If you’re planning to buy and resell used items in Victoria, Australia, you’ll quickly run into two terms that sound alike but work very differently: the second-hand dealer licence and the LMCT. Confuse them and you could face fines or a stalled launch.
LMCT stands for Licensed Motor Car Trader, the licence Victoria requires for anyone trading vehicles as a business. Here’s what each covers, where they overlap, and how to choose.
The Short Answer
The easiest way to remember it: vehicles need an LMCT, while most other used goods fall under second-hand dealer rules.
- LMCT: required to buy, sell, or exchange motor vehicles as a business. It’s issued under the Motor Car Traders Act 1986 and administered by Consumer Affairs Victoria (CAV).
- Second-hand dealer registration: for businesses trading used goods such as car parts, jewellery, or scrap metal, under the Second-hand Dealers and Pawnbrokers Act 1989. Technically Victoria calls this a registration rather than a licence, though most people search for it as a licence.
Importantly, CAV states that second-hand dealer registration does not cover a business that trades in motor vehicles.
What Is an LMCT Licence?
An LMCT licence is the legal green light to trade vehicles commercially. It confirms that you, your finances, and your premises meet the standards set out in the Motor Car Traders Act 1986, the core rulebook for the industry.
As a general guide, CAV expects a licence if you deal in four or more cars a year, and sometimes fewer. If you’re unsure where the line sits, it helps to understand the difference between an LMCT licence and private car selling.
Applications are assessed by the Business Licensing Authority, which checks identity, background, and financial standing. Trading without approval can lead to serious consequences, outlined in this breakdown of what happens if you sell cars without a licence.
Who Typically Needs an LMCT?
- Used car yards and independent dealerships
- Wholesalers and regular buy-and-resell traders
- Truck and commercial vehicle sellers
If you’re opening a yard, the process of getting a car dealer licence includes local zoning and premises checks. Heavy-vehicle sellers should also review the requirements for a truck dealer licence, since trucks usually need larger, industrial-zoned sites.
What Is a Second-Hand Dealer Registration?
Second-hand dealer rules apply to businesses that buy and resell pre-owned goods, such as jewellery, electronics, tools, and scrap metal. The focus is less about consumer warranties and more about stopping stolen goods from moving through the resale market.
Registered dealers typically must:
- Verify the identity of people selling goods to them
- Record each transaction
- Hold certain goods for seven days before reselling
- Cooperate with police on stolen-goods inquiries
Registration is processed through the Business Licensing Authority, and police hold strong oversight powers. For the full process, see this guide to second-hand dealer registration in Victoria.
Second-Hand Dealer Licence vs LMCT: Side-by-Side
Factor | LMCT | Second-Hand Dealer Registration |
|---|---|---|
What it covers | Motor vehicles such as cars and trucks | Used goods such as parts, jewellery, and scrap |
Main law | Motor Car Traders Act 1986 | Second-hand Dealers and Pawnbrokers Act 1989 |
Main focus | Consumer protection and trader standards | Preventing stolen goods being resold |
Can you sell vehicles? | Yes | No |
Can you sell car parts? | Yes, without separate registration | Yes, for parts-only businesses |
Typical business | Car yard or truck dealer | Parts seller or used-goods reseller |
Where the Two Overlap: Car Parts and Wreckers
The grey area is usually car parts. An LMCT holder can deal in second-hand motor car parts without separate registration, but must still follow the record-keeping rules of the second-hand dealer law. An auto wrecker who only buys and sells parts, or written-off vehicles that can never return to the road, registers as a second-hand dealer instead.
That changes once vehicles enter the picture. Buying vehicles from the public to dismantle for scrap, or selling vehicles to the public, generally calls for an LMCT. For a deeper look, see auto wrecker and car parts trading rules and scrap metal dealer laws in Victoria.
Selling machinery instead of road vehicles? The answer differs again, so check whether you need a licence to sell plant and equipment.
Which One Do You Need?
- Selling used cars, trucks, or other road vehicles: LMCT
- Selling only parts or accessories: second-hand dealer registration
- Selling vehicles and parts: LMCT, plus record-keeping duties
- Trading jewellery, electronics, or scrap: second-hand dealer registration
- Selling your own car occasionally: usually neither
Lending money against pledged goods is a separate pawnbroker endorsement, explained in pawnbroker vs second-hand dealer.
Common Mistakes to Avoid
- Assuming second-hand registration lets you sell cars
- Trading before your licence is approved
- Signing a lease before confirming the site’s zoning
- Keeping incomplete or inconsistent transaction records
How to Start Your LMCT Application
Most applicants follow the same path: confirm you’re 18 or older, a fit and proper person, and financially capable; check that your premises are zoned for vehicle trading; gather identity, police check, bank statement, and cash flow documents; then lodge through myCAV and attend an interview. Processing often takes 8 to 14 weeks, depending on how complete your paperwork is.
Our step-by-step application process walks through each stage. If you’d rather have expert help, you can book a consultation with a licensing specialist.
Licensing Support Across Victoria
Apply LMCT supports traders across Victoria, including Melbourne, Ballarat, Geelong, Bendigo, Shepparton, Wodonga, and Warrnambool, as well as suburban hubs like Dandenong, Brighton, Cheltenham, and Springvale, who all work under the same state-wide framework. Knowing which licence applies before you trade is the surest way to stay compliant.
Frequently Asked Questions
No. An LMCT covers motor vehicles, while second-hand dealer registration covers used goods such as parts, jewellery, and scrap metal.
Not if you only sell parts. You’d register as a second-hand dealer instead. LMCT holders may deal in parts without separate registration.
No. Second-hand dealer registration doesn’t cover motor vehicle trading. Selling vehicles as a business requires an LMCT.
Generally, dealing in four or more cars a year requires a licence, and sometimes fewer, so check your situation with CAV.
Applications go through Consumer Affairs Victoria and are assessed by the Business Licensing Authority.
It often takes 8 to 14 weeks, depending on how complete your documents are and whether your premises zoning is confirmed.
It’s a breach of the Motor Car Traders Act 1986 and can lead to fines, forced closure, and legal action.
Only if buying vehicles from the public to dismantle, or selling vehicles that can return to the road. Parts-only wreckers register as second-hand dealers.
Not for motor car parts. If you also trade other used goods, such as jewellery, second-hand dealer registration may still apply.
