholesaler cannot sell vehicles to the public.
You can only offer or display vehicles at the business named on your licence (also known as ‘notified premises’) or at trade show displays.
A licensee can manage the business themselves or nominate another person to manage the business on their behalf. When a manager is employed to run the business, they must complete a manager’s consent form.
If you run a motor dealer business without a licence you could be fined $5,500 or face prosecution with a maximum penalty of $110,000.
If you continue to operate without a licence, you could get a penalty of up to $110,000, imprisonment for 12 months, or both.
Court prosecution may also result in motor vehicles or any proceeds of a sale being confiscated.
Laws to follow
There are federal and state laws that you must follow as a motor dealer business.
This page explains the rules you need to follow in simple language. You should refer to the legislation for specific legal requirements.
Australian Consumer Law
Under Australian Consumer Law, most products and services come with automatic consumer guarantees that the product or service purchased will work and do what is expected.
Motor dealers must provide a guarantee of clear title for any vehicle sold. You must also conduct a Personal Property Security Register check and record particulars on a sales notice before sale. See the Selling used vehicles section below for more information.
If your business fails to meet any of these guarantees, your customers have the right to:
- a repair, replacement, or refund
- cancel a service
- reimbursement for damages and loss.
Learn more about consumer guarantees under Australian Consumer Law.
Motor Dealers and Repairers Act
The Motor Dealers and Repairers Act sets out the rules that must be followed by all motor vehicle dealers in NSW.
The Act provides protection for consumers, outlines appropriate standards of conduct, and prevents misleading or dishonest dealings.
Motor Dealers and Repairers Regulation
The Motor Dealers and Repairers Regulation explains the rules for motor vehicle dealers in NSW.
It includes detailed information on licensing, record keeping and reporting requirements, fees, and business conduct.
Signage
You must have a sign showing your business licence details at your nominated place of business. It must be visible to everyone approaching the business.
Your sign must display:
- your name as it appears on the licence
- the words ‘licence number’ (or an abbreviation) followed by the licence number itself.
If your business name appears on the licence, it can also be included on the sign, but not in place of the licensee name.
If you don’t display the correct signage, you can be fined $330 or prosecuted up to $2,200.
Record Keeping
Motor dealers register
You need to keep a record of motor vehicles that are bought and sold. This is called a Form 1 motor dealers register.
You can keep a physical register or a digital one. Our sample motor dealers register can be used as a guide.
Details of each vehicle must be recorded with its own entry number.
Register entries must include the:
- date you received and sold the vehicle
- name and address of the person who supplied and purchased it (if trade owner, include motor dealer licence number)
- vehicle make, model, date built, and registration number (if any)
- engine and vehicle identification number (VIN)
- odometer reading at the time of purchase and sale
- type and serial number of sales notice
You must add entries in your register within one business day of the transaction.
Registers must be kept for six years after the last entry was made.
If you operate from more than one licensed premises, you must keep a register at each place.
You can be fined $550 or prosecuted up to $2,200 for failing to keep appropriate records.
How to keep a register
Keeping a physical register
A physical register needs to:
- be written in a book or series of books (with bound pages)
- must only be used for one kind of register and for no other purpose
- if you are using multiple books, each one must have a corresponding series number on its front (such as book 1, book 2 and so on).
You can alter or delete anything in the register by drawing a line through it, but the original entry must still be readable.
Keeping a digital register
A digital register must be created on software that:
- can be displayed and printed at each place of business on request
- clearly shows all entry details have been made and completed
- includes the date each record was made
A digital register must also keep a record of any changes. For example, if an entry is updated, the reason and date of the change/deletion is noted in the register.
Selling used vehicles
There are rules you must follow when you are selling a motor vehicle in NSW. This includes using certain forms, performing security checks, and adhering to cooling off periods (where applicable).
Motor dealer notices
Used (second-hand) and/or damaged vehicles displayed for sale must have a motor dealer notice (see below) attached to the inside of the windscreen or somewhere clearly visible. Demonstrator vehicles do not need this notice attached to the car, however you must provide it to the buyer at the time of sale.
Vehicles sold with a number plate (including demonstrator vehicles) must also include a roadworthy inspection report. This does not include vehicles sold at auction [anchor link].
There are different notices for different types of vehicles. Make sure you use the right form:
- used vehicles (Form 5 - demonstrator, cars, vans and trucks)
- used motorcycles (Form 7)
- used trailers and towable recreation vehicles under 4.5 tonnes (Form 9)
You cannot sell a motor vehicle without a motor dealer sales notice. This notice must be completed and signed by both the dealer and the buyer, and a copy given to the buyer.
You must keep motor dealer notices for three years after a sale is made.
Where notices are produced digitally, all copies including signed must be kept and filed by entry number order, and be available on demand for compliance inspection.
You can be fined $330 or prosecuted up to $2,200 :
- if a motor dealer notice is not displayed or completed correctly
- if the buyer is not given a copy of the motor dealer notice and/or roadworthy inspection report
- if you fail to keep appropriate records for the designated three-year period.
Motor dealer notices for damaged vehicles
Vehicles with existing damage must clearly display a notice to inform buyers.
This includes new vehicles that have suffered water damage, and body or frame damage.
A current roadworthy inspection report must also be given to the buyer at the time of sale, or if purchased at an auction, within 7 days.
There are different notices for different types of vehicles. Make sure you use the right form for the vehicle you’re selling:
- damaged new or second-hand vehicles (Form 6 - cars and trucks)
- damaged motorcycles (Form 8)
- damaged trailers and towable recreation vehicles (Form 10).
Personal property security register
If you deal in second-hand vehicles you must conduct a Personal Property Security Register (PPSR) search and include the search number on vehicle notices prior to sale.
The PPSR is a national database of security interests in personal property. This includes vehicles.
Use the PPSR online or call 1300 007 777 to find out if a vehicle has:
- money owing on it
- been stolen
- been written-off.
You must include the PPSR search number on the notice of any used vehicle sold.
You can be fined $330 or prosecuted up to $2,200 for failing to keep appropriate records.
Under Australian Consumer Law, you can also be fined $5,500 for using a false PPSR number, or prosecuted up to $10,000,000 as a corporation, or $500,000 as an individual.
For more information, see the Personal properties security for motor dealers page.
Selling vehicles at auction
For a vehicle to be sold at an auction, an auction notice (Form 11) must be displayed in the vehicle and given to the buyer when the vehicle is delivered.
Vehicles owned by a dealer that are being sold at an auction are covered by consumer guarantees under the Australian Consumer Law.
Vehicles being sold on behalf of an owner (on consignment) at an auction do not come with dealer or consumer guarantees, however they still need a guarantee of clear title.
Selling vehicles at a trade show
If you want to offer, display or advertise vehicles for sale at a trade show, you or your selling agent must hold a NSW motor dealer licence.
Interstate dealers and manufacturers
Trade show organisers can apply to the Minister for Small Business and Fair Trading for a temporary exemption to allow interstate businesses to offer or display motor vehicles at a trade show without holding a NSW motor dealer licence.
To apply for an exemption, email licensing and exemptions at NSW Fair Trading.
Applications must be submitted at least 8 weeks before the starting date of the trade show and provide sufficient reason to be there.
Interstate dealers who are granted the exemption:
- can only make or receive offers, but are not allowed to sell vehicles or take deposits
- must display signage that clearly shows:
- they normally do business outside of NSW
- their registered business name, address, and interstate licence number (if applicable).
For more information about exemption applications, refer to the trade show guidelines.
Vehicle finance and cooling off period
If someone buys a vehicle using a loan you arranged, there is a 'cooling off period' of one business day. This allows time for the buyer to change their mind without penalty.
You must complete a cooling off period notice (Form 12) with information about the dealer, vehicle, and credit provider.
The buyer must sign the notice. They can also choose to waive their right to a cooling off period on this form.
Consignment sales
A consignment sale is where a licensed motor dealer (consignee) agrees to sell a vehicle on behalf of an owner (consignor).
To do this you must have a written consignment agreement that includes:
- the name, address, and licence number of both parties
- a description of the vehicle, including registration number or vehicle identification number
- details of any loan, including the financial institution and amounts owed, or a statement that there is no claim against the vehicle
- the agreed price to be paid to the owner
- directions for payment of the agreed price, including any amount needed to pay money owed
- the start and end date of the consignment period.
A copy of the consignment agreement must be given to the owner and produced on request by an authorised officer.
After the sale, you must pay the owner the agreed sale amount (less any commission).
You can be fined $330 and prosecuted up to $2,200 if you fail to keep record of a consignment agreement.
Trust account requirements
You need to maintain a trust account at an authorised financial institution in NSW for any money received from consignment.
Once the vehicle is sold, you must deposit the full sales price into the account by the next business day.
Money can come out of the trust account to pay:
- the owner or credit provider listed in the consignment agreement
- a debt due to you (for commission or other charges) from the seller.
Payment from the account must be made within 14 days.
The trust account must be audited every 12 months and you must keep a trust receipt book, deposit book, and cash book or digital equivalents. Records of the account must be kept for at least six years after the last entry was made.
You can be fined up to $330 or prosecuted up to $2,200 if you fail to properly maintain a trust account.
Advertising
If you publish advertisements for motor vehicles on sale, you have certain obligations under Australian Consumer Law. This applies to both print and online advertising of new, second-hand and demonstrator vehicles.
Advertising charges
Advertisements must show the purchase price of motor vehicles (other than second-hand vehicles) and the cost of any dealer charges.
Ads must also show any statutory charges but do not have to specify a dollar amount. Statutory charges include:
- any tax or fee payable on registration or renewal of registration
- any premium or duty for insurance issued under the Motor Accidents Compensation Act.
Dealer charges refer to amounts other than the purchase price or statutory charges that are payable to the dealer before delivery of the vehicle.
Ads must not use the expression ‘on road costs’ or any other similar expression to describe statutory charges.
You can be prosecuted up to $2,200 if you fail to follow these requirements.
Price related advertising
The advertised price is an important factor in advertising and should not be misleading or deceptive.
Advertisements must specify the cash price of the vehicle when:
- the advertisement specifies or implies that the price of a second-hand or demonstrator vehicle has been reduced, or
- a reduction is related to the manufacturer’s recommended retail price.
Advertising an odometer reading
If an odometer reading is listed on an advertisement, it must be correct.
Advertising damaged vehicles
Where damaged vehicles are offered for sale, advertisements must include a disclosure statement saying that the vehicle has been damaged and whether or not the damage has been repaired (other than a second-hand motor vehicle). This message must be in writing, the same size and prominent.
You can be prosecuted to $2,200 if you fail to follow this requirement.
False and misleading advertisements
Under Australian Consumer Law, you must not engage in misleading or deceptive conduct (or engage in conduct that is likely to mislead or deceive).
Advertisements should not make statements or representations that are not true or likely to mislead or deceive. For example:
- when the term ‘drive away’ (or similar) is being used, the consumer should not expect to pay any more than the advertised price, and
- statements and/or pictures in advertisements should not mislead consumers as to the type or quality of the vehicle being offered.
If you break the law, you could receive a penalty of up to $500,000 as an individual. Corporations could be penalised $10,000,000, 10% of the annual turnover, or three times the value of the benefit gained by committing the offence – whichever is greater.
Advertising checklist
NSW Fair Trading requires motor dealer advertisements to include the:
- registration number of second-hand vehicles or entry/stock number if unregistered (where a price is specified)
- dollar amount of dealer charges for new cars
- statement that government and statutory charges apply (if not included in the price) for new cars.
You can be prosecuted up to $2,200 if you fail to follow this requirement.
Suspicious goods
If you suspect goods have been stolen or illegally obtained, you must inform the Secretary for Fair Trading.Failure to do so is an offence with penalties of up to $2,200.
Use our online contact form to inform the Secretary of suspected stolen or illegally obtained goods.
If an authorised officer (such as a NSW Police officer, Transport NSW officer or a Fair Trading Investigator) believes a motor dealer is in possession of a motor vehicle, part, or accessory that has been stolen or illegally obtained, the officer can issue a non-disposal notice.
A non-disposal notice stops you from altering, selling, or disposing the suspicious goods for a period of 14 days and can be further extended by application to the Local Court.
Failure to comply with a non-disposal notice can result in a penalty of up to $55,000.
Odometer tampering
Do not tamper with a vehicle odometer.
It’s against the law to interfere with an odometer reading by:
- altering the reading
- removing or replacing the odometer, or
- stopping it from working in any way.
You can only repair or replace an odometer if the Secretary is notified using the approved form, and the odometer reading is restored to reflect the accurate reading of the motor vehicle.
You can be issued with a penalty notice of $1,100 or face prosecution with a maximum penalty of $22,000.
If convicted by a court, you may also be liable to pay compensation to customers for any losses incurred between the sale price and fair price of the vehicle at the time of sale.