If you’re planning to enter the motor vehicle trade in Victoria, one of your first big decisions is whether to buy an existing dealership or build your business from the ground up. Both paths are valid — but they come with very different licensing journeys under the Licensed Motor Car Trader (LMCT) framework. Understanding those differences early can save you weeks of delays, unexpected costs, and a whole lot of stress.
This guide breaks down exactly what changes depending on which route you choose, what the Business Licensing Authority (BLA) looks for in each case, and how to give your application the strongest possible chance of approval.
What Is an LMCT Licence and Why Does It Matter?
In Victoria, anyone who buys and sells four or more motor vehicles per year — whether as an individual, a partnership, or a company — is legally required to hold a LMCT licence. Trading without one can result in serious criminal penalties, not just a fine.
The licence is issued by the Business Licensing Authority and is governed by the Motor Car Traders Act 1986. It applies to both passenger vehicles and commercial trucks, though the specific requirements can differ slightly depending on what type of vehicles you intend to trade.
Whether you’re buying an established business or setting up your own yard, you personally need to satisfy the BLA’s requirements. The licence doesn’t automatically transfer with the business — and this is one of the most important things to understand before you sign anything.
Buying an Existing Dealership: What You Need to Know
The Licence Does Not Transfer With the Business
This surprises many first-time buyers. When you purchase an existing car dealership, you are buying the business assets — the stock, the premises, the goodwill, maybe the staff — but the previous owner’s LMCT licence does not carry over to you. You must apply for a fresh licence in your own name (or in the name of your company or trust).
This means you need to factor the licensing timeline into your settlement planning. If you intend to trade from day one of ownership, you’ll want to begin your application well before the business changes hands.
Advantages of Buying an Existing Operation
Despite the licensing formality, buying an established dealership does offer some practical advantages when it comes to your application:
- Premises already approved: An existing dealership will typically already have the necessary zoning and planning approvals in place. This removes one of the more unpredictable steps from the LMCT process.
- Demonstrated trade location: The BLA wants to see a legitimate, accessible trading premises. A functioning dealership lot ticks that box immediately.
- Business history as reference: While you’re a new licence applicant, the business’s track record can support your financial projections and business plan.
- Existing cash flow projections: Your cash flow statement and business plan — both required for the application — can draw on real historical trading data from the business.
That said, none of this removes the need for proper documentation. The BLA still needs to assess you — your character, your financial position, your knowledge of your obligations as a motor car trader.
Watch Out for Compliance History
Before you buy, it’s worth investigating the compliance history of the business. If the previous operator had disputes with Consumer Affairs Victoria, outstanding fines, or a poor record of statutory compliance, that history doesn’t vanish just because the ownership changed. While it won’t automatically sink your application, it may prompt the BLA to scrutinise your application more carefully. To understand the kinds of mistakes to steer clear of, read our guide on top LMCT licence compliance mistakes dealers should avoid.
Starting a New Dealership From Scratch: What You’re Taking On
More Moving Parts, But Full Control
Building your own motor car trading business from the ground up gives you the freedom to set everything up exactly as you want. But it also means you’re responsible for creating all the foundations that an existing dealership already has in place.
Here’s what you’ll need to establish before or during your LMCT application:
- A compliant trading premises with the right zoning for motor vehicle sales
- A planning permit from your local council (in many cases)
- A signed lease or proof of ownership of the premises
- A business structure — sole trader, company, partnership, or trust
- A realistic business plan and cash flow statement prepared from scratch
- Appropriate business registration and ABN setup
The premises step is particularly important and often underestimated. Many councils now require a planning permit before they’ll endorse a motor vehicle trading site. This step alone can add weeks or even months to your timeline. If you haven’t already, our article on why planning permits are the new critical step in your LMCT application is essential reading.
Business Plan and Financial Accounts
When starting fresh, your cash flow statement and business plan must be built from projections rather than historical data. The BLA wants to see that your numbers are realistic and that you understand the actual costs and revenue expectations of running a licensed dealership. A poorly prepared business plan is one of the most common reasons applications hit delays or face rejection. To avoid the most common traps, take a look at five mistakes to avoid when applying for an LMCT licence.
The Test and Your Statutory Knowledge
Regardless of whether you’re buying or building, every new LMCT applicant is required to sit a test administered by the Business Licensing Authority. This test assesses your knowledge of your obligations under the Motor Car Traders Act — things like cooling-off rights, odometer disclosure requirements, and warranty obligations.
For new entrants building from scratch, this test is often the final hurdle after all documentation has been submitted. Preparing thoroughly is essential — if your application is refused, you cannot reapply for two years, and you lose your application fee.
Side-by-Side: Key Licensing Differences
| Requirement | Buying Existing Dealership | Starting From Scratch |
|---|---|---|
| LMCT licence transfer | Not possible — fresh application required | Fresh application required |
| Premises approval | Often already in place | Must be sourced and approved |
| Planning permit | Usually existing | May need to apply fresh |
| Business plan | Can draw on historical trading data | Must be built from projections |
| Business structure setup | May already exist | Must be established from scratch |
| BLA knowledge test | Required for all new applicants | Required for all new applicants |
| Timeline risk | Lower (less setup required) | Higher (more steps involved) |
How the Application Process Works Either Way
Regardless of your starting point, the LMCT application process follows the same general path through the Business Licensing Authority. You’ll need to submit documentation covering your identity, your premises, your financial position, your business structure, and your business plan.
The online application form has a strict completion window, which means you need to have all your documents ready before you begin. Missing even one item can cause the entire application to lapse, forcing you to start again from scratch.
Professional help at this stage is not just a convenience — it’s a practical safeguard. A qualified accountant or agent who understands the LMCT framework can ensure your documents are complete, your figures are credible, and your application gives you the best chance of a smooth assessment. You can learn more about what the process involves and why having the right support matters so much.
After You’re Licensed: Ongoing Obligations
Once your LMCT licence is granted, your responsibilities don’t stop there. Licensed traders must maintain compliance with Consumer Affairs Victoria’s requirements on an ongoing basis — including proper record-keeping, trust account management, and vehicle disclosure obligations.
Your licence also needs to be renewed regularly. Missing the renewal window or failing to meet the compliance requirements at renewal time can put your licence at risk. For a detailed walkthrough of what’s involved, our step-by-step guide to renewing your LMCT licence covers everything you need to stay on track. You can also check out our key compliance tips for 2026 to stay ahead of current requirements.
If your dealership focuses on commercial vehicles, you’ll want to ensure you also understand the specific requirements for truck dealer licensing in Victoria, which has its own set of obligations and documentation requirements.
Which Path Is Right for You?
There’s no universal answer — it depends on your circumstances, your budget, your risk tolerance, and how quickly you want to start trading.
Buying an existing dealership generally offers a faster path to a licensed operation, provided you begin your LMCT application early in the acquisition process. Starting fresh gives you more control and avoids inheriting any baggage from a previous operator, but it requires more groundwork and a longer runway before you can legally begin trading.
In either case, the quality of your LMCT application matters enormously. The BLA is thorough, and incomplete or poorly prepared applications are a common source of delays. Working with professionals who understand the requirements — and who can prepare your financial accounts, business plan, and documentation correctly — significantly improves your chances of a first-time approval.
For a deeper understanding of what’s involved in obtaining your motor vehicle trading authorisation, visit our car dealer licence Victoria service page.
Ready to apply for your LMCT licence?
Whether you’re buying an existing dealership or building something new, our team can guide you through every step of the LMCT application process — from documentation and business planning to preparation for the BLA knowledge test.
Get in touch today to find out how we can help you get licensed faster and with confidence.
Frequently Asked Questions
No. An LMCT licence is issued to a specific individual, company, or trust — it cannot be transferred to a new owner. When you purchase an existing dealership, you must apply for your own LMCT licence before you can legally trade. Make sure you factor the application and assessment timeline into your business handover planning.
The timeline varies depending on how complete and accurate your application is. A well-prepared application can be processed within a few weeks, but if the BLA needs to request additional information or scrutinise your documentation, it can take several months. Starting the process early — especially when buying an existing business — is strongly recommended.
Not necessarily — if the existing premises already has the appropriate planning approvals for motor vehicle trading, you may be able to rely on those. However, you should verify this during your due diligence, as zoning conditions and council requirements can change over time. If any doubt exists, check with your local council before settling on the purchase.
The application requires a range of documents including proof of identity, premises lease or ownership documents, council planning approvals, a business plan, a cash flow statement, financial accounts, and various consent and indemnity forms. The full list depends on your individual circumstances and business structure. Missing even one document at the time of lodgement can cause significant delays.
If the BLA refuses your application, you cannot trade as a motor car trader and you cannot lodge another application for two years unless the BLA grants special permission. You also forfeit the application fee. This makes the quality of your initial application critically important — getting professional help is strongly advisable.
Yes. While both fall under the LMCT framework, trading in trucks has specific requirements and compliance obligations that differ from passenger vehicle trading. If you intend to deal in commercial vehicles, you should ensure your application and ongoing practices reflect those requirements. You can read more about [understanding truck dealer licence obligations — future content] on this site.
Yes. Consumer Affairs Victoria maintains a public register of licensed motor car traders. Verifying this is an important part of due diligence when buying an existing business. You can also check whether a dealer is properly licensed before any transaction — something we cover in our guide on how to check if a truck dealer is licensed before buying.