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Standard fact sheet.

Auto dismantlers 

Reforms to motor industry laws

From 1 December 2014 the Motor Dealers and Repairers Act 2013 will replace the Motor Dealers Act 1974. The new Act contains simplified, consistent legislation providing greater consumer protection and a fair go for motor vehicle businesses. For more information, go to the Major changes to motor industry laws page.

Under these changes, auto-dismantlers and vehicle part reconstructors will be licensed under a new dedicated category, Motor vehicle recyclers. For more information, go to the Motor vehicle recyclers page.

Guidelines for businesses

These guidelines have been produced by NSW Fair Trading to assist holders of auto dismantler licences. It is a guide only and is not a substitute for legal advice. If you are unsure of your obligations you should refer to the Motor Dealers Act 1974 and the Motor Dealers Regulation 2010 or seek legal advice.

By law, auto dismantlers must keep registers to record the acquisition and disposal of motor vehicles, prescribed parts and accessories. The registers will ensure that there is an audit trail of goods. This will help reduce the disposal of stolen vehicles and parts. It is important that all records are accurate and comply with the Motor Dealers Act 1974 and Motor Dealers Regulation 2010.

Prescribed parts 

The Motor Dealers Act 1974 requires prescribed parts to be recorded in the registers. Currently, the prescribed parts are:

  • chassis
  • major body section
  • bonnet
  • right side door front
  • left side door front
  • right side door back
  • left side door back
  • hatchback door
  • bootlid
  • right front mudguard
  • left front mudguard
  • front bumper bar
  • rear bumper bar
  • front apron panel
  • engine/engine block
  • gearbox/transmission
  • instrument cluster
  • car radio/tape/cd equipment
  • electronic navigation equipment
  • television
  • digital video disc (DVD) equipment
  • airbag driver front
  • airbag passenger front
  • airbag driver side
  • airbag passenger side
  • alloy (mag) wheel 1
  • alloy (mag) wheel 2
  • alloy (mag) wheel 3
  • alloy (mag) wheel 4
  • alloy (mag) wheel 5.

 

NOTE – bumper bars, regardless of their material or number of pieces, must be recorded.

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Prescribed registers 

As a licensee, you are required to keep the following registers (also known as ‘Police Books’):

Additional registers may also need to be kept if other types of licences are held under the Motor Dealers Act 1974. Registers must be kept in the prescribed form either in writing (book form) or electronically (ie. using a computer and software).

The prescribed forms for the registers are found in the Motor Dealers Regulation 2010 and are also available on the Fair Trading website under Forms. You must ensure that all information required to be entered into the registers in relation to a transaction or event is entered within one business day after the transaction or event occurs. Failure to comply may attract a penalty. (Maximum $2,200.)

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Form 2A register

A form 2A register is for recording the acquisition of motor vehicles and disposal of prescribed parts removed from those vehicles.

The vehicle details and the name and address of the person from whom the vehicle was acquired including their identification details must be recorded in the top section of the register. If the seller is a non trade owner the person’s driver licence number or other photo identification is required. If the seller is a trade owner the person’s motor dealer licence number must be recorded. The bottom section must only list the salvage and disposal details of the prescribed parts. If your system has more than 30 prescribed parts listed in the register, your software provider should be able to rectify this problem.

Salvaging of parts

You must record in the 2A register (in a column ‘salvaged y/n’ (ie. yes/no)) whether a prescribed part from the vehicle is going to be salvaged or not. If you are going to salvage the prescribed part, that is, keep it for sale you must record ‘yes’. For damaged parts, which have no value and which are going to be scrapped, you will need to record ‘no’ in the salvaged column. If the part is not attached to the vehicle, for example if the vehicle does not have air bags then record NA (not applicable) in the column.

This information must be completed within one day of the vehicle’s purchase, not when the part is sold or disposed.

Some software uses the word ‘dismantled’ rather than ‘salvaged’.This is incorrect terminology and the licensee should contact the software provider to change it. NSW Fair Trading needs to know what parts have been salvaged, not whether you have dismantled the part.

Form 2B register

This register is for recording the acquisition and disposal of prescribed parts. In the 2B register, each prescribed part must get its own entry number.This can either be a consecutive full number or a full number followed by a further digit. (For example – 1566/1.)

Licensees must record acquisition details for each prescribed part including the date the part was acquired, how it was acquired and from whom. Licensees must also record the disposal details for each prescribed part entered in the register.

If you hold a full motor dealer licence and sell complete vehicles you will also need to complete a Form 2 register to record the acquisition and disposal of your vehicles.

In addition, you must display and issue the appropriate prescribed notice.

NOTE – If you hold a full motor dealer licence there may be other forms you are required to complete.

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Identification of person 

The Regulation requires licensees to obtain the appropriate identification of persons from whom the licensee is either buying or selling prescribed parts. If the seller or purchaser is another licensee or business, the dealer’s licence number or the ABN number for the business must be recorded in the appropriate register and receipt. If the seller or purchaser is not the holder of a dealer licence or not a business the person must provide photo identification. This is to be a driver licence. If the person does not hold a driver licence some other form of photo identification issued by a government authority is required. The identification details are to be recorded in the appropriate register or receipt.

Please ensure you sight the identification. Fair Trading is aware that fictitious driver licence numbers have been recorded and this problem is less likely to occur if the licensee sights the driver licence.

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‘Cut’ vehicles 

Over recent years there has been a trend where licensees purchase cut vehicles, sourced mainly from overseas. These are known as front cuts, rear cuts, half cuts etc.There has been some confusion by licensees about the register in which they should record the prescribed information. Prescribed parts from a cut vehicle should be recorded in the 2B register. This means that each prescribed part will get its own entry number. This can either be a consecutive full number or a full number followed by a further digit.

For example – Front cut vehicles:
1567/1 front bumper
1567/2 front apron
or
1567 front bumper
1568 front apron.

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Inspection of records 

At the request of an authorised officer licensees must make their records available for inspection. Authorised officers may also make copies of the register, or retain that register and provide a blank duplicate register.

If the registers are kept electronically, the software program must be able to display and print the required information and include the date on which each record in the register was made. It is essential that you provide this information on demand and that your staff is aware of this requirement.

Authorised officers include:

  • an investigator appointed under s.18 of the Fair Trading Act
  • any person authorised in writing by the Commissioner for Fair Trading
  • a person authorised in writing by the Chief Executive Officer of the Roads and Maritime Services 
  • any member of the police force.

Additionally, members of the police force have authority under the Motor Dealers Act 1974 to search for and examine any motor vehicles, parts and accessories on the premises.

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Identification of prescribed parts 

Auto dismantlers must mark all prescribed parts with the appropriate entry number from the register relating to that part. The entry number must be on all prescribed parts including those that are damaged and not salvageable. You may have additional numbers on the prescribed part if you wish.

However, it is essential that the entry number is recorded. Failure to comply could result in the issuing of an infringement notice ($330 per offence).

The entry number must be recorded on the part by using a permanent marker.

Do not use chalk or other substances that may smudge or wash off. Tags can only be used if it is impracticable to mark the part with a permanent marker. It is a good practice to mark the parts whilst they are still attached to the vehicle. This will reduce the opportunity for error if unmarked parts are removed for sale or storage. Any parts found at the premises that are not marked will be of concern to Fair Trading and the police.

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Receipts 

Receipts must be issued to persons when prescribed parts are disposed.The receipt must contain:

  • the date of disposal
  • a description of the part
  • the entry number marked on the part (not the tag number or any other number)
  • the vehicle identification number (VIN) for the vehicle from which the part was taken
  • the purchaser’s name and address
  • the purchaser’s identification details.

The receipts must be in duplicate and consecutively numbered.The receipts must be kept for at least six years after the last receipt in the book was issued.

Fair Trading is aware that bogus receipts have been issued to persons to assist in the re-birthing and registration of vehicles. Fair Trading has taken disciplinary action against licensees involved in this conduct. This action has included cancellation of the licence and banning persons from being involved in the management and direction of the business.

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Registration plates 

The number plates attached to any vehicle purchased by a dismantler must be returned to the Roads and Traffic Authority as soon as possible after the purchase or acquisition.

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Licence sign and number 

A licensee must display a sign using the words ‘licensed auto-dismantler’ or ‘licensed motor dealer’ followed by the ‘licence number’ (eg. MD12345), at each place of business for which the licence is granted.The sign must be clearly displayed at the premises in a public area.The lettering must be at least 50 millimetres in height.

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Suspicious goods 

It is an offence under the Motor Dealers Act 1974 if a licensee or an employee fails to inform an authorised officer of any suspicious goods that may have been stolen or unlawfully obtained. These goods may have been taken into stock or offered for sale by a person. If an authorised officer suspects that there are stolen or unlawfully obtained goods on the premises, the officer may serve a notice on the licensee prohibiting the disposal, selling, parting of possession or alteration of the goods for a period of 14 days after the notice is served.

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Business name 

The name that the licensee conducts business under may need to be registered under the Business Names Registration Act 2011 (Cth). Business names are administered by the Australian Securities and Investments Commission (ASIC). For more information about business names, visit ASIC's website www.asic.gov.au

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Penalties 

NSW Fair Trading is responsible for licensing, enforcement and disciplinary provisions under the Motor Dealers Act 1974 and Motor Dealers Regulation 2010. Under the legislation there are a number of enforcement options available.These include a formal caution, issue of infringement notices ($330 per offence), prosecution and disciplinary action against the licensee, including cancellation or suspension of their licence.

It is therefore in the licensee’s interest to adopt good business practices.This includes making sure that proper records are kept. Regular audits of records and stock should take place to ensure they comply with the Motor Dealers Regulation 2010.

If you have any queries or need assistance to comply with the requirements of the Motor Dealers Act (or other fair trading legislation), please contact us on 13 32 20.

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