Unlicensed traders

Beware the backyard banger

Unlicensed traders cause financial loss, damage and distress to thousands of consumers each year.

What is an unlicensed trader?

Under the Motor Car Traders Act 1986, a person who carries on the business of trading in motor cars must have a licence. The act and regulations apply to all motor vehicle traders including motorcycles and trucks, in Victoria, who buy, exchange or sell cars irrespective of whether a car is new, old, used, damaged, complete or incomplete.

Anyone who offers to buy, sell or exchange 4 or more cars in 12 months is deemed to be acting as a motor trader.

These unlicensed traders are known as ‘backyarders’.

Why should I avoid unlicensed traders?

  • Typically, backyarders breach planning and environmental laws and are often in breach of the Occupational Health and Safety Act.
  • Backyard motor vehicle repair activities are dangerous. Many substances used in the repair of motor vehicles are highly flammable and potential time bombs if stored inappropriately, such as in residential backyards. Fumes and overspray from spray painting invade the homes of neighbouring residents, while engine oil, brake fluid, coolant and other chemicals are poured down the drain, contaminating the environment.
  • Backyard repairers operate illegally, compete unfairly with legitimate, licensed traders and inhibit the local amenity of neighbouring residents.
  • Backyarders do not provide 'clear title' on vehicles sold, and can pose a health risk and nuisance to their neighbours.
  • The majority of backyarders do not have the proper equipment and workshops required to repair motor vehicles safely.
  • They add nothing to the industry by way of skills training and development as they do not employ apprentices.
  • Backyard repairers and unlicensed curb side vehicle sellers bring the automotive industry into disrepute.
  • Backyarders compete unfairly with legitimate businesses who attend to their tax and regulatory obligations, provide warranties and contribute to their communities through employment, investment, and the provision of skilled services.

What is VACC doing?

We have been active in promoting to Consumer Affairs Victoria (CAV), the issues surrounding unlicensed traders, on behalf of motorists and small business owners.

Stay safe

Car buyers should only buy from a Licensed Motor Car Trader (LMCT) and report anyone suspected of illegally selling vehicles from the home, pub or any other unlicensed premises. If you see an unlicensed motor car trader, ring 1800 351 591.

Download a copy of Better Car Deals - a buyer's guide or visit VACC's Motorist tips & advice section for advice on purchasing used vehicles.