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motor trade insurance Ultimate Guide to Motor Trade Insurance

If you work in the motor trade, you need to know about motor trade insurance. It’s a big and complex subject and you need to know your way around it if you’re going to get the best trade insurance quote for your business. This guide is here to help.

    If you need to compare motor trade insurance quotes for your business, check out the insurance comparison tool on our site. It will give access to a number of quotes for your business from a range of vehicle trade insurance brokers. It’s the quick and easy way to get a great deal for your business.

    What is motor trade insurance?

    Let’s start with the basics.

    Most people simply want to know what motor trade insurance is and how it works.

    Traders insurance is needed by any business working in the motor trade industry. At its most basic level it gives your business and your employees the cover you need for your own vehicles or your customers’ vehicles (when the vehicles are in your care) to be road-legal.

    Beyond that, each trader’s policy is tailored to your business’s requirements so you can get precisely the level of cover you need. For example, if your business is in motor sales you can get cover for the vehicles you sell. If your business involves what is known as the ‘care, custody and control’ of your customers’ vehicles (you are a mechanic, for example), the motor trade insurance policy protects your business and your employees while the vehicle is with you. You can also get cover for the premises you work from and any stock you carry.

    Who needs motor trade insurance?

    It is very easy to say that you need insurance if you work in the motor trade. Let’s start to break this down and look at it in a little bit more detail.

    Essentially, you can divide the motor trade into two parts (note that these two parts sometimes overlap). The size of your business does not matter – you still need motor trade insurance if you work in the motor trade part time. Neither do you need to have premises to have a motor trade insurance policy – you still need insurance even if you run your business from home or go to customers’ homes or places of work to carry out the work you do.

    The first type of business that needs motor trade insurance is ones that buy, sell or hire vehicles, such as car showrooms, car traders, auction houses, vehicle importers, classic car specialists, scrap and salvage merchants, vehicle repossession businesses and car hire companies.

    You will need motor trade insurance at its most basic level if you buy, sell or hire vehicles, it will need to cover the vehicles you are buying and selling and give you and your employees cover when you drive them. We will look in detail in the next section of this motor trade guide at the type of cover you should be thinking of if you buy, sell or hire vehicles.

    The second type of business that needs trade insurance are those that have their customers’ vehicles under what’s called their, ‘care, custody and control’. This refers to situations when a customer leaves their vehicle with you or when you work on your customers’ vehicle. When a customer leaves their vehicle with you it is no longer protected by their insurance, so you need to have your own motor traders insurance to cover it instead. As well as protecting the customers’ vehicle, it also covers anyone working on the vehicle or driving it.

    Examples of businesses who have customers’ vehicles under their care, custody and control and need cover include repair centres, MOT centres, mechanics, mobile repairers such as exhaust, tyre and windscreen fitters, vehicle delivery companies and companies that park customers’ vehicles on their behalf.

    You can compare insurance quotes with UtilitySavingExpert.Com by using the motor trade quotation tool on our website.

    motor trade form trim

    Additional Information
    green tick motor insurance database MIB Guide

    Useful Industry Links
    pink tick retail motor fed www.rmif.co.uk
    pink tick body repair fed www.nbra.org.uk
    pink tick insurance database www.mib.org.uk


    What types of trader’s policy are there?

    When it comes to the types of motor trade insurance out there, understanding what this insurance covers and getting an idea of how it works, the best way to explain it is to divide it into two parts.

    The first part is motor trade road risk insurance – the cover you need if you are going to take your vehicles or your customers’ vehicle on the road.

    The second part is motor trade liability insurance – the cover you need to protect your vehicles, the vehicles in your care, your trade premises and your employees.

    You can also choose to take out a combined insurance policy – this combines road risk insurance and liability insurance and provides additional cover too.

    Road Risk Trader Insurance

    Road risk motor trade insurance covers your vehicles and your customers’ vehicles when they are on the road under your care. It provides the cover you need in the event of an incident or accident.

    If you do not take your customers’ vehicles on the road, you can consider taking out parts only cover. This is a very basic form of trader’s insurance and you would not legally be covered if you take your customers’ vehicles out on the road.

    Like ‘standard’ car insurance, there are three options when it comes to road risk traders insurance, if you take vehicles onto the road as part of your business:

    • third party only
    • third party fire and theft
    • comprehensive

    Let’s look at each of them in a bit more detail.

    Third Party Only Insurance

    Third party only is the most basic level of motor trade insurance that legally allows you to take your vehicles and your customers’ vehicles out on the road.

    It is typically the cheapest level of motor trade insurance cover you can get if as a trader you take your vehicles or your customers; vehicles out on the road.

    It is the minimum level of cover you need if you:

    • pink tick vehicle repairsrepair, service or restore vehicles
    • pink tick tyre fittersare a vehicle fitter, mobile tuner or valeter
    • pink tick mot garagerun an MOT centre or garage
    • pink tick car tradersell and buy vehicles for profit
    • pink tick servicing carsdrive your own vehicle or customers’ vehicles on the public roadway
    • pink tick fixing customers carshave any of your vehicles or your customers’ vehicles on your business premises or at your customers’ or your home addresses.

    With third party cover, your motor trade insurance covers any driver named on your policy to drive any trade vehicles in relation to your business. In the event of an accident or incident that is your driver’s fault, you are covered for damage to the other party’s vehicle and injury to the other party. It does not cover damage to the vehicle your driver was driving or for injury to your driver. Neither does it cover your vehicles or your customers’ vehicles if they are damaged, involved in a fire, lost or stolen.

    Third party fire and theft for Motor Traders

    Third party fire and theft cover is typically the mid-priced option when it comes to trade insurance.

    This type of motor trade insurance cover gives you third party protection. It also gives you cover if your trade vehicles or your customers’ vehicles are damaged, involved in a fire, lost or stolen.

    Comprehensive Motor Trade Insurance

    Comprehensive is typically the most expensive type of trade insurance policy. It provides all the cover that third party fire and theft gives you. It also covers:

    • pink tick what comprehensive coversyour trade vehicles or your customers’ vehicles if they are involved in an incident or accident that is your driver’s fault
    • pink tick comprehensive insuranceinjuries to your driver if they involved in an incident or accident that is their fault.

    Motor Trade Liability Insurance

    Motor trade liability insurance protects your business against liabilities it may face.

    There are three options to consider when it comes to motor trader liability insurance:

    1. public liability insurance
    2. employer’s liability insurance
    3. product liability insurance
    4. Covering you to defend any claims made against you
    5. Optional cover to include portable hand tools

    Let’s look at each of them in a bit more detail so you can understand what they mean in relation to motor trade insurance.

    Public Liability Insurance

    If you have premises that your customers visit, as a motor trader you should consider public liability insurance. This type of insurance covers you if one of your customers is injured in an accident or incident while they are on your premises.

    It can also cover you if one of your customers has an accident or incident that was caused by defective workmanship by you or one of your employees on a vehicle belonging to one of your customers.

    Employer’s liability insurance

    If you have one or more employees then employer’s liability is a legal requirement as a motor trader. It covers you and your business if one of your employees is injured or dies whilst at work.

    Product liability insurance

    Product liability as part of your motor trade insurance gives you cover if a part you fit to a customer’s vehicle turns out to be defective and causes an accident or incident as a result. It allows your insurer to sue the manufacturer of the defective part.

    Combined motortrade insurance policies

    Combined motor trade insurance combines road risk insurance and liability insurances. It also provides cover for things such as your premises, your tools and your business. It is the most comprehensive type of trader insurance policy you can get and provides cover for almost every aspect of your motor trade business under one policy.

    Other types of vehicle cover for Motor Traders

    As with all business insurance policies there are lots of optional extras you can add to your motortrade insurance cover.

    These include motor trade legal expenses cover if you decide to take a claim against you to court. You can also add breakdown cover to cover your trade vehicles and your customers’ vehicles.

    It is also useful to know that you can get part-time car trader insurance policies. These can be useful if you only work part time in the motor trade and only want cover when you do.

    How to get the best motor traders policy:

    The first step to getting a motor trade insurance policy is to check you are eligible for it, these are the criteria you must meet.

    • pink tick driving licenseYou must hold a full UK driver’s licence.
    • pink tick motor trade proofYou must have proof that you work in the motor trade – you usually need to provide this in the form of receipts for activities you have carried out in your business such as trade vehicles you have bought or sold or vehicles you have worked on.

    Once you know you are eligible, the next step is to get quotes for your insurance. It’s vital to shop around to make sure you are getting the right level of trade insurance cover, at the right price. You should do this every time you renew your insurance to make sure you are getting the best deal too.

    The easiest way to compare motor trade insurance quotes for your business is to use the insurance comparison tool on our website. You simply choose the elements you want to include in your insurance and then you will get quotes for a range of motor trade insurers.

    How much does car trade insurance cost?

    Because car trade insurance policies are so varied, quoting figures is meaningless because the cover your business needs will be very different from the cover someone else’s business needs. However, it is useful to look at the factors that affect the price of trade insurance premiums so you can start to understand how this insurance is calculated.



    Vehicle types will affect your motor trade insurance premiums

    If you sell or work on high performance vehicles or classic vehicles, you can expect to pay a premium on your insurance.

    Driver age will affect the cost of your premium

    It is generally accepted that the younger you are, the more likely you are to be involved in an accident or incident. Insurers may therefore exclude drivers under 25 from your trade insurance policy or charge a higher premium to include them. The same applies to drivers with points on their licence. It is possible to get trade insurance if you or your drivers have motoring convictions or points on your licence, but you are likely to have to pay a higher premium for it.

    Your location will affect the premium you pay

    Inner city businesses are likely to face a higher premium for their insurance than businesses in a rural location. This is because inner city businesses are seen as a bigger risk. In addition, remember the security of your premises. Buildings with better levels of security are likely to enjoy better motor trade insurance premiums.

    How can I get a cheaper motortrade insurance policy?

    One of the questions we are most often asked is how can you get a cheaper trade insurance quote. In this section of our guide we will look at the things you can do to reduce your premiums.

    The most important thing to do is compare each motor trade insurance policy you are considering for your business. You can contact each insurer individually, but this will take time you probably don’t have. The best thing to do is use the quotation tool on our website. You enter details of your business and the cover you need and at the click of a button you’ll get quotes from a range of motor trade insurers who are willing to insure your business. It’s quick, simple and convenient.

    Once you know you’re only paying for cover once, and you’re confident you’re going to get a great deal by using the vehicle trade insurance comparison tool, there are other things you can do to get cheaper insurance for your business.


    Only get the trader insurance cover you need

    One of the best ways to save money on your motor trade insurance cover is not to pay for cover that you have already got under other insurance policies you have taken out for your business.

    For example, if you already have a separate employer’s liability insurance policy, you may not need to have this included in your motor trade insurance policy, although you should always check that you have got all the cover you need in your traders insurance policies.

    As well as making sure you’re not paying for cover you don’t need, you should also avoid any added extras. For example, you may not want legal expenses cover, so make sure this isn’t included in the policy. If you only work on cars, don’t pay for cover to work on lorries or trucks. If you don’t work on classic cars, don’t pay for insurance that includes classic cars in the cover.

    Agreeing to a higher voluntary excess

    Just as in other insurance policies, car trade insurance policies have excesses. This is the amount you will pay towards the cost of any claim. Generally speaking, the higher the excess you are willing to pay the cheaper your motor trade insurance is likely to be.

    By investing in the security of your premises

    If your car trader insurance is going to cover your premises, think about the security measures you have in place. The better the security, the lower the risk that your premises will be broken into. This is reflected in the motor trade insurance premiums you are likely to have to pay.

    By hiring employees who are better, safer drivers

    When you can show you have policies in place that encourage better and safer driving from your employees, this is likely to give you lower motor trade insurance premiums. For example, you could consider employing drivers with more experience (drivers under 25 are always seen as high risk and this is reflected in the premiums you pay). Similarly, drivers with clean driving licences are seen as lower risk. You could make your drivers responsible for paying the excess on any accident or incident that is their fault to encourage them to be more responsible.

    By paying your premium annually rather than monthly

    It is generally cheaper to pay for your motor trade insurance in a single lump sum at the start of the policy than it is to pay in monthly instalments.

    Motor Traders Insurance

    – the next steps

    Now you have got the lowdown on motor trade insurance, it’s time to get the policy that’s right for you. The insurance tool lets you compare a range of motor trader policies on the market that your business may be eligible for.