Driver's licence change in Aussie state closes demerit point 'loophole'

The changes come as transport authorities crack down on road safety.

Motorists driving on foreign licences in one state will have just months to convert to an Australian one as new rules come into effect aimed at closing a "loophole" in the law that allowed overseas-licensed drivers to accrue dozens of demerit points and remain on the road.

In NSW, new rules introduced on March 1 will mean foreign nationals still driving on their licence from their home country will have just months to make the switch, depending on your visa status, as authorities crack down on road safety.

New rules to stop foreign driver loophole

Drivers who have been in the state since before July 1, 2023, will have exactly 12 months to move onto a NSW licence. This includes those who may have been driving on their international licence for years before the rule change.

A NSW digital licence.
NSW will force foreign drivers to switch to Australian licences to close a legal loophole. Source: AAP.

Foreign nationals entering NSW, that are permanent residents, will have just three months from their arrival date to make the switch. Foreign nationals that are just visiting, on temporary visas, will have a total of six months to switch to a NSW licence.

Change made to make NSW roads safer

According to Transport for NSW (TfNSW), the former approach allowed thousands of people to choose to stick with a foreign licence, some of who "have racked up more than 35 demerit points without being banned from the road" by remaining outside the system, that applies to the nearly seven million other drivers in the state.

TfNSW said in the five-year period between 2018-2022 there were 23 fatal crashes and 468 serious injury crashes involving a driver or rider on an overseas licence, and in 2024, a further five fatal crashes involved drivers or riders not on a NSW licence.

The dodgy demerit trade advertised on Facebook Marketplace
The new crackdown will likely put an end to dodgy demerit point trade on Facebook Marketplace, where foreign nationals take on Aussie drivers' points for a fee. Source: Facebook

"The changes we announce today are squarely aimed at the safety of all seven million drivers on our roads. This will improve the overall standard of driving in NSW and therefore safety at a time when this is absolutely critical for all of us to keep at top of mind," NSW Minister for Roads John Graham said on Friday.

"The former government talked tough in this area but what they left behind was a work-lite, safety left in the backseat compromise that squibbed the challenge in this space.

“This regulation change means no one will be able to drive around for years and years on end without coming under the NSW licence system. The government is not going to cop people running up demerit points with impunity."

New rules to combat dodgy demerit point trade online

The new rule changes will also address the selling of demerit points on social media, most commonly on Facebook Marketplace, where foreign drivers would cop Australian drivers' points for a fee, as they did not face a limit on how many they could accrue without being banned from the road.

Under the deal, the seller steps forward to take on the person’s penalty for offences such as speeding and using a mobile phone while at the wheel in exchange for big bucks.

A text message exchange of someone hoping to be paid to take on demerit points.
A text exchange showing demerit points offloaded for cash. Source: Supplied

It’s just the tip of the iceberg with an entire black market operating online in the exchange of demerit points for cash. On Marketplace, there are dozens of posts in Sydney alone where cash is offered to take on demerit points.

Last year, Yahoo News Australia contacted a seller under the guise of someone looking to offload points, with one man explaining how he does it.

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