What is motor trade insurance?
Motor trade insurance covers anybody working in the motor trade, including part-time mechanics, car dealerships, service and repair garages, body shops, MOT stations and classic car restoration.
Traders' insurance is designed for businesses where staff drive or work with cars that are left in their care, custody and control. Once the keys to a vehicle are handed over to a motor trader, it is no longer covered by the owners’ private insurance. There are multiple types of motor trade policies designed to cover the different types of motor trade activity.
Who needs motor trade insurance?
If you work in the motor trade industry, you need appropriate insurance.
This includes people who drive clients’ cars for road tests, through to those who buy and sell vehicles at auction and need cover to drive these vehicles on the road.
The types of businesses that require motor traders’ insurance include:
- Service and repair garages
- MOT stations and garages
- Body shops
- Mobile Mechanics
- Breakdown & Recovery Operators
- Vehicle Collection & Delivery
- Many other businesses in the motor trade
You will need to be a genuine motor trader to take out a policy. Therefore, don’t be surprised if you are asked to prove that you operate a motor trade business and are asked for evidence of your trading history. Don’t worry, this is standard practice and helps to keep premiums as cheap as possible for genuine traders.
What does motor trade insurance cover?
Traders’ insurance typically covers:
- The named driver on the policy against losses relating to work in the motor trade
- Road risks cover for incidents on highways and any third-party damage to public property
Remember, if you drive your own vehicle or other people’s vehicles as part of your business activity, the law requires you to have traders’ insurance.
The minimum level of cover available is road risks insurance. This policy protects you against risks while driving vehicles on the road. These can be vehicles in your possession, with a view to buying or selling them, or customer vehicles entrusted to you. There are three categories of road risk tiers: third-party, third-party fire and theft or comprehensive basis.
Motor trade combined insurance includes road risks insurance with a range of additional covers. These can protect your business premises (e.g. a garage or showroom), as well as cover for vehicles stored on those premises, tools and equipment stored on-site, and more.
Additional options include:
- Buildings cover (whether you own or rent premises)
- Employers’ liability
- Public liability
- Product liability
- Material and equipment damage
- Money cover
- Tools cover
- Additional drivers
- Demonstration cover
How much does a trade insurance policy cost?
Like any car policy, the cost of motor trade insurance depends on several factors, including:
- The level of cover
- No-claims history
- Voluntary excess
- Risks you need to protect against
Using ChoiceQuote means comparing insurance quotes from a panel of the most experienced insurers. Whether you want a full traders’ combined policy or the cheapest possible road risks premium, we can find you the best value policies.
How to get cheap trade insurance
We understand it can be tempting to choose the cheapest quote available, but you also need to be confident that it will cover your risks if you do need to claim.
There are several ways you can reduce the cost of your insurance, including:
- Speak to an independent broker specialising in motor trade insurance. Not all brokers are the same so choose wisely and do your research. Speak to others in the trade.
- Only buy the cover you need.
- Build up your motor trade no-claims bonus over time and maintain it by keeping claims to an absolute minimum.
- Consider a higher voluntary excess – but you’ll have to pay the additional excess if you need to make a claim.
- Often insurers will offer discounts for enhanced security measures. Alarms, CCTV and garaging stock are good examples.
- Employ drivers with good driving history. Beware that younger (those under 25) and those with convictions (driving or criminal) may drive your premium up. Buying any driver cover can be an expensive upgrade.
- Be upfront with your broker about your renewal terms and price.
- Don’t include too many brokers in your search.
- The premises you operate from – unusual construction, shared premises or those in high crime areas can add pounds to your premium.
- Avoid dealing in or buying modified or high-performance vehicles.
- Keep vehicle numbers registered on the MID to a minimum at any one time. You should still add all vehicles to the MID that are covered on your policy.
- Paying your premium upfront means you don’t pay interest to finance companies, but it can help with your cash flow by paying monthly.
How do I get trade car insurance?
Many insurers and brokers will promise online quotes and the cheapest ever insurance prices. However, it is not always possible to compare trade insurance online due to the complexity of the policies.
You will need to set some time aside to find out which traders policy works best for you. You will get the best outcome over the phone and it will only take around 30–45 minutes to go through the questions.
This conversation with our team gives you the chance to discuss your motor business needs and requirements. Our team will collate all the information and get quotes from multiple insurance providers. We do the legwork for you and will recommend the best motor trade policy.
You can start the quote process here on the ChoiceQuote website or calling us on 01625 854832.
A good insurance broker working on your behalf can save you money. They can compare the covers and give you advice on which covers suit you best.
Frequently asked questions
Road risk vs combined motor trade insurance – what’s the difference?Road risks insurance is the minimum legal requirement for motor traders and is suited to smaller traders, mostly operating from home. This could protect you against losses arising from incidents on the public roads, such as collisions with other vehicles. Motor trade combined insurance protects you against road risks and includes cover for your business premises (rented or owned), damage to bodywork or theft of a vehicle, and theft of tools or money from your property.
Can I cover my home address with motor trade insurance?Road risks insurance cover is available for individuals who work from a home address. If your business is based at a residential property, call ChoiceQuote. We can help you to understand if this is likely to affect your policy and the premium you pay.
Can I transfer my no-claims discount?If you have a proven claim-free record on a previous motor trade insurance policy, you may qualify for a no-claims discount of up to 60%. You can either transfer your existing no-claims bonus or opt for a mirrored discount - even if your previous driving history was on an employer's motor trade policy and not in your name. And if you haven’t worked in the trade before, you can opt to transfer or mirror the no-claims discount from your private car/vehicle policy. Speak to us for details on how we can save you money.
What if I work part-time in the motor trade?Part-time motor trade professionals can still get appropriate insurance cover. We can help you to find the right motor trade policy, whether you're full-time, part-time, still in training, work from home or on a mobile basis. Please don't hesitate to get in touch for more information, whatever your circumstances may be.
Can I add a named driver to my traders’ insurance policy?Yes, you can. However, the more named drivers you list on a motor trade insurance policy, the higher your premium will be. Try to restrict driving privileges to as few individuals as possible if you want to get the best value motor trade insurance.
Can I use motor trade insurance as a personal policy?Motor trade insurance cover is designed for people who work in the trade and need to drive customers' cars, e.g. for road testing or recovery purposes. It should not be used as a personal 'any car' insurance policy. If you need insurance to drive any car but you are not in the motor trade, we may still be able to find you the best cover.
What’s the excess on motor trade insurance?The typical compulsory excess on a motor trade road risks policy is around £250. You can reduce your premium by paying a voluntary excess on motor trade insurance claims. Just make sure to calculate the best balance between upfront cost and voluntary excess, so you can cover any fees during a subsequent claim.
Can I get motor trade insurance for under 25s?If you're new to the motor trade or to driving in general, insurance premiums may be higher to reflect your lack of experience. However, we may still be able to help you in particular trades, especially in service and repair.You can save money by working for somebody else in the trade first, building up experience, before striking out on your own.Speak to us to find out more about motor trade insurance for young traders.
What is covered with a dealership policy?Dealership insurance policies cover vehicle stock you have on-premises against damage or theft. Your buildings, employees and members of the public visiting your site are also covered. This is combined with road risks insurance for vehicles in transit, used during test drives, and collection and deliveries. Combined motor trade insurance can give you all of this in a single policy, offering you the best value motor trade cover for your needs.