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Starting a mechanic workshop has the ability to be a very profitable business. Decades of consistent lobbying by enthusiastic motor vehicle groups led the government to impose licensing laws for motor-vehicle-repair businesses. The Australian Consumer Law (ACL) is Australia’s national consumer law, replacing previous consumer protection laws across the country. The protections that it provides for mechanic workshops has many advantages, including:

  • stopping unqualified vehicle repairs;
  • improving workshop conditions; and
  • improving service standards.

This article explains which legal documents you will need to set up a mechanic workshop. It will also explain your rights and obligations to customers.

Which Legal Documents Do I Need?

A motor-vehicle-repair business license is required to operate your own vehicle repair business. A sole trader, a partnership or proprietary company can make an application for this license.

Individuals working without supervision in such businesses need to be certified. Further licenses and certification are required for certain classes of work. Some of the occupations under these classes of work include:

  • approved examiners of secondhand vehicles;
  • safety certification examiners;
  • modifying or altering vehicles;
  • operating a crane; or
  • gas installation.

Businesses offering courtesy transportation should have certification to operate public passenger service in the state.

It is also important to ensure that you enter into a client agreement with every customer. This is a binding contract which protects both your business and your customers.

Term and Expiry

Business licenses are issued for three years and applications for renewal must be submitted 28 days before expiry. As a mechanic, you should always be sure that you’re applying for the relevant legal documents at the appropriate office (noting that mechanics in Victoria do not require a licence):

State Office
Australia Capital Territory

Office of Regulatory Services

www.ors.act.gov.au

Western Australia

Consumer Protection Licensing Branch, Department of Commerce

www.commerce.wa.gov.au

New South Wales

Office of Fair Trading

www.fairtrading.nsw.gov.au

Tasmania

Consumer Affairs and Fair Trading

www.consumer.tas.gov.au

Queensland

Office of Fair Trading

www.fairtrading.qld.gov.au

South Australia

Consumer and Business Services

www.cbs.sa.gov.au

Northern Territory

Consumer Affairs

www.consumeraffairs.nt.gov.au

 

Qualification

As an applicant, you must have a suitable premise, along with the required tools and equipment. You also must also employ trained and certified staff for each class of work that the business undertakes.

Having a registered license will instil confidence in your customers and legitimise your business. Licensing fees are not a tax imposed on the motor repair industry. Rather, licensing fees simply cover the cost of processing the application. Licensing of repair businesses provides protection from unlicensed mechanics that compete for your customers. In addition, penalties for unlicensed repair work can reach $50,000. Furthermore, licensing allows access to general legal advice services regarding technical matters, such as consumer disputes. This could be advantageous if have a dissagreement with a customer or employee.

The Integrated Development Assessment System (IDAS) application has to be filed for new and existing premises. Furthermore, playing videos or music in your premise requires a Music License. Auto-body repair businesses must also comply with the State’s Tobacco laws.

Key Takeaways

Starting a motor vehicle repair business can become a profitable venture, but there are important legal considerations that you should understand before starting your business. You should consider:

  • which legal documents you will need;
  • the term and expiry of these documents; and
  • what qualifications will be required of your staff

If you have any more questions about starting a mechanic business, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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