Registration/licensing requirements for trading in cars, car parts and scrap metal

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An auto wrecker and recycler who buys parts and sells scrap metal and other component car parts is usually required to register as a second-hand dealer.

However, second-hand dealer registration does not cover a business that trades in motor vehicles, and it is an offence to carry on such a business unless licensed under the Motor Car Traders Act 1986.

A motor vehicle is one (whether or not in working order or complete) that:

  • is used or intended to be used on a roadway, and
  • built to be propelled by a motor that forms part of the vehicle.

You must usually apply for a motor car trader’s licence in order to:

  • buy or offer to buy motor vehicles from the public with the specific intention of dismantling them, to sell the parts or scrap metal
  • sell or offer to sell motor vehicles to the public
  • exchange motor vehicles with the public.

An auto wrecker or recycler must register as a second-hand dealer but does not need a motor car trader’s licence to:

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

Auto wreckers and recyclers who buy and sell car parts or buy vehicles not requiring a motor car trader’s licence cannot rely on the Second Hand Dealers and Pawnbrokers Act 1989 exemption relating to ferrous and non-ferrous metals. This exemption applies only if the wrecker or auto recycler:

  • deals only in scrap metal and not any other component parts of cars, and
  • the metal does not contain copper, gold or silver.

For more information about applying for a motor car trader’s licence and exempt vehicles, view our Motor car traders licensing section.

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