Is cheap motor trade insurance worth the risk?

Motor trade businesses are sure to want to keep the cost of their insurance policy as low as possible, but there are certain risks involved with purchasing cover that seems too good to be true.

It’s not surprising that a motor trade business would want to save money on little things to make the most out of yearly profits, but cheap insurance, if purchased from an illegitimate source, can have severe consequences.

When surfing the web, you might come across offers for motor trade insurance on sites like Facebook and Gumtree. They might claim to have rock-bottom rates for a yearly policy, offering sufficient cover for you to continue trading.

These adverts and linked websites might have images and logos of other reputable insurers, suggesting the service they offer is genuine and backed by these particular companies.

However, don’t fall for the tricks so easily. In some cases, these so-called motor trade insurers will gladly take your money, only to provide no hint of cover in return.

Before you purchase from a suspect looking website, be sure to check their credentials on the Financial Services Register to discover if they are who they claim to be.

If you’ve dived in and bought ‘insurance’ from a less than reputable supplier, you might not realise you are without cover until it’s too late.

The first possibility is that you are pulled over by the police, as the vehicle you have driven has not been added to the Motor Insurance Database (MID). As a result, the number plate of a vehicle might be caught by an Automatic Number Plate Recognition (ANPR) camera, and you could be in line for a hefty fine, have your vehicle seized and even face further criminal charges.

In a more severe scenario, you or your employees might be the victim of an accident, incident or crime, on the road or in the workplace. When it comes to making a claim, you’d discover that the insurance policy you thought you’d purchased was in fact fraudulent, and you’d be forced to cover the associated costs out of your own pocket—which could be crippling for a business’ finances and reputation.

If you really want to find cheap motor trade insurance, there are ways you can do so with peace of mind that you won’t be the victim of fraud.

A trusted motor trade insurance broker, like ChoiceQuote, will use the details of your business—and your requested insurance needs—when contacting a number of established and trusted insurers to find a great deal on your next policy.

After scouring the market, they can offer a shortlist of deals that suit your business perfectly, and you can choose the offer you’d like to select. You might favour the cheapest on the list, or the policy with the most comprehensive cover.

While the rates on offer might exceed what you’ve seen from potentially illegal insurers, it’s unlikely you’ll find better legitimate cover anywhere else. When it comes to motor trade insurance, paying a little extra for a great policy is much better than paying less and receiving nothing in the long-term.

Of course, there are ways you can save even more money. Keeping an immaculate no-claims record will help you shed pounds on a policy, while only covering the essentials will ensure you aren’t paying too much for protection you don’t need.

It might be that cash flow is a particular concern, with motor trade insurance perhaps being a big outlay in one go—especially for smaller businesses. However, for a little extra you can spread the cost of payments. While the overall cost might be more expensive, the solution it offers to help you balance your business’ finances could be priceless.

If you want further advice on how to cut costs, be sure to ask your broker. They will give you expert, impartial advice on the best course of action for your particular circumstances.

Finding cheap motor trade insurance is possible and can be trouble-free when obtained through a reliable broker. However, you might have to broaden your definition of “cheap” and find a deal that is perfect for your business, and at a manageable price.

If looking for an unbelievably cheap policy from an unreliable source, you might be putting yourself and your business at risk.