Proactive compliance – Motor vehicle dealers

This page is for: 
Motor industry

The proactive compliance program is education based and designed to help motor vehicle dealers meet the requirements set out by the legislation plus identify and rectify areas of risk.

Proactive compliance visits

Consumer Protection staff randomly visit licensed motor vehicle dealers to check compliance with the law.

The visits aim to provide education and advice on what the law means on a practical level, and any information about changes. If the visits pick up obvious disregard for the law, this may result in cancellation of a licence/registration.

The proactive compliance checklist below will assist you to prepare for a visit.

If you would like more information please contact the Consumer Protection contact centre team on 1300 30 40 54 or by email.

Preparing yourself

How the visit is conducted

A proactive compliance visit includes a:

  • meeting with the person in charge of the dealership
  • reconciliation of your current employees (yard managers, salespersons) to ensure the accuracy of the Department’s database in relation to your staffing profile and licensed  persons
  • review of completed sales documentation
  • Inspection of used vehicles offered
  • examination of the business trust account and trust accounting procedures
  • discussion about complaints (if any) lodged against the business.

What you will need:

Site visits are impromptu, however you can ensure the visit is conducted with the minimum of disruption to your business by regularly reviewing the checklist and knowing where key documents are stored. For example

  • the dealer’s licence and certificate of authorised premises is on display
  • your trust account bank statements and reconciliations for the previous three (3) months where applicable
  • your trust account receipt book
  • a sample of recent advertisements 
  • consignment documents including current and completed consignment contracts, trust account bank records for the last three (3) months and trust account reconciliation documentation.
  • current list of consignment vehicles in stock
  • all used vehicles offered for sale at the time of the inspection have relevant forms displayed.

A sample of settled sales documentation and consignment files (if applicable) will be reviewed during the visit.

Legislation

The visits aim to assist dealers to comply with the following legislation:

Proactive visit checklist

Proactive compliance checklist – Motor Vehicle Dealers

Download this checklist to help you prepare for a proactive compliance visit.

Download motor vehicle dealers checklist

Motor vehicle dealers proactive compliance checklist
Compliance action Legislation
GENERAL
Is your licensed business name and dealer licence number displayed on a sign, of reasonable dimension, at all your dealership premises? MVDA
21
Are all of your dealership locations authorised? MVDA
20E
Do you employ a disqualified person in any capacity on the authorised premises, or allow a disqualified person to frequent the authorised premises, without the prior consent of the Commissioner? MVDA
20D
LICENCES/ADMINSTRATION
Is your Certificate of Authorised Premises displayed in a clearly visible position inside the authorised  premises? MVDA
20G(3)
Do all salespersons or yard managers hold current licences? MVDA
31 A, B, C
For a firm or body corporate: Have any/all changes to the composition of the firm or body corporate been approved by the Commissioner 14 days prior to the change? MVDA
23
ADVERTISING
Does your dealer business name and licence number appear on all published advertisements? MVDA
21
Do all second-hand vehicle advertisements show the:
  • registration number (a stock number may identify unlicensed vehicles);
  • year of manufacture;
  • cash price; and
  • address of the registered dealer premises where the vehicle is offered for sale?
 MVD(S)R
11 (1, 2)

Check any advertisements do not have potential to mislead consumers? You can access more information here Australian Consumer Law and Fair Trading Act 2010?

Generally speaking, it is an offence to publish or cause to be published, advertisements that may be false, misleading or deceptive, among other things.

 ACL
SECOND HAND VEHICLE TRANSACTIONS
Do you have the appropriate licence for the class or description of dealership? MVDA
30 (3)
Are your dealer registers completed using the correct form for all second-hand vehicle transactions at the dealership? MVDA
25
MVD(S)R
3, 4, 4A
Are all your second-hand vehicles, for which you are the ‘trade owner’, kept or parked at the dealership? MVDA
27(3)
Do all your second-hand vehicles display the correct notice?  MVDA
33 (1, 3, 6)
MVD(S)R 5
Are all vehicle particulars notices:
  • fully complete with prescribed information; and
  • kept for two years or more?

MVDA
33(7)
MVD(S)R 8
Is warranty information provided to the purchaser in the prescribed form before the vehicle is sold? MVDA 34 (A, C ,D)
MVD(S)R 7
CONSIGNMENT SELLING (ignore if not applicable)
Are your consignment agreements between the dealer and consignor (excluding auctions) provided in writing and signed by all relevant parties; and MVDA
42A (2)
Do the agreements contain the prescribed particulars, terms and conditions? MVD(S)R
13B
PRE-ESTIMATED DAMAGES
When applying pre-estimated damages:
Are you able to show/explain your process where an agreement for the sale of a motor vehicle is validly terminated by you (the dealer)?		 MVD(S)R
Sch 5
Are you able to justify the amount being charged to the consumer? MVD(S)R
Sch 5
NOTE: DEMIRS compliance officers visit Motor Dealer premises and will issue vehicle defect notices, where applicable.  

 

More information about fines is available on Infringements, forms and publications - Motor vehicle dealers page. 

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