If you’re a young motor trader, it’s essential that you have the right insurance before servicing or selling a vehicle.
However, cheap motor trade insurance for young traders is not easy to come by. Like your private motor insurance, it’s more expensive to insure a motor trade business as a young person. Some insurers don’t even offer traders’ insurance for those under 25 at all.
This guide looks at:
- How to get motor trade insurance for under 25s
- Why it is more expensive for young traders’ insurance
- How to reduce the cost of motor trade insurance for under 25s
Can I get a young motor trader policy?
Young motor traders will often find it difficult to get insurance. There are different age brackets where insurance for young motor traders generally becomes available:
- If you’re 21 or younger, motor trade insurance is not generally available.
- If you’re 21-23 years old, you can sometimes be accepted for motor trade insurance if you work in servicing or repairing vehicles. You will not be able to get a policy to buy and sell vehicles in the trade.
- If you’re over the age of 23, you can be considered for a traders’ policy if you buy and sell vehicles, or work in service and repair – but only a limited range of insurers will cover you.
We generally recommend that young motor traders gain experience working in a garage or sales role before setting up their own business. Motor trade policies for under 25s can be costly, so it makes sense to learn on the job with an experienced trader first if possible.
Why is motor trade insurance for under 25s expensive?
Statistically, younger drivers are more likely to be involved in accidents on the road. That’s why motor trade insurance is often more expensive for young and inexperienced drivers, especially those under 25.
On a motor trade insurance policy, you have responsibility for customer vehicles when left in your custody. You’ll also be driving vehicles you want to sell. This involves more risk than driving your own car for social, domestic and pleasure purposes.
Working in the motor trade means typically spending more time on the road than you would be driving a personal vehicle. Also, a lack of experience makes moving from one vehicle to another challenging. Indeed, you could be handling vehicles of various types, engine sizes and transmission.
On top of this, you cannot move telematics boxes from one vehicle in the trade to another, for example. So, a way of reducing risk and saving money like this isn’t available for a young motor trader policy.
5 tips to reduce the cost of motor trade insurance for under 25s
All is not lost if you’re looking for young traders’ insurance. While your choice of insurers is limited and the costs are generally higher, there are some things you can do to improve your chances of getting a traders’ policy:
- Work for somebody else first.
If you want to be your own boss, having a part-time job buying and selling cars might seem like a good idea. But if you’re serious about becoming a trader, start by gaining experience working for somebody else. Learn from people already in the service and repair trade, or start work in a dealership if you’re interested in selling cars. You won’t have to pay for motor trade insurance yourself, and you’ll also be learning valuable skills.
- Start work in less risky trades.
It’s cheaper to get young motor traders’ insurance as a mechanic working in service and repair than it is in other “riskier” motor areas, for example, buying and selling cars. That’s because buying and selling cars involves being on the road more often. Limit the amount of time you spend behind the wheel by working in garages repairing vehicles to gain experience.
- Transfer no claims bonus (NCB) – otherwise known as no claims discount (NCD) – to your motor trade policy.
If you build up no claims on your private motor insurance, it proves you are less of a risk to insurers as you have started to gain experience. You can then look to transfer this to your motor trade policy. This is a good way of reducing your premium when beginning in the trade.
- Stick to selling simple, family cars.
If you want to sell vehicles, stick to those with lower-powered engines, and less expensive models. If you sell cheaper, popular models, you are more likely to get young traders’ insurance.
- Keep a clean driving licence.
Pass your driving test and start to gain experience driving your vehicle first. Avoid picking up points on your licence and getting involved in accidents. This way, when you first get a quote for motor trade insurance, you’ll be in a better position.
ChoiceQuote offers access to policies for younger motor traders. Please bear in mind, though, that trade insurance for under 25s is not cheap. Follow our advice to give yourself the best chance of getting a policy.