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, any individual carrying out the business of motor car trading must be licenced. Unlicensed traders are known as ‘backyarders’.

The act and regulations apply to all Victorian motor vehicle traders, including motorcycles and trucks, 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 four or more cars within a 12 month period is deemed to be acting as a motor trader.

Why 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 (e.g. residential backyards). Fumes and overspray invade the homes of neighbouring residents – while engine oil, brake fluid, coolant and other chemicals are poured down the drain, contaminating the environment
  • Backyarders compete unfairly with legitimate, licensed traders who attend to their tax, regulatory obligations, provide warranties and contribute to their communities through employment, investment, and the provision of skilled services
  • Backyarders do not provide 'clear title' on vehicles sold
  • The majority of backyarders do not have the proper equipment and workshops required to repair safely
  • Backyarders add nothing to the industry by way of skills training and development as they do not employ apprentices
  • Backyarders, and unlicensed curb side vehicle sellers, bring the automotive industry into disrepute


What is VACC doing?

On behalf of motorists and small business owners, VACC has been very active in promoting to Consumer Affairs Victoria (CAV) the issues surrounding unlicensed traders.

Stay safe

Car buyers should only buy from a Licensed Motor Car Trader (LMCT), and report any suspicion of illegal activities. 

To report call: 1800 351 591

Additionally, download a copy of Better Car Deals - a buyer's guide, or visit the motorist tips & advice section of VACC website for advice on purchasing used vehicles.