To start an auto repair shop in Australia, you need a qualified mechanic on the tools, a registered business, a workshop your council will approve, the right insurance and, in NSW, WA or the ACT, a motor vehicle repairer licence. Get those in the right order and everything else is running a business.
Here’s the catch. Most mechanics who go out on their own are brilliant with a scan tool and would rather rebuild a gearbox than fill in a licence application. So the admin waits until something forces it: a landlord asking for a certificate of currency, a customer disputing a bill, an inspector at the door. This guide puts the paperwork in the order that saves you money.
- Only NSW, WA and the ACT have a general motor vehicle repairer licence. Queensland, Victoria, SA, Tasmania and the NT don’t, although specific work like roadworthies and air-con still needs its own approval.
- Check licensing and zoning before you sign a lease. A workshop lease locks you in for years, and the site has to be approved for vehicle repairs before it earns you a cent.
- Public liability alone won’t cover customer cars. Most policies exclude property in your care, custody or control, so you need motor trades cover for vehicles on your hoists.
- Independent shops have a legal right to buy manufacturer repair data. The information sharing scheme has applied since 1 July 2022, with extra accreditation for safety and security information.
- A failed repair can cost more than the job itself. Under the Australian Consumer Law, customers can claim foreseeable losses such as towing and a hire car on top of a fix or refund.
How do you start an auto repair shop, step by step?
Order matters more than most guides admit. The expensive mistakes happen when someone signs a lease (step 5) before checking licensing (step 2).
- Decide what kind of shop you are. General servicing, auto electrical, air-con, tyres, roadworthies or a mix. Your services decide your licences, your equipment and your insurance.
- Check licensing for your state and services. Do this before you spend a dollar on premises. The state-by-state breakdown is below.
- Write a lean business plan. Startup costs, pricing and cash flow for the first six months. A business plan template keeps you focused on the numbers that matter.
- Choose your structure and register. ABN, business name, a company if you’re incorporating, and GST once you expect turnover of $75,000 or more.
- Find and secure premises. Zoning, council approval and environmental set-up first. The lease comes last.
- Insure before you open. That includes cover for customer vehicles, which standard policies leave out.
- Put your paperwork in place. Terms of trade, job authorisations, employment contracts.
- Hire, open and keep records. Quotes, approvals, parts and labour for every job. Future you will thank you.
Going mobile instead? The steps are mostly the same, minus the lease. Our guide to starting a mobile auto repair business covers the differences. Note that NSW licensing applies to mobile mechanics too.
Do you need a motor vehicle repairer licence to open an auto repair shop?
Only in three places. NSW, Western Australia and the ACT require the business to hold a motor vehicle repairer licence. Queensland, Victoria, South Australia, Tasmania and the Northern Territory have no general repairer licence.
That surprises people. Plenty of guides online still claim every state except Victoria needs one. They’re wrong: Queensland’s own start-up guide for motor repair businesses says you don’t need an official licence to be a motor repairer.
| State or territory | General repairer licence? | Who to talk to | Watch out for |
|---|---|---|---|
| NSW | Yes | NSW Fair Trading | Licence covers mobile repairers; tied to classes of repair work |
| WA | Yes, plus individual certificates | Consumer Protection | Three-year business licence; certificates for unsupervised repairers |
| ACT | Yes | Access Canberra | One-year or five-year trader licence; home-based shops included |
| QLD | No | Transport and Main Roads (for safety certificates) | Approved Inspection Station approval to issue safety certificates |
| VIC | No | EPA Victoria, VicRoads | Licensed vehicle tester scheme for roadworthies; EPA waste rules |
| SA, TAS, NT | No | Check ABLIS for your services | Activity-specific approvals still apply |
NSW motor vehicle repairer licence
NSW Fair Trading issues motor vehicle repairer licences under the Motor Dealers and Repairers Act 2013 (NSW). You need one if you own a repair business, work as a self-employed repairer or run a mobile repair business. The detailed rules now sit in the Motor Dealers and Repairers Regulation 2025, which replaced the 2014 regulation that older articles (including the previous version of this one) still quote.
Licences are tied to classes of repair work. You need the right qualifications for each class you offer, so adding auto electrical or air-con work later can mean updating your licence. Fair Trading also checks that you’re a fit and proper person with enough financial resources to run the business.
WA motor vehicle repair business licence
WA licenses both layers. The business needs a motor vehicle repair business licence under the Motor Vehicle Repairers Act 2003 (WA), issued by Consumer Protection for three years. Anyone doing repair work without supervision needs their own repairer’s certificate. Subcontracting counts as running a repair business, so a one-person operation still needs the business licence.
Some work is exempt: washing, window tinting and fitting accessories that don’t affect performance, safety or security. Fitting a bull bar near airbag sensors is not that.
ACT motor vehicle repairer licence
Access Canberra licenses repairers under the Traders (Licensing) Act 2016 (ACT). You can choose a one-year or five-year trader licence, and the five-year option works out cheaper per year. Running the business from your garage at home doesn’t get you out of it.
Queensland: no licence, but read the fine print
Queensland has no general repairer licence. Good news. The catch is that the work customers want most has its own approval. To issue safety certificates for second-hand vehicles, you need approval as an Approved Inspection Station through the Department of Transport and Main Roads, with examiners who meet its qualification and experience rules.
Victoria: no licence, plenty of rules
Victoria has no general licence either. Workshops still answer to EPA Victoria for waste oil, solvents and batteries, and to WorkSafe for hoists and chemicals. Issuing roadworthy certificates needs licensed vehicle tester approval. Sell cars on the side and you’ll need a motor car trader licence.
SA, Tasmania and the NT
None of these has a general licence for mechanical workshops. Specific activities still need approvals, so run your planned services through the Australian Business Licence and Information Service (ABLIS) before you commit to premises. It produces a checklist for your location and the work you’ll do.
Which jobs need their own licence, wherever you are?
- Air-con work. Technicians need a refrigerant handling licence from the Australian Refrigeration Council, and the business needs a refrigerant trading authorisation. This is Commonwealth law, so it applies in every state.
- Roadworthies, pink slips and safety certificates. Each state runs its own inspection scheme with its own approvals.
- LPG and gas systems. Gas fitting work needs separate authorisation from your state’s gas regulator.
- Heavy vehicles. Separate qualification and inspection requirements apply above 4.5 tonnes.
The licence that trips people up is rarely the business licence. It’s the add-on service they started offering six months in.
Which business structure suits an auto repair shop?
For a workshop with a lease, staff and other people’s cars on your hoists, a company is usually the right call. It separates the business’s debts and claims from your house. A sole trader setup works for a solo mobile mechanic testing demand, as long as you decide in advance when you’ll switch.
| Sole trader | Company (Pty Ltd) | |
|---|---|---|
| Setup | ABN and business name, low cost | ASIC registration plus annual review fee |
| Personal liability | You’re personally liable for everything | Limited to the company, apart from guarantees you sign |
| Tax | Personal tax rates | Company tax rate; profits paid out are taxed again in your hands, with credits |
| Best for | Solo mobile mechanic testing demand | Workshop with a lease, staff or fleet clients |
Here’s the trap. Landlords and parts suppliers will ask directors to personally guarantee the company’s lease and trade accounts. Sign those and your limited liability shrinks fast. Read every guarantee before you read the rent.
Switching later is doable but fiddly. Licences in NSW, WA and the ACT are issued to a specific person or entity, so a new company can mean a fresh application. Your lease, insurance, trade accounts and brand all need moving across. If you’re torn, our guide to choosing a business structure walks through the trade-offs.
Registering your auto repair shop
- ABN. Every business needs one. Register your ABN before you open supplier accounts.
- Company. If you’re incorporating, register your company with ASIC and get your ACN. Each director also needs a director ID.
- Business name. Needed if you trade under anything other than your own name or company name. Register your business name once you’ve checked it’s free.
- GST. Compulsory once turnover hits $75,000. Parts sales push most workshops past that quickly.
- PAYG withholding and workers compensation. Both kick in when you hire your first employee.
One correction to the old version of this guide. Registering a business name lets you trade under it. It does not give you ownership of the brand or stop a competitor using something similar. A registered trade mark does that, across Australia, for the services you register it for.
What should you check before signing a workshop lease?
This is where the biggest money gets lost. A lease commits you for years, and a workshop lease brings problems a shopfront never has.
- Zoning and council approval. Confirm the site allows vehicle repairs. A change of use application can take months, and you’ll pay rent while you wait.
- Environmental set-up. Bunding for oils and coolants, a trade waste agreement for wash-down water, and licensed collection for waste oil and batteries.
- Physical fit. Ceiling height and slab strength for hoists, bay width, and parking for customers dropping cars off.
- Make-good clause. Who pays to clean oil-stained floors and remove hoists when you leave? Push for a fair answer before signing.
- Pre-access conditions. Most landlords want a certificate of currency for your insurance and the bond paid before you get keys.
A sequence we see in Lawpath consultations goes like this. Rent is agreed, the fit-out is booked, then signing stalls over execution formalities or the landlord’s pre-access checklist. Ask the agent for the full list on day one. Then have one of our business lawyers review the lease before you sign, while you still have bargaining power.
What insurance does an auto repair shop need?
Insurance for auto repair shops has one gap that catches new owners out. Standard public liability policies usually exclude damage to property in your care, custody or control. Every customer car on your premises is exactly that.
- Public liability. Covers injuries to customers and third parties, and damage to their property outside that exclusion. Our public liability insurance guide explains what it does and doesn’t cover.
- Motor trades or customer vehicle cover. Protects cars while they’re in your hands. Ask specifically about test drives and vehicles left overnight.
- Product liability. For parts you supply and fit.
- Workers compensation. Compulsory in every state and territory once you employ anyone. The old version of this guide called it optional. It isn’t.
- Tools, equipment and business interruption. A fire that takes out your hoists takes out your income too.
Ask your broker one more question: do my customer terms match my policy? If your terms promise a loan car when repairs run late and your policy won’t pay for it, that gap is yours.
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Can independent auto repair shops get manufacturer repair data?
Yes, and it matters more than most startup guides let on. Since 1 July 2022, the Motor Vehicle Service and Repair Information Sharing Scheme under the Competition and Consumer Act 2010 (Cth) has required car manufacturers to sell independent repairers the same service and repair information they give their own dealer networks, at a fair market price.
Safety and security information, such as immobiliser and key coding data, has an extra gate. Technicians need accreditation through the Australian Automotive Service and Repair Authority (AASRA), which includes fit and proper person checks.
Budget for the data, not just the hardware. Shops that buy a scan tool but skip the subscriptions behind it find out the hard way, usually on their first European car.
How does Australian Consumer Law apply to your workshop?
Every repair comes with consumer guarantees you can’t contract out of. Your work must be done with due care and skill, be fit for any purpose the customer told you about, and be finished within a reasonable time. Parts you supply must be of acceptable quality.
Major and minor failures
When a repair fails, the remedy depends on how badly. A minor failure lets you choose to fix it, free and within a reasonable time. A major failure lets the customer cancel and get a refund, or keep the work and claim the drop in value. On top of either, they can claim reasonably foreseeable losses like towing or a hire car.
Plenty of workshop disputes aren’t about the repair at all. They’re about the bill. A customer approves a brake job, you find seized calipers, you fix those too, and the invoice comes in at double the quote.
The fix is boring and it works. Give written quotes, and do no extra work without the customer’s recorded approval. Bake that process into your terms of trade so it’s agreed before the job starts.
Warranties and logbook servicing
If you offer your own warranty on parts or labour, the ACL requires specific mandatory wording for a warranty against defects. Use it word for word. Never phrase a warranty as if it replaces the consumer guarantees.
Logbook servicing is a selling point worth shouting about. The ACCC’s position is that a manufacturer can’t void a new car warranty just because an independent shop did the service, provided you follow the manufacturer’s specifications and use suitable parts. Record exactly what you used.
Does the insurance repair code apply to you?
The previous version of this guide said every repairer must comply with the Motor Vehicle Insurance and Repair Industry Code of Conduct. That overstated it. The code is a voluntary industry code covering the relationship between smash repairers and insurers. Run a mechanical workshop with no insurance-funded panel work and it won’t shape your day.
What legal documents does an auto repair shop need?
You don’t need everything on day one. You do need the first row before the first car arrives.
| Document | What it covers | When you need it |
|---|---|---|
| Terms of trade | Quotes, job approvals, storage fees, payment terms, warranty wording | Before your first job |
| Services agreement | Rates, priority booking and credit terms for fleet and business clients | Your first fleet account |
| Employment agreements | Duties, award coverage, tools and hours | Your first hire |
| Subcontractor agreement | Scope, pricing, insurance and safety for auto electricians or overflow work | The first time you subcontract |
| Privacy policy | How you handle names, phone numbers, addresses and VINs | Before you take online bookings |
Fleet accounts deserve their own note. They bring steady work, and they also bring 30-day terms and credit risk. Write in the right to switch a customer to upfront payment if their account falls behind. That clause is far easier to agree at the start than after the first unpaid invoice.
Hiring your first mechanic
Most mechanics and apprentices in independent workshops fall under the Vehicle Repair, Services and Retail Award 2020. It sets minimum pay, tool allowances and apprentice wages, so check it before you advertise a role.
Put every hire on paper. Use a full-time employment agreement for permanent staff and a casual employment agreement for weekend or overflow help. Apprentices also need a training contract registered with your state training authority. The webinar below walks through the different types of employees and how each affects your business.
What we see in Lawpath consultations
Our lawyers don’t get asked how to adjust a handbrake. They do talk to trade and service business owners every day, and these four issues from recent consultations apply directly to a workshop.
- Incorporating but leaving things behind. Owners set up a company and keep the insurance, brand and contracts in their own name. Incorporating doesn’t wipe out exposure for work done as a sole trader, either. Move your insurance into the company’s name before it sends its first invoice.
- Warranties copied from the wrong template. Service businesses end up with product-defect wording that doesn’t fit what they sell. Keep a clause that preserves customers’ consumer law rights, and cut anything written for goods you don’t supply.
- Contracts that drift away from the insurance. An insurer approves one version of the terms, then the owner redrafts them without telling anyone. Run material changes past your broker so the protections still line up.
- Credit terms with no exit. Business customers sit on 30-day terms with no right to demand payment upfront when their risk rises. By the time the account is 90 days late, you have no bargaining power left.
None of these is hard to fix early. All of them are expensive to fix late. A Lawpath Legal Advice plan gives you ongoing access to lawyers as these questions come up, so the lease, the licence and the first dispute don’t each start from scratch.
Frequently asked questions
Do I need a motor vehicle repairer licence in Queensland?
No. Queensland has no general licence for motor repairers. You still need approval as an Approved Inspection Station to issue safety certificates, a refrigerant handling licence for air-con work, and environmental approvals for your site. Customers expect qualified mechanics, so qualifications matter commercially even without a licence.
Do I need a motor vehicle repairer licence in Victoria?
No. Victoria has no general repairer licence. Your workshop still answers to EPA Victoria for waste, WorkSafe for hoists and chemicals, and the licensed vehicle tester scheme if you issue roadworthy certificates. Selling cars as well means you need a motor car trader licence.
How long does a WA motor vehicle repair business licence last?
Three years. WA licenses the business under the Motor Vehicle Repairers Act 2003, and every repairer working without supervision also needs their own repairer’s certificate. Subcontracting repair work counts as running a repair business, so solo operators need the business licence too.
Does a mobile mechanic need a licence?
In NSW, WA and the ACT, yes. NSW Fair Trading’s licence expressly covers mobile repair businesses, and the ACT licence applies even if you work from home. In states without a general repairer licence, mobile mechanics follow the same rules as workshops for specific services like air-con.
Can I own an auto repair shop if I’m not a qualified mechanic?
Yes. Someone qualified has to do the work, though. In NSW, licensing is tied to qualifications for each class of repair work you offer, and in WA each unsupervised repairer needs a certificate. Many non-mechanic owners hire a qualified workshop manager from day one.
Do I need a licence to regas car air-conditioners?
Yes, in every state. Technicians need a refrigerant handling licence from the Australian Refrigeration Council, and the business needs a refrigerant trading authorisation to buy and hold refrigerant. These come from Commonwealth law, so they apply even where no repairer licence exists.
Will servicing a new car at my shop void the manufacturer’s warranty?
Not if you do it properly. The ACCC’s position is that a manufacturer can’t void a new car warranty just because an independent shop did the service. Follow the manufacturer’s specifications, use suitable parts and record what you used on the invoice and logbook.
Does public liability insurance cover customer cars in my workshop?
Usually not. Most public liability policies exclude property in your care, custody or control, which is every car on your hoists. You need motor trades or customer vehicle cover. Ask your broker specifically about test drives and cars left overnight.
If this feels like a lot, that’s normal. You spent years learning how cars work, not how licensing regimes do. You don’t have to tick everything off this week. Find the step you’re up to and do that one.
Your next move: set up your Terms of Trade before the first car rolls in. They cover quotes, approvals, storage fees and payment, which is exactly where most workshop disputes start.
