Consumer Affairs Victoria is launching a campaign on buying used cars after taking legal action against car dealers in the South East.
CMG Automotive Pty Ltd in Dandenong and CHM Motors Pty Ltd in Cranbourne had been suspended from trading in December 2024 after several customers were allegedly left out-of-pocket.
Consumer Affairs is now asking VCAT to permanently cancel CMG Automotive’s licence.
The two firms allegedly failed to deliver cars to customers, to pay or transfer stamp duty, and to return deposits on cancelled contracts.
More than 200 customers have so far claimed over $330,000 from the Motor Car Traders Guarantee Fund, after losing money dealing with CMG Automotive and CHM Motors.
The fund compensates Victorians who suffer financial loss as the result of dealing with a licensed car business that breaks the law, Consumer Affairs said.
According to Consumer Affairs, CHM traded as United Automotive Group.
CMG traded under several business names, including Automax Cars and Cranbourne Car Sales.
In a separate case, unlicensed Clayton car trader Zequn Wang, was this year convicted and fined $25,000.
Wang bought or sold 84 cars between January 2022 and September 2023. This is far greater than the four cars per year limit you can trade without a licence.
The Office of Public Prosecutions has now launched an appeal on Consumer Affairs’ behalf to the County Court, believing the sentence handed down was inadequate.
In Victoria, unlicensed traders face maximum penalties of up to $19,000, or 15 per cent of the sale price, for each car they buy, sell or exchange.
Consumer Affairs has launched a new campaign promoting the laws protecting consumers buying a second-hand car.
When buying from a licensed trader, customers are protected by a cooling-off period, clear title and warranty.
They also have access to compensation from the Motor Car Traders Guarantee Fund if things go wrong.
These strong protections are not available if buying from an unlicensed seller.
Demand for used cars rose 12 per cent nationally last year.
