Are you thinking of selling a few cars this year? Be careful – you could unknowingly be breaking the law. Under the Motor Dealers and Repairers Act 2013, selling multiple vehicles in a year might classify you as a motor dealer, requiring you to hold a proper license.
“11 Unlicensed motor dealers
A person must not carry on, or advertise that the person carries on or is willing to carry on, the business of a motor dealer unless—
(a) the person is the holder of a motor dealer’s licence, and
(b) the business is carried on or proposed to be carried on at a place for which the licence is granted, and
(c) the business is carried on or proposed to be carried on in accordance with the licence.
Maximum penalty—1,000 penalty units or, in the case of a second or subsequent offence, 1,000 penalty units or imprisonment for 12 months, or both.”
Here’s what you need to know:
- The Magic Number: If you sell more than 4 vehicles in a 12-month period, the law presumes you’re operating as a motor dealer. This means you’d need a dealer’s license to operate legally.
See: https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-2013-107#sec.163
163 Evidence of carrying on business as motor dealer and advertising
(1) If in any proceedings for an offence under this Act or the regulations it is proved that a person sold, or offered or displayed for sale, more than 4 motor vehicles within a 12 month period to any other person or persons (other than a motor dealer), it is presumed in the absence of evidence to the contrary that the person was carrying on business as a motor dealer during that period.
(2) Nothing in subsection (1) precludes a person who sells, or offers or displays for sale, 4 or less motor vehicles within a 12 month period to any other person or persons from being found to be a motor dealer.
(3) If in any proceedings for an offence under this Act or the regulations it is proved that a statement has been published containing identifying particulars of a person, or the agent of a person, who is a person specified in subsection (4), the person is presumed in the absence of evidence to the contrary to have caused the statement to be published on the day on which it was published.
(4) The specified persons are as follows—
(a) the owner or supplier of any motor vehicle, substantially demolished or substantially dismantled motor vehicle or parts of or accessories for motor vehicles that the statement promotes or is intended to promote,
(b) the supplier of any services relating to motor vehicles, parts or accessories referred to in paragraph (a) that the statement promotes or is intended to promote,
(c) a person who has, otherwise than as an owner, an interest in any motor vehicles, parts or accessories referred to in paragraph (a) or the supply of any services referred to in paragraph (b) that the statement promotes or is intended to promote.
- Even Selling 4 or Fewer Cars Isn’t Always Safe: While selling 4 or fewer cars doesn’t automatically make you a dealer, it doesn’t mean you’re in the clear either. Depending on the circumstances, you could still be considered a dealer.
- Consequences: Operating as an unlicensed dealer is a serious offense. You could face hefty fines or even legal action.
- Intent Matters: The law looks at whether you’re carrying on a business. If you’re repeatedly buying cars to resell for profit, even if it’s fewer than 4, you might be seen as a dealer.
- Stay Informed: If you’re planning to sell multiple vehicles, it’s crucial to understand the laws in your area. When in doubt, consult with a legal professional.
Remember, these rules are in place to protect consumers and ensure fair practices in the automotive industry. If you’re thinking of regularly selling cars, consider obtaining a proper dealer’s license to stay on the right side of the law – if you find you are on the wrong side of the law; get legal advice early. It will save headaches in the long run.