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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