Car Broker Insurance

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Designed for automobile traders selling new or used cars, car broker insurance is a type of motor trade insurance. It’s sometimes referred to as car dealership insurance and car trader insurance, but these terms typically refer to the same kind of insurance.

Businesses in the motor trade rely on car broker insurance to off-set some of the inherent risks they face in their industry. For most car traders, having the right level of insurance in place is absolutely vital. It provides protection against the unknown, enabling you to run your business with the confidence that even if something goes wrong, your business will have the financial support it needs.

Without the correct coverage, your business could face high costs to replace or repair stock or damage to your business premises. Your business may also be liable to meet expensive court fees and compensation pay-outs.

Finding the right insurance policies to cover these possibilities is essential, but it doesn’t need to be time-consuming. You can use Utility Saving Expert to find and compare the best value car broker insurance options.

Search through offers from trusted insurers and switch to a new insurance provider when you find the deal that best suits you. It’s quick and easy to use our online comparison service, which means it’s quick and easy to make smart choices for your business.

It costs you absolutely nothing to compare with and you will almost certainly save money for your business, making it a win-win trade-off for motor traders.

Car trader insurance needed by law

The majority of businesses working in the motor trade will have to take out insurance and some policies are legal obligations. For instance, if you employ staff, you need to have employers’ liability cover, by law.

Similarly, if you or your employees will be driving customers’ cars that do not belong to you or your business, you need to take out road risk cover.

Road risk insurance covers you to operate vehicles in your care on public roads, even if these do not belong to you. Just like with personal car insurance, there are different levels of coverage you can choose from:

  1. Third-party only insurance provides the bare minimum required by law. If there is an accident on the roads, this insurance covers the cost of damage to third-party property such as the other driver and their vehicle. However, the cover doesn’t extend to the vehicle you are driving, even if this is your customer’s vehicle and not your own. This leaves your business liable to pay to repair or replace the car you are operating if it’s involved in an accident whilst in your care.
  2. Third-party, fire and theft insurance is slightly more extensive than third-party only cover because it also insures against vehicles being stolen or damaged by fire.
  3. Comprehensive insurance offers the most bang for your buck because it also covers the cost to repair or replace the vehicle you are operating if it’s damaged in an accident, which means your business won’t need to pay out if it is a customer’s car. This level of insurance can cover the cars in your business’ custody and care, as well as the vehicles your business owns.

It’s illegal to drive your customers cars without insurance and you can be penalised if you are found doing so. In addition to an unlimited fine, anyone caught driving without insurance cover may have their driver’s license removed.

A driving ban is particularly bad news for professionals in the motor trade industry, so it’s best to stay cautiously within the law.

Employers’ liability insurance is another legal requirement for any business that employs staff, even casual workers. This protects your business financially because your insurance will pay out if a member of staff is injured at work and takes your business to court.

With this type of cover, your insurance firms will take care of very expensive compensation fees. Without it, your business will be expected to pay those itself, which could threaten bankruptcy for many dealerships.

If you are found without the correct cover in place, you risk getting fined £2,500 per day until you resolve the issue by taking out employers’ liability cover.

Other car trader insurance policies

Insurance features to consider for your car broker bundle include:

  • Demonstration cover: Insurance that permits your customers to test-drive the vehicles you are trading as a car broker.
  • Trade plate cover: Cover if a car from your dealership using your trade plates is stolen or in a crash.
  • Business premises cover: Repairs to your business premises such as your showroom or stock yard are covered by this insurance.
  • Business interruption cover: If you have to close unexpectedly because of an event like a fire or flood on your premises, business interruption cover helps you with the loss of income.
  • Public liability insurance: Covering legal fees and compensation if a member of the public is injured on your business premises, such as slipping and hurting themselves in your showroom.
  • Insuring equipment, tools and stock: Covering the cost of all of your stock, machinery and tools, meaning insurers will pay for these to be replaced if they are damaged or stolen.

Cost of car trader insurance

If you’ve tried to look up average costs for car trader insurance, the chances are you won’t have been able to find average figures anywhere.

As with most motor trade insurance, car broker cover is actually made up of a range of policies to create a bespoke insurance bundle. This includes a variety of features and add-ons that suit the business, rather than a single out-of-the-box policy for everyone.

It’s a benefit for car brokers that they can access a collection of well-considered and fine-tuned insurance policies, although this makes it difficult to find generic estimates for the cost of car trader insurance online.

However, there are some common factors that will affect the dealership insurance quotes your business is offered:

  • the size of your business,
  • the complexity of your business operations,
  • where your business premises are located,
  • how secure your business premises are,
  • whether you employ staff and how many staff you employ,
  • the features you choose to add to your insurance,
  • the level of cover you choose for road risk insurance,
  • how safe and experienced your named drivers are.

Cutting the cost of car dealership insurance

To run a successful business, whether that’s within the motor trade industry or not, you need to consider your bottom line. Much like insurance coverage, smart financial choices can be a lifeline for businesses when they least expect it.

You should think carefully about the level of traders’ car insurance that your business needs. It’s important that you feel your car broker business is sufficiently covered, but you also want to be paying a price that is economically realistic.

To help lower the cost of car broker insurance, you can:

Value precisely: Accuracy is critical if you want to find the best quotes for insuring your car dealership. If you overestimate your stock, or the value of your premises or equipment, you could end up paying more for insurance than you should.

However, if you undervalue the worth, you might get caught short. If an unexpected event happens that means you need to claim on your insurance, you might find the amount you are insured for doesn’t cover your needs.

What’s more, if your insurance provider thinks you have been dishonest, they might invalidate your insurance altogether, which could have disastrous consequences.

Be as transparent as possible and give precise valuations to ensure your business has the best chance of good rates on your motor trade insurance.

Improve security measures: The safety and security of your business premises is important. If you leave your business vulnerable to the possibility of theft or vandalism, your dealership will appear to be a greater risk to insurers.

This means insurance firms will expect that your business has more chance of making a claim and they will protect themselves by increasing their quotes.

You’re likely to be given lower quotes if you make your business premises safer, for example by installing additional security features such as alarm systems and CCTV cameras to deter criminal activity.

Not only does this give you the practical benefit of less risk of a break-in, it also encourages insurance firms to offer you better deals.

Choose mature drivers: Most insurance provides will quote you above the odds for named drivers who are under 25, and some won’t insure young drivers whatsoever.

Statistics show that younger drivers who are not experienced behind the wheel are more likely to be involved in accidents, and your insurance provider will be well aware of this.

The best thing you can do is choose named drivers who are safe, experienced, over 25 years old and have clean driving licenses. By doing this, you show insurers that your drivers will be unlikely to cause an accident and your dealership would be unlikely to claim on insurance. In return, they’ll offer you better quotes.

Settle your insurance up-front: Paying for your premium in one lump sum is helpful for insurance providers because it reduces administrative load and removes the possibility that you might miss your payments.

This cuts the costs for your insurance firm, so they’ll reward you by offering a cheaper deal overall. As long as a single, annual payment is affordable, this makes good financial sense for your business.

Compare quotes: The best way to secure the cheapest car broker insurance deals is to compare prices and switch to another insurance policy using Utility Saving Expert.