How recent changes to motor vehicle laws will affect you - Motor vehicle industry bulletin 10
Changes to pre-estimated liquidated damages
From 1 January 2022, the maximum amount of pre-estimated liquidated damages that a dealer may charge is five per cent.
30 September 2021
How recent changes to motor vehicle laws will affect you
On 25 September 2021, changes to motor vehicle dealer and repairer laws commenced. These changes affect a number of areas including categories of dealer's licences and classes of motor vehicle repair work. This bulletin outlines how these changes affect dealers and repairers.
Changes affecting motor vehicle dealers
Reduction in the number of licensing categories
The categories of dealer's licences will reduce from six to four categories:
- Category A: vehicle sales (buying, selling and auctioning vehicles).
- Category B: vehicle wrecker or dismantler (buying any vehicles for the purpose of dismantling them and selling off the parts).
- Category C: vehicle broker or agent (acting as an agent to facilitate the selling or purchase of any vehicles on behalf of members of the public).
- Category D: vehicle hire and sales (hiring out vehicles, buying vehicles for hiring out, and selling and auctioning any vehicles that have been hired out by the dealer).
It is possible for one dealer to have any combination of categories A, B, C or D.
Dealers do not need to take any action in relation to these changes. The changes will automatically apply to new licence applications and renewal applications made after 25 September 2021. An existing licence will remain valid until its expiry date and will be issued under the relevant new category at the time of the next renewal.
Formatting change to Form 1 - Register of transactions
The format of the Form 1 – Register of transactions has changed to make it easier for dealers to enter the required information. Dealers will now only need to enter the name of the registered owner of a vehicle if it is different from the seller. Additionally, the column previously called ‘Remarks’ has been replaced with two columns so the name of the person entering the data and the date it is entered are recorded.
Dealers need to obtain the updated form, whether as a paper or digital version, as soon as possible. Our officers will work with the industry to assist them with these changes, if needed.
Inclusion of statutory warranties in other prescribed forms
The following prescribed forms now include specific wording for the warranty against defects provided under the Australian Consumer Law:
- Form 4: Vehicle particulars and warranty for either used cars or motorcycles;
- Form 5: Notice of defects excluded from warranty; and
- Form 6: Vehicle particulars – no warranty.
Dealers need to obtain the updated forms, whether as a paper or digital version, as soon as possible. Our officers will work with the industry to assist them with these changes, if needed.
Some additional infringement notice offences and penalties have been included for administrative offences such as failing to include prescribed particulars in a vehicle sale contract, as well as acting as a sales person or yard manager without a licence.
Increased disclosure for auditors of consignment sales trust accounts
Auditors of trust accounts held by motor vehicle dealers will now be required to disclose to the Commissioner for Consumer Protection if they are in a de-facto relationship with the dealer. Previously, auditors were only required to disclose if there was a close relationship through blood or marriage. We have also advised auditors about this change via email sent on 23 September 2021.
Upcoming changes to pre-estimated liquidated damages
From 1 January 2022, the maximum amount of pre-estimated liquidated damages that a dealer may charge will reduce from 15 per cent to five per cent.
While this change hasn’t started, dealers need to be aware of it and make arrangements to update paper and/or digital contracts to reflect the new amount in time for use from 1 January 2022.
Changes affecting motor vehicle repairers
Reduction in the number of classes of repair work
The number of classes of repair work has reduced from 29 to 23 by:
- merging driveline servicing and repairing work, driveline work, and transmission work to create a new class of driveline and transmission work;
- merging diesel fitting work and diesel fuel and engine work to create a new class of diesel work;
- merging tyre fitting (light) work and tyre fitting (heavy) work to create a new class of tyre fitting work;
- moving exhaust system work and steering, suspension and wheel aligning work into the class of underbody work; and
- moving cylinder head reconditioning work into the class of engine reconditioning work.
As a result of the above, the following classes of repair work have been removed and categorised as superseded classes:
- cylinder head reconditioning;
- diesel fitting;
- diesel fuel and engine;
- driveline servicing and repairing;
- exhaust system;
- suspension and wheel aligning;
- tyre fitting (heavy) work; and
- tyre fitting (light) work.
Repairers with current certification in these classes do not need to take any action as their existing repairer’s certificate will remain valid.
From 25 September 2021, as part of the transitional arrangements, tradespersons will still have 12 months to apply for certification in a superseded class. This will provide people with enough time to submit an application to seek certification in a superseded class including someone who is currently obtaining a qualification in a superseded class.
Changes to the definition of accessory fitting work and trimming work
The definition of electrical accessory fitting work and mechanical accessory fitting work has changed. Certification will only be required for work to install or remove an accessory where that accessory affects the performance, safety or security of a motor vehicle. We have developed a guide to assist with understanding the new definitions.
The definition of trimming work has also changed, with certification only required for trimming work which affects the performance, safety or security of a motor vehicle. Where trimming work involves parts of a vehicle which affect performance, security or safety (e.g. airbags or sensors), then this must be carried out by a certified repairer.
These changes do not affect repairers already certified for either electrical accessory fitting, mechanical accessory fitting, or trimming work.
New class of repair work – locksmith work
Previously, automotive locksmiths were certified in the class of electrical accessory fitting work and/or mechanical accessory fitting work. The introduction of a new class of locksmith work covers work required to service, repair or replace a locking or transponder system fitted to a motor vehicle. This new class provides clarity for both the repairer and locksmith industries.
A procedure to allow repairers who undertake automotive locksmithing to have their certificate reissued with the new class of locksmith work has been developed. We will be contacting all repairers certified for electrical accessory fitting work and/or mechanical accessory fitting work to provide them with instructions about the transfer process.
Addition to exclusion list for definition of motor vehicle
The list of exclusions from the definition of a motor vehicle now includes Segways and vehicles with a power output of not more than 200 watts. This makes it clear that any repairs to these goods do not need to be carried out by a certified motor vehicle repairer.
Some additional infringement notice offences and penalties have been included for the following:
- Section 55(3): failure by a licensee or certificate holder to produce their business licence or repairer’s certificate while at premises.
- Section 109(2)(a): a repair business entering into an agreement to have work carried out by an unlicensed repairer.
- Section 109(3)(a): an insurer entering into an agreement or requiring work to be carried out by an unlicensed repairer.
If you have any questions or want more information about these changes, please contact Consumer Protection's advice line on 1300 304 064 or email, firstname.lastname@example.org.