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A review of the regulation of consignment sales under the Motor Vehicle Dealers Act 1973 (WA) has been completed by Consumer Protection.
The key purpose of the review was to consider whether the regulation of consignment sales should continue in its current form.
A combined review of the Motor Vehicle Dealers Act 1973 (WA) (MVDA) and the Motor Vehicle Repairers Act 2003 (WA) (MVRA) identified sale of vehicles by consignment as an area of significant risk to consumers. Following the review, there were further incidents involving motor vehicle dealers selling on consignment that resulted in consumers suffering serious financial detriment and loss.
In light of these losses, this review undertook to examine whether further regulatory intervention was required, including the possibility of banning consignment selling of vehicles, an option suggested by some sectors of the industry.
This review found a significant section of the motor vehicle sales industry relies on consignment selling, and this method of selling should be retained, but there remains scope for a number of regulatory reforms.
As a result, the final report in the form of a Decision Regulatory Impact Statement (DRIS) recommends some key reforms. The proposals were agreed to by the Minister in February 2022.
The DRIS outlines the issues raised during the review, reports on stakeholder input to the review, assesses options for change, and makes recommendations for reform.
These key reforms are:
The review recommendations are aimed at:
It is acknowledged that the proposed changes to the regulation of consignment sales will impact on consignment dealers and the broader motor industry. The recommendations aim to provide a more effective regulatory regime at minimal increased cost to industry.
Work on implementing the key reforms will continue in 2022.
View the Decision Impact Regulatory Statement (DRIS) report https://www.commerce.wa.gov.au/publications/decision-regulatory-impact-statement-regulation-motor-vehicle-consignment-sales
The DRIS represents the final stage of the review. The first stage included inviting feedback on a consultation paper known as a Consultation Regulatory Impact Statement (CRIS).
In response to the CRIS, Consumer Protection received a total of eight submissions and 17 people answered the online survey.
The CRIS sought industry and consumer feedback on three options for reform:
During consideration of industry and consumer feedback and responses, Consumer Protection proposed an amended version of Option B be implemented.
On 10 December 2021, the final report was certified by the Department of Treasury’s Better Regulation Unit as complying with the Government’s Regulatory Impact Assessment Guidelines.
Government approval will be sought to introduce amendments to the legislation to Parliament.