Many people across the UK buy and sell cars throughout the year either as a hobby or an extra source of income. The question is, at what point are you classed as a motor trader and therefore require appropriate cover?
It’s a tricky situation, but it often depends on one major factor: How much business do you do over the course of a year?
If you only sell a couple of cars here and there, for example a maximum of five over a 12 month period, it’s unlikely that you will need motor trade insurance. The main criterion for purchasing cover is if you trade regularly.
It’s better to be safe than sorry in this situation. As well as there being a duty for you to obtain cover when it is necessary—making sure you and your customers are properly protected in the event of an accident or incident and you don’t come into trouble with the law—the other side of the matter is you might pay for motor trade insurance, which is often more expensive than a normal car insurance policy, when you simply don’t need it.
Contacting a motor trade insurance broker can help you make the distinction. By explaining the details of your small business, they can determine whether or not a motor trade insurance policy is right for your circumstances. If so, they will search the market to find the cover that is perfect for you and available at the right price. If you don’t need cover, a broker won’t pressure you into a purchase.
It’s a similar situation for part-time mechanics. If you only repair a couple of cars a year, it’s unlikely that you’ll need motor trade insurance. The key here is to keep receipts, booking logs and any other information associated with conducting a transaction. You can use this information when speaking to a motor trade insurance broker, and they’ll advise you on what to do next.