Starting up a new business isn’t always an easy process. In the motor trade industry, this is no different.
In addition to deciding on a location, what services you will offer, whether or not you should employ extra staff and figuring out all the other finer details in order to be prepared for business, you also need to obtain top quality motor trade insurance.
However, if you are starting a new business and you are under the age of 25, the latter part is especially complicated. Unfortunately, it could be a struggle to obtain motor trade insurance.
Many motor trade insurers are not as willing to offer cover to this particular age group, due to the perceived risks associated with younger people.
This is why it is often a long process to find a company that will give you that all-important first policy.
You have to weigh up the costs against the benefits of starting a motor trade business when under the age of 25. If you do manage to obtain motor trade insurance, it could be at a much higher cost than you are willing to pay.
Sometimes, it’s better to bite the bullet and accept the larger initial outgoing. It might mean your profit margins are damaged during the first year of trading, but at least you have one foot in the industry.
If it seems like a big sum to pay out at one time, which it often can be if you are a start-up business, you could look to spread the cost of insurance over the year to help balance your spending. It may increase the price of your policy slightly, but it offers more flexibility.
Remaining claim free for the first year could mean the cost of renewing a policy might be lower in the future. The price might continue to drop in the following years if you steer clear of accidents and workplace incidents.
Alternatively, you could take a slightly different approach to your future business activity. For example, you may decide to gain some valuable experience by working for an established motor trader before starting your own company.
Not only will this provide you with some useful tips and tricks of the trade, it also means that motor trade insurers might be more willing to offer you cover if you’ve learned your skills from someone who has a spotless no claims history. Your employer might even offer a credible reference when you eventually decide to go into business for yourself.
Or, perhaps, you could downscale the initial grand plan for your business. Instead of starting out as a vehicle trader, you could begin your working life as a mechanic, meaning you won’t have to drive cars for any reason that requires cover greater than road risks insurance. This might reduce the cost of the insurance policy you’d need to obtain in order to trade.
If you can avoid getting behind the wheel, this could also help with cutting the price of cover.
If you are still unsure about the possibility of starting a motor trade business when you are under 25 and paying huge amounts for insurance, you could always ask for some impartial advice from a broker.
In addition to helping you understand the best option you should take, if you eventually decide you want to go into business the broker will help to find a policy that suits your needs.
Using their years of experience, a broker will know which companies are more open to offering motor trade insurance to under 25s and can get you a quote quickly and easily if you are eligible for their insurance schemes. They might even be able to negotiate a better price for the cover.