Small Business Minister Andrea Michaels said today that Consumer and Business Services (CBS) had found licensed dealers operating under the guise of private sellers to avoid warranty or repair laws.

The consumer watchdog checked nearly 170 licensed used car dealers operating from home and car yards and also found some were winding back odometers or faking logbooks to boost profits.

Michaels said six people have been convicted of tampering with odometers – with fines and compensation totalling more than $35,000. Of those prosecuted, four were unlicensed. Two were licensed dealers caught winding back odometers.

She also warned that over the coming year inspectors will continue to target licensed dealers operating from home and harsher penalties for dodgy car dealers are now being considered.

Motor Trade Association SA and NT chief executive officer Darrell Jacobs said tougher investigations are a “great first step” but new vehicle inspection laws must be introduced to protect buyers in the two in three sales where vehicles are not purchased from dealers.

“South Australia is the only mainland state without some type of vehicle inspection scheme,” he said, adding that discussions about introducing a compulsory inspection are continuing with the State Government.

There were 150,000 used cars sold in SA during the past 12 months and the CBS found a significant number of unlicensed dealers selling from home via sites like Facebook Marketplace.

Jacobs said some dodgy car dealers were off-loading cars like those damaged in Queensland floods in SA as it was easier getting around inspection rules.

Second-hand vehicle dealers in SA must have a licence binding them to strict warranty and disclosure rules if they buy, sell or offer for sale four or more vehicles in 12 months.

But private deals have no coverage. Jacobs says a compulsory inspection costing between $100 and $150 should be introduced for second-hand car sales.

He said his own daughter bought a car with a faulty airbag that was fixed just before she had an accident, while his son looked at one car which a mechanic said needed at least $6000 work to fix damage from an accident the seller had not revealed.

“Dodgy private sellers are preying on those who can least afford it,” Jacobs said.

“The strong message is to go to a licensed dealership where motorists legally have consumer protections and warranties.”

Licensed dealer Arta Hanssen was convicted and fined $1,800 in May for winding back the odometer on two cars, with compensation awarded totalling $5,372.

In the same month, licensed dealer Salameh Hadadd was convicted and fined $450 with compensation awarded of $4,400 for winding back the odometer on two cars.

During March, Ravindra Mudalige was fined $3,000 with compensation awarded of $2,400 for winding back the odometer on two cars and falsifying one logbook.

Last year, three other people were convicted and fined for winding back odometers.