Getting your LMCT licence is a huge milestone. But once you have it in hand, the real work begins. Setting up a car dealership in Victoria involves more than simply putting cars on a lot and opening your doors. From choosing the right business structure to building compliant premises, there are several practical and legal steps you need to follow before you can start trading.
This guide walks you through everything you need to know about launching your dealership after receiving your LMCT licence, so you can start on the right foot and build a business that lasts.
Step 1: Confirm Your Business Structure Is Set Up Correctly
Before you open your dealership, make sure your business entity is properly registered. Whether you’re operating as a sole trader, partnership, company, or trust, the structure you choose will affect your tax obligations, liability exposure, and how you manage your finances.
When you applied for your Car Dealer License Victoria, you likely already nominated a business structure. Now is the time to finalise any outstanding registrations — including your ABN, business name (if trading under one), and GST registration if your expected turnover exceeds the threshold.
If your structure has changed since your application was submitted, you may need to notify the Business Licensing Authority. Getting this right early prevents complications down the track.
Step 2: Set Up Compliant Dealership Premises
Your dealership premises must meet specific requirements, not just to satisfy your LMCT conditions, but also to comply with local council and planning regulations. Failing to have a compliant site is one of the most common reasons new dealers run into trouble early on.
Here are the key things to get right:
- Your site must be approved for use as a motor vehicle dealership under the relevant zoning laws
- You need adequate space to store and display vehicles safely
- Office space and facilities for customer transactions must be clearly defined
- Signage must comply with local council requirements
- The premises must be secured appropriately to protect inventory
You can review what inspectors specifically look for in our detailed Dealership Premises Checklist: What Inspectors Look for Before LMCT Approval — it’s a practical resource to make sure nothing is missed before you start trading.
Step 3: Get Your Financial Systems in Order
Running a car dealership means managing significant sums of money. Establishing solid financial systems from day one is essential for both compliance and business health.
You’ll need to set up:
- A dedicated business bank account separate from personal finances
- An accounting system capable of tracking stock, sales, and expenses
- A trust account if you’re taking deposits or holding funds on behalf of buyers
- GST reporting processes, including correct tax invoicing for vehicle sales
One of the compliance areas that catches many new dealers off guard is record-keeping. Consumer Affairs Victoria requires all licensed traders to maintain specific records. Our article on The 5 Mandatory Records Every LMCT Licence Holder Must Maintain explains exactly what you are required to keep and for how long.
Step 4: Source Your Initial Vehicle Inventory
With your licence confirmed and premises ready, the next step is stocking your dealership. There are several ways to source vehicles:
- Attending dealer-only auctions (your LMCT licence gives you access to these)
- Trade-ins from private buyers
- Wholesale purchases from other licensed dealers
- Fleet disposals from businesses or government agencies
The type of vehicles you stock will depend on your target market, available capital, and storage capacity. Starting with a focused niche — such as budget vehicles, SUVs, or commercial vehicles — is often a smarter approach than trying to offer everything at once.
If you’re also considering trading in trucks or commercial vehicles, it’s worth exploring whether you need a Truck Dealer Licence Victoria to legally sell heavy vehicles alongside passenger cars.
Step 5: Understand Your Ongoing Compliance Obligations
Holding an LMCT licence isn’t just about getting approved once. You have ongoing obligations you must meet to keep your licence active and stay on the right side of Consumer Affairs Victoria.
These include:
- Displaying your licence prominently at your dealership premises
- Providing statutory warranties as required under the Motor Car Traders Act
- Maintaining accurate records of all vehicles bought and sold
- Ensuring all advertising is truthful and not misleading
- Renewing your licence before it expires each year
Dealers who don’t stay on top of compliance obligations can face audits, penalties, or licence suspension. Our guide on Top LMCT Licence Compliance Mistakes Dealers Should Avoid is a useful checklist to review regularly as your business grows.
You should also understand the risks of operating outside the rules. What Happens If You Sell Cars Without an LMCT Licence in Australia? explains the legal consequences — which reinforces why maintaining compliance matters not just at setup but throughout your career as a dealer.
Step 6: Build Your Sales Process and Customer Systems
A successful dealership is built on more than stock and a licence. You need a clear, professional sales process that builds trust with buyers and protects you legally.
At a minimum, you should have:
- A standard sales contract that complies with Victorian consumer law
- A clear process for conducting vehicle inspections before purchase
- A transparent system for communicating warranty obligations to customers
- A complaints handling process in case disputes arise
Building a reputation as a trustworthy dealer is one of the most valuable things you can do in the early months. Buyers who have a good experience become repeat customers and refer others.
Step 7: Plan for Licence Renewal from Day One
Your LMCT licence must be renewed annually. Missing the renewal deadline or failing to meet renewal requirements can result in you being unable to trade, which is a serious disruption to any business.
We recommend setting calendar reminders well ahead of your renewal date and reviewing our Renewing Your LMCT Licence: Key Compliance Tips for 2026 guide to understand what you need to prepare. For a step-by-step walkthrough, you can also refer to our How to Renew Your LMCT Licence: Step-by-Step Guide for a detailed breakdown of the process.
Ready to Get Your Dealership Off the Ground?
Setting up a car dealership after receiving your LMCT licence is an exciting but complex process. The steps outlined in this guide will help you navigate the setup phase with confidence, avoid common pitfalls, and build a business that meets all of its legal obligations.
If you still need to apply for your licence or want professional assistance ensuring your application is completed correctly, contact us today to find out how we can help streamline the process for you.
Frequently Asked Questions
You can begin trading as soon as your licence is issued, provided your premises are compliant and your business structure is properly set up. There is no additional waiting period, but you must have everything in order before making your first sale.
In Victoria, the LMCT licence covers both motor cars and trucks under a single licence category. However, the type of vehicles you are licensed to trade is determined during your application. If you want to trade in trucks as well as passenger vehicles, it is worth confirming your licence covers both vehicle types. You can learn more on our Truck Dealer Licence Victoria page.
Your dealership site must be zoned appropriately for vehicle sales, have adequate space for display and storage, and comply with any council-imposed conditions. Inspectors will look at access, signage, office facilities, and site security.
LMCT licences in Victoria must be renewed annually. You will receive a renewal notice from the Business Licensing Authority before your licence expires. It is important to renew on time to avoid any interruption to your trading.
Consumer Affairs Victoria conducts compliance audits of licensed dealers. Inspectors may review your records, contracts, advertising, and premises.
If you plan to sell four or more vehicles per year in Victoria, you are legally required to hold an LMCT licence regardless of the scale of your operation.
