Motor car auction house guidelines

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Purpose

The guidelines explain key obligations under the Motor Car Traders Act 1986 (the Act) and its regulations, including what you need to do to clearly delineate retail from auction sales.

Difference between a retail sale and an auction sale

Our view is that an auction sale has occurred when a licensed motor car trader sells on ‘the fall of the hammer’, when members of the public have been able to bid.

If you want to sell motor cars at public auction, you must have your motor car trader's licence endorsed for auction sales by the Business Licensing Authority. For further details about applying, contact the Business Licensing Authority.

We consider that the sale of a vehicle in all other circumstances is a retail sale. If you conduct a retail sale, you have the same legal obligations as any other licensed motor car trader. For more information about these obligations, view our Motor car trader obligations - all car sales page.

Cooling-off period

With auction sales, you do not have to give the buyer a cooling-off period under section 43(7) of the Act.

With retail sales of used cars, you must give the buyer three clear business days after they sign the agreement to change their mind. For more information, view the Cooling-off period section of our Motor car trader obligations - all car sales page.

Used motor car price and data sheet

Motor car traders must attach a used motor car price and data sheet to all used vehicles offered for sale, including unregistered vehicles and motorcycles. Form 5 of the Motor Car Traders Regulations explains the details that must be included in the data sheet.

Download our example Used motor car price and data sheet (Form 5) (Word, 61KB).

Roadworthy certificates 

You do not have to provide a roadworthy certificate for auction sales, or if the registered vehicle is sold to another licensed motor car trader or special trader. 

If you sell a registered vehicle at retail, you must provide a roadworthy certificate, issued within 30 days of purchase.

Statutory warranties 

With auction sales, there is no statutory warranty.

With retail sales, you must provide a statutory warranty if a vehicle is less than 10 years old and has travelled less than 160,000 kilometres. For more information, view the Statutory warranty section of our Motor car trader obligations - used car sales page.

Dealings books 

You must maintain a dealings book at all premises where your business operates. 

The dealings book may be in paper or electronic form. It must contain certain details about all cars in your possession, regardless of how you intend to sell them. 

Regulation 8 of the Motor Car Traders Regulations 2008 has the details you must include in the dealings book. 

Form 2 provides the prescribed form for a dealings book. Download a copy of the Licensed motor car trader form 2 (dealings book) (PDF, 17KB)

For auction sales, you must record the name and address of the vehicle’s owner and its buyer. 

You must enter these details into the dealings book: 

  • at the time of receipt, purchase, sale or exchange of a vehicle, or
  • when you possess a vehicle that you intend to sell (either by auction or retail sale) or exchange.

Consignment sales 

It is against the law for you to sell retail, or offer to sell retail, a motor car on consignment from a member of the public. However, vehicles can be consigned between licensed traders or special traders. 

All vehicles sold on consignment from another licensed motor car trader or special trader must still have the relevant Form 5 attached and its details recorded in the dealings book. 

Written-off vehicles register 

Under the Road Safety (Vehicles) Regulations 2009, you must advise a purchaser in writing whether a vehicle is on the written-off vehicles register in Victoria or an interstate equivalent. 

You must inform the purchaser of this on the relevant Form 5. 

Selling to an unlicensed person 

You must not provide motor cars to an unlicensed person you know is likely to engage in unlicensed motor car trading. 

Separate retail vehicles from auction vehicles 

We recommend that you clearly separate retail vehicles from auction vehicles on display. 

This is not a legal requirement but it will help avoid disputes about whether a vehicle was bought under retail (with its legal protections) or auction conditions. 

You can separate vehicles by prominent signs or, preferably, a physical barrier. This can include movable barriers, providing the areas are clearly distinguished and consumers can identify what type of vehicle they are viewing. 

Dummy bidding 

Dummy bidding is against the law. 

Dummy bidding occurs when the owner (or their representative) makes a bid at the auction. A dummy bid by a representative of the owner does not necessarily have to be at the owner's request or knowledge for it to be unlawful. 

An auctioneer must not: 

  • accept a bid if they know that the bid was made by the car owner, or by someone acting for the car owner
  • engage someone to make a dummy bid. 

Serious penalties may apply if you are found to have been complicit in any dummy bidding. 

However, as an auctioneer, you may make a bid on behalf of the car seller provided you announce that you are going to do this before the auction starts.

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