20 July 2022

Are you meeting your sales or repairer obligations?

You will find information on the following topics in this bulletin:

• Unroadworthy vehicles
• Reminder to renew your licence or registration 
• Dealers flouting the pre-estimated liquidated damages rules
• Consumer Protections prosecutions hit-list

Not roadworthy? Then don't sell

In 2021-2022, Consumer Protection issued defect notices on 83 unroadworthy vehicles during random inspections at car dealerships, including 45 notices related to worn tyres – posing a serious risk to drivers and other road users.

 Dealers can only offer vehicles for sale that are roadworthy, even if they are an older model or being sold for a low price. More information can be found here.  

During inspections, Consumer Protection officers also check to make sure the dealer’s register complies with the requirements, so make sure you keep your records up-to-date.

Is your licence or registration up-to-date?

Remember to renew your dealer or repairer licence or registration before it expires. To avoid any disruption to your business, allow sufficient processing time before your licence or registration expires. It may take up to six to eight weeks to obtain a police check from an approved third-party provider. Note, these police checks are valid for up to three months, so you can start the process of obtaining a police check at least two months before submitting your complete licensing application.  

Operating without a licence can result in prosecution for unlicensed trading.

Pre-estimated liquidated damages

A reminder that dealers can only seek up to five per cent of a vehicle’s purchase price as pre-estimated liquidated damages if a contract is terminated by the purchaser. In seeking pre-estimated liquidated damages, dealers must be able to prove the amount of the loss they have incurred because a consumer cancelled the contract. The maximum of five per cent is not a default amount. A dealer making a claim that cannot be substantiated may be prosecuted for making a false and misleading representation under the Australian Consumer Law and could be liable for a fine of up to $500,000.

Check the prescribed terms and conditions of your sales contracts reflect the recent changes to pre-estimated liquidated damages.

Refer to Motor Vehicle Bulletin 11 and Vehicle sales contracts page on the Consumer Protection website for more information.

Don't make the prosecutions 'hit list'

Consumer Protection staff randomly visit licensed motor vehicle dealers to check compliance with the relevant regulations. Breaches of the law identified during these visits may result in prosecution.

Breaches of the Motor Vehicle Dealers Act are serious offences. Investigations into claims of odometer tampering, sale of unroadworthy vehicles, misleading claims relating to pre-estimated liquidated damages and dealers trading without a current licence or registration are ongoing by Consumer Protection officers.

In recent weeks, there have been three successful prosecutions for unlicensed dealing and odometer tampering:  

• An unlicensed dealer was fined for selling 13 vehicles illegally over a 16 month period.
• A backyard dealer was fined for selling vehicles without a licence and for false odometer readings.
• Vehicle sold after odometer was reduced by more than 150,000 kilometres.