The government has banned cash for scrap cars in Sydney – and with good reason.
Car theft is big business, and in Sydney alone, 5000 cars are stolen every year.
These cars are sold to unregistered scrap car dealers who strip the car of its parts and sell them for money here or overseas.
They then melt the body of the car down – selling it off as newly recycled metal.
The only way to identify a car is through the Vin number on its chassis. Once the car is melted, however, so is the chassis and the VIN number, with it.
A big business, calculations done by consulting firms indicate that the market for stolen cars might be as big as $27 million annually.
Government stands to gain from the crackdown
If we assume taxes on income from cash for car sales to be as low as 20%, the direct tax state governments in New South Wales stand to earn is $5.2 million – in perpetuity. Over a ten-year period, total tax revenue earned or lost is in the region of $50 million plus.
Cash ban to put a stop to the rampant car thefts in Sydney
It is believed that the place missing cars end up is car scrap yards – unregistered ones (the registered yards welcome scrutiny and have no problem with it, whatsoever).
Because of the nature of scrap car sales, many of those selling cars need cash in a hurry – for emergency use. Some of these ‘emergencies’, unfortunately, are alcohol or drug related.
The new laws will help the government in New South Wales to arrest the number of car thefts happening in the city – plus prevent drug money from being laundered through the facilities unregistered car yards.
Is it safe to sell a car to an unregistered cash for car dealer?
No. At this point, the dealer is responsible for ensuring the car is purchased from its rightful owner and that the transaction has been made through proper banking channels – cash of EFT (Electronic Funds Transfer). If a dealer is investigated by the Police, you could be investigated as well, even though you have innocently sold a vehicle that rightfully belonged to you.
The fines are as stiff as a double scotch on the rocks is
Authorities can charge cash for car dealers up to $30,000 in fines if they’ve purchased a scrap car and the transaction has occurred using cash – rather than available banking channels.
Police now have powers to enter a car yard and search it without requiring a warrant to do so.
What you can do if you run an ‘unregistered scrap car operation’ – tie up or sell it to a registered car yard with a good reputation for honest dealings behind them. Or you can register your business and conduct all transactions through banking channels from here on.
The law will not tolerate a cash economy in the used car industry any more
If you buy cars for cash – you should stop doing so immediately. If you are caught, plainclothes police officers and detectives do patrol the industry – you may lose your licence to conduct business and you and members of your staff may also be arrested.
Only Sell Your Old or Scrap Car To Registered Cash for Car Companies
Car sellers should ensure that they only sell their scrap or damaged cars to registered cash for car companies. When you sell your car, payment will be done by EFTPOS or through cheques. If a cash for car buyer offers to pay in cash, you would do well to steer clear of them.