Licensing requirements for auto wreckers and recyclers

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If you buy salvaged, damaged or incomplete vehicles at the end of their life for scrap metal or parts sale, you are unlikely to need a motor car trader’s licence; however, you may need to be a registered second-hand dealer.

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When you need a motor car trader’s licence

An auto wrecker or recycler who buys, sells or exchanges motor cars from or to the public (or offers to do so) must have a motor car trader’s licence, unless the vehicle:

You also need a motor car trader's licence if you:

  • plan to buy, sell or exchange written-off or damaged vehicles that can be repaired or restored (unless they are exempt transactions)
  • engage in infrequent vehicle trading.

If a vehicle no longer fits the legal definition of a ‘motor car’, you do not need a motor car trader’s licence. Examples include:

  • incomplete or damaged vehicles that cannot be returned to the road
  • vehicles beyond restoration or repair (such as burnt-out or water-damaged vehicles).

If you require a motor car trader’s licence, you have the same obligations as any motor car trader under the Motor Car Traders Act 1986.

When you need to be a registered second-hand dealer

If you are a licensed motor car trader who buys and sells motor vehicles and parts, you do not need a separate second-hand dealer's registration. However, you must still comply with the Second-Hand Dealers and Pawnbrokers Act 1989.

As a wrecker or recycler, you need to be a registered second-hand dealer but you do not need to have a motor car trader's licence if you only:

  • buy exempt, written-off, incomplete or damaged vehicles that can never be returned to the road, including for scrap metal, or
  • buy and sell car parts.

For more information about second-hand dealer registration, view our Second-hand dealers and pawnbrokers section.

Ferrous and non-ferrous metals

If you buy and sell car parts or buy vehicles that do not require a motor car trader's licence, you cannot rely on exemptions under the Second-Hand Dealers and Pawnbrokers Act 1989 relating to ferrous and non-ferrous metals.

You are only exempt from registering as a second-hand dealer if you deal in scrap metal (that does not contain copper, gold or silver) and not any other car parts.

Typically, if you buy motor vehicle parts and sell scrap metal and other car parts, you still need to be registered as a second-hand dealer.

Exemptions

These types of transactions do not require a licence:

  • Buying, selling or exchanging motor cars with a licensed motor car trader, a special trader (such as a financier or manufacturer), or an employee.
  • Selling by a financier of repossessed or returned cars at public auction or by public tender.
  • Selling by a financier through private sale to buyers introduced by people from whom the cars were repossessed.
  • Selling a car to someone who has hired or leased the vehicle for at least three months before the offer to sell it. (Note: this does not exclude rent-to-buy businesses from requiring a licence).
  • Buying and selling cars at public auction, where they were last owned by:
    • a government department or public statutory authority
    • a company that has been wound up and the cars are offered for sale by a liquidator
    • a local council
    • the executor or administrator of a deceased person’s estate
    • an insurance company where the car is damaged, and the reasonable cost of repair is more than $4000 (or the value of the car).

Incomplete vehicles and parts

Wreckers and recyclers may buy cars that are incomplete or not in working order for:

  • scrap metal
  • on-selling to wreckers/metal recyclers for scrap metal
  • selling parts to consumers or repairers
  • restoring the vehicle for sale to the public
  • selling to the public unrestored.

Vehicle parts may include panels, wheels, engine parts, windscreens, mirrors and dashboards, among others.

A complete vehicle is one that:

  • looks, to any reasonable person, like a motor vehicle
  • includes an engine
  • is capable of being returned to the road.

The vehicle (including the engine) does not have to be in working order.

If you deal in incomplete vehicles and parts, you may not need a motor car trader's licence, but may need to register as a second-hand dealer.

Further guidance

If you are an auto wrecker or recycler and unsure if you need a licence, the Business Licensing Authority can give you guidance. You may also decide to seek independent legal advice.

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