The AADA and VACC were advised in December 2025 of proposed changes to the Motor Car Traders Act 1986 (Vic) (the Act) and Motor Car Traders Regulations 2018 (Vic) (the Regulations) that would significantly expand regulatory discretion, weaken existing safeguards for dealers and expose LMCTs to broader compliance, licensing and financial risk. However, due to confidentiality arrangements the regulators were unable to genuinely consult with industry. The proposed reforms were announced yesterday in the Victorian Legislative Assembly.
You can read the Consumer Legislation Amendment Bill 2026 and Explanatory Memorandum by taking the highlighted link.
What are the major changes for dealers to be aware of?
Some of the major changes that will impact dealers as Licensed Motor Car Traders (LMCT) are:
- That the role of determining consumer claims to be removed from the Fund Claims Committee and will be determined by the Director of Consumer Affairs Victoria (CAV).
- New regulation making powers to enable additional claims against the Fund to be prescribed.
- In the event that VCAT makes a monetary order against a LMCT in favour of a consumer, the Business Licensing Authority (BLA) will have the option to suspend or impose conditions on the Dealers trading licence.
- A modernisation to the prescribed used car warranty period.
- LMCTs being required to take reasonable steps to identify odometer tampering.
- Further expanding the requirements on auction houses to identify individual purchasing vehicles at auction and to notify CAV when a single party is involved in four or more sales per year.
- Other compliance and enforcement approaches.
About the Reforms
The AADA and VACC were neither consulted nor invited to participate in the development or review of these reforms before the Bill was tabled in the Victorian Parliament. That lack of consultation is deeply concerning given the breadth of the proposed changes and the direct operational, financial and reputational consequences they may have for Victorian dealers. The Bill shifts decision-making power away from existing checks and balances, broadens future regulation-making powers, and introduces new compliance burdens without any demonstrated evidence that the existing framework is inadequate.
The AADA and VACC are strongly concerned that the Bill, if passed in its current form, will materially disadvantage franchise dealers. The proposal to remove consumer claim determinations from the Fund Claims Committee and vest that authority in the Director of CAV reduces independence and risks concentrating too much discretion in a single office. The new regulation-making powers create uncertainty by allowing further classes of claims to be added later without the same level of parliamentary scrutiny. The ability for the BLA to suspend or impose conditions on a dealer’s licence following a monetary order by VCAT is a disproportionate response that could punish dealers beyond the tribunal process itself and threaten business continuity. Changes to warranty settings, new expectations around detecting odometer tampering, expanded reporting obligations on auction houses and other broader compliance and enforcement measures collectively point to a more punitive regime for LMCTs, with increased red tape and legal exposure but little assurance of better consumer outcomes.
The AADA and VACC will be working with all Victorian Parliamentarians with a view to securing a more balanced, evidence-based and pragmatic outcome.
Next Steps
The reforms have been scheduled to be introduced on 1 December 2027.
In his speech when delivering the second reading in the Victorian Legislative Assembly on the 4 June 2026 the Minister for Consumer Affairs Paul Edbrooke MP advised that any changes made by the regulations will be subject to consultation and a Regulatory Impact Statement .
The AADA and VACC will make submissions on behalf of our Victorian LMCT members.