In South Africa, all used motor vehicle dealerships are required to be registered as second-hand goods dealers in terms of the Second-Hand Goods Act, No. 6 of 2009 (SHGA). This legislation plays a crucial role in curbing the trade of stolen goods and maintaining transparency within the second-hand market.
While most dealerships are aware of the need to register, many overlook the conditions that accompany this registration. These conditions are not optional — they form part of your legal obligation under the Act. Failing to comply can result in suspension or cancellation of your certificate, administrative penalties, or even criminal prosecution.
Below are three key conditions every dealership should regularly remind itself of:
- Trade Only During Approved Business Hours
Dealers are only permitted to trade during the business hours specified in their registration application. Conducting business outside of these hours — for example, completing a sale after hours or allowing vehicle collections beyond approved times — can be interpreted as illicit trading.
Dealerships should ensure that all transactions, collections, and administrative processes take place strictly within their authorised trading hours to remain compliant.
- Trade Only in Authorised Goods
Your dealership may only engage in the business activities specifically authorised in your registration certificate. If your registration was approved for selling used motor vehicles, you may not extend your operations to include other categories of second-hand goods unless you’ve obtained additional authorisation.
Staying within the bounds of your approved business activities protects your business from non-compliance and demonstrates adherence to the conditions of your licence.
- Observe the Seven-Day Holding Period
One of the most commonly overlooked requirements under the Act is the seven-day holding rule. Dealerships may not sell any used vehicle within seven days of acquiring it. During this period, the vehicle must remain in its original condition — meaning it cannot be modified, repainted, or altered in any way.
This rule exists to allow law enforcement sufficient time to trace stolen vehicles and ensure that second-hand goods entering the market are legitimate. Non-compliance with this condition can have serious legal consequences, including fines or loss of registration.
Staying on the Right Side of the Law
Compliance with the Second-Hand Goods Act goes beyond simply being registered — it’s about trading responsibly and transparently. Dealerships should review their current practices, ensure that trading hours and authorisations are up to date, and confirm that all staff involved in buying and selling vehicles understand these obligations.
By maintaining strict compliance, dealerships not only protect their operations from legal risk but also contribute to a safer, more trustworthy motor trade industry in South Africa.