Holding an LMCT licence is just the beginning. Once you’re trading, one of your most important ongoing obligations is keeping your records in order. Get it wrong and you’re not just looking at an administrative headache — you could face fines, licence conditions, or even cancellation. Here’s exactly what Consumer Affairs Victoria expects you to keep on file.
The Motor Car Traders Act 1986 (Vic) sets out clear statutory duties for every Licensed Motor Car Trader. Record-keeping sits right at the heart of those duties. Auditors from Consumer Affairs Victoria (CAV) can inspect your records at any time, so staying organised isn’t just best practice — it’s the law.
Whether you’re a sole trader running a small yard or a company operating multiple sites, these five records apply to you. Let’s walk through each one.
Why Record-Keeping Matters for LMCT Holders
Many traders focus heavily on the initial application and then assume compliance looks after itself. It doesn’t. The Act places a continuing duty on licence holders, and record-keeping is one of the most scrutinised areas during CAV audits and dispute resolution.
Good records protect you in two ways. First, they show regulators that your business is run transparently and professionally. Second, they protect you if a dispute arises with a buyer, seller, or financier — because you’ll have documented proof of every transaction.
If you’re still in the process of obtaining your car dealer licence in Victoria, it’s worth understanding these obligations before you even open your doors. Starting with the right systems in place is far easier than retrofitting them later.
The 5 Mandatory Records
Register of Motor Vehicles
This is arguably the most fundamental record an LMCT holder must maintain. The register of motor vehicles is a running log of every vehicle that passes through your trading operation — whether you’ve bought it, sold it, taken it on consignment, or held it temporarily.
For each vehicle, your register must capture:
- The make, model, year, colour, and VIN (Vehicle Identification Number)
- The date the vehicle was acquired and from whom
- The purchase price or value paid
- The date the vehicle was sold or otherwise disposed of
- The name and address of the buyer and the sale price
This register must be kept for a minimum of three years from the date of each entry and be available for inspection on request. Many traders maintain this digitally through dealer management software, which is perfectly acceptable provided the records are complete and printable.
2 Trust Account Register
If your business holds deposits or payments on behalf of another party before a transaction is finalised — which is common in motor vehicle trading — you are required to hold those funds in a dedicated trust account and maintain a corresponding trust account register.
The register must record:
- Every amount received into the trust account and from whom
- The purpose for which the funds are held
- Every payment made out of the account, to whom, and on what date
- The current balance at all times
Trust account mismanagement is taken very seriously by CAV. Mixing trust funds with general business funds — even accidentally — is a significant breach. If you’re unsure whether you need a trust account, this is one area where professional advice from a licensed accountant or LMCT specialist is strongly recommended.
⚠ Important: Trust account records must be reconciled regularly (generally monthly). Reconciliation records themselves form part of your compliance obligation.
3 Repair and Damage Record
Before offering a vehicle for sale, you are required to disclose any significant damage or repairs. The repair and damage record is the mechanism through which you document that disclosure — and it must be maintained for every vehicle in your inventory.
This record should capture:
- Any known defects, damage, or repairs that may affect the vehicle’s value or safety
- Repairs carried out while the vehicle was in your possession (including dates and costs)
- Any odometer anomalies identified during your assessment of the vehicle
The disclosure obligation under the Act is closely linked to this record. If a buyer can show that damage was known but undisclosed, the consequences extend well beyond a record-keeping fine — you could be facing a full consumer claim. Keeping accurate repair and damage records is one of the best ways to protect your business from after-sale disputes.
4 Consignment Register
Not every trader takes vehicles on consignment, but if you do, you need a separate consignment register. A consignment arrangement is where you sell a vehicle on behalf of its owner (the consignor) and take a fee or commission for doing so.
Your consignment register must include:
- The name and address of the consignor (vehicle owner)
- A full description of the consigned vehicle (make, model, VIN)
- The agreed sale price or price range
- The date the vehicle was received and the date it was sold or returned
- The amount paid to the consignor and any fees retained
Consignment transactions carry additional consumer protection obligations, and the consignment register provides the audit trail that verifies you have met them. This is particularly important if the consignor disputes the sale price or the amount they received.
5 Finance and Insurance Transaction Records
If your dealership arranges finance or insurance products for customers — even as a referral — you are required to maintain a record of those transactions. This is an area that catches many LMCT holders off guard, particularly those who assumed these obligations fell solely on the lender or insurer.
Your records in this area should cover:
- The name of the customer and the vehicle involved
- The finance or insurance product arranged and the provider
- The date of the arrangement and the amount financed (if applicable)
- Any commission, referral fee, or benefit received by your business in connection with the product
With increasing regulatory scrutiny on add-on insurance and dealer finance commissions under Australian Consumer Law, having clean, complete records in this area is more important than ever.
Quick Reference Summary
| S.No | Record Type | Who Needs It | Minimum Retention |
|---|---|---|---|
| 1 | Register of Motor Vehicles | All LMCT holders | 3 years |
| 2 | Trust Account Register | Those holding deposits / pre-settlement funds | 3 years (+ reconciliation records) |
| 3 | Repair and Damage Record | All LMCT holders | 3 years |
| 4 | Consignment Register | Traders accepting consignment vehicles | 3 years |
| 5 | Finance & Insurance Records | Traders arranging finance or insurance for customers | 3 years |
Practical Tips for Staying Compliant
Understanding what records you need is one thing. Actually keeping them consistently is another. Here are a few practical steps that make compliance far less stressful:
- Use dedicated dealer management software. Systems like DRIVE or similar platforms automate much of your record-keeping and reduce the risk of gaps or errors.
- Set a monthly review habit. At the end of each month, run a quick audit of your registers to confirm every vehicle acquired and sold that month has a complete entry.
- Keep your records in one place. Whether digital or physical, having all five records accessible from a single location makes CAV inspections straightforward.
- Train your staff. If employees enter data into your registers, make sure they understand what’s required. A single incomplete entry can become a compliance issue during an audit.
- Don’t wait until renewal to check compliance. Your LMCT licence renewal process will go more smoothly if your records have been maintained throughout the year, not scrambled together at renewal time.
Tip: Consumer Affairs Victoria provides an LMCT self-assessment checklist that you can use to periodically review your own compliance. Using it twice a year is a smart habit for any active trader.
Common Record-Keeping Mistakes to Avoid
Even well-intentioned traders make mistakes in this area. The most common ones we see include:
- Leaving entries incomplete — particularly missing buyer addresses or VINs
- Not recording vehicles that were traded in as part of a sale
- Failing to update the register when a sale falls through and a vehicle returns to stock
- Treating the trust account register as optional when only small deposits are involved
- Not recording finance referral fees received from lenders
Each of these seems minor in isolation — but during a CAV audit, a pattern of incomplete records suggests systemic non-compliance rather than an honest oversight. That distinction matters enormously to investigators.
It’s also worth noting that record-keeping failures are separate from the underlying trading obligation. If you’re uncertain whether your business structure even requires an LMCT licence, read our overview of why businesses and professionals need an LMCT licence before assuming you’re covered (or that you’re not).
Future content to watch for: We’ll be publishing a deep-dive on how to set up a compliant LMCT trust account from scratch and a guide to LMCT audit preparation — what to expect when CAV visits your yard. Stay tuned to our LMCT blog for updates.
A Note for Truck Dealers
The same record-keeping obligations apply if you hold a licence for truck trading in Victoria. The registers and records described above cover motor vehicles broadly — including commercial trucks. If anything, the higher transaction values involved in truck sales make accurate documentation even more critical.
If you’re operating as a licensed truck dealer, make sure you’re also across the specific licence conditions that apply to your category of trading. Our truck dealer licence Victoria page covers the key requirements in more detail.
Need Help Getting Your LMCT Compliance in Order?
Our team of qualified accountants and LMCT specialists has helped hundreds of Victorian traders stay compliant — from first application through to ongoing obligations.
Apply LMCT Licence — Dandenong, Victoria. This article is for general informational purposes and does not constitute legal advice. For advice specific to your circumstances, please contact our team directly.
Frequently Asked Questions
Under the Motor Car Traders Act 1986, LMCT holders must maintain a register of motor vehicles, a trust account register, a repair and damage record, a consignment register (if applicable), and a record of all finance and insurance transactions. These records must generally be kept for at least three years and be available for inspection by Consumer Affairs Victoria at any time.
Most records required under the Motor Car Traders Act 1986 must be retained for a minimum of three years from the date of the relevant transaction. Some financial and trust account records may need to be kept longer under other applicable legislation, such as the Australian Consumer Law or relevant accounting standards.
Failure to maintain mandatory records is a breach of the Motor Car Traders Act 1986 and can result in significant fines, conditions being placed on your licence, or even licence cancellation. Consumer Affairs Victoria has the authority to inspect records at any time and without prior notice.
Yes, electronic record-keeping is perfectly acceptable. Your digital system must produce records that are accurate, complete, and readily accessible for inspection. Any records requested by Consumer Affairs Victoria must be able to be printed clearly and promptly.
A trust account is required whenever your business holds deposits or payments on behalf of another party before a transaction is finalised. If you accept any form of deposit prior to settlement, you will generally need a trust account and must keep a corresponding register. If you’re unsure whether this applies to your situation, speak with an LMCT specialist before making assumptions.
Yes. The obligation to maintain a consignment register applies regardless of the frequency of consignment transactions. Even a single consignment vehicle triggers the requirement. There is no minimum threshold — if you accept a vehicle for sale on behalf of someone else, the register entry is mandatory.
