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Car dealerships need insurance policies in place to protect against the possibility of an accident or incident resulting in financial losses. Insurance gives dealerships sufficient support to handle risks ranging from fire, flood and damage, to theft, vandalism and liability claims.
Car dealer cover is a specific type of motor trade insurance for anyone who owns or runs a new car showroom, second-hand car dealership or a similar vehicle sales business.
These can range from large dealerships that employ many staff members and have a substantial amount of stock including high-priced vehicles, to part-time traders, self-employed solo car dealers or hobbyists who spend their spare time fixing up and selling used cars.
Every car dealer needs insurance cover, but the amount you take out will depend on how large, complex, and high-risk your business is and reflect your business activities and appetite for risk.
Insurance policies created for car dealerships can help your business to stay afloat in the face of a crisis. This is because insurance helps protect from financial losses if you are brought to court or a claim is made against you.
You can take out cover for your stock and business premises, ensuring that unexpected events like fire, floods, or vandalism won't ruin your business, handing you a lifeline when things go wrong.
Just like any other motor trade insurance package, with dealership insurance, you can add a variety of insurance features together into a bundle that reflects the needs of your car dealer business.
This allows you to create a bespoke policy that includes all the protection that your business requires, instead of a blanket policy that may overcharge you for cover you don't need.
After all, every business is different, and as such, your business will face its own, unique risks. Your policy should be curated to reflect this.
Motor trade insurance features that are relevant to car dealerships are:
Most insurance features are optional, but some cover is mandatory.
There is a minimum level of cover that motor trade businesses usually need to meet for two types of insurance:
Whilst other types of insurance features are optional in the eyes of the law, they might be essential for your business.
The value of what you want to insure is an important factor. You will be required to work out realistic estimates for the value of your property and stock, then share this data with your provider to agree the sum insured. This creates the upper limit of how much money your insurance will pay out if your business makes a successful claim.
It's very important to provide accurate numbers when you are working out the sum insured. If you underinsure your car sales business, you risk having your policy invalidated or being left with a financial shortfall if damages to your stock or property are far higher than the amount of money you can claim.
Given the nature of building a policy with the features your business needs, the cost of auto dealer insurance can range greatly.
The more you add to your policy, the higher price you'll pay for your insurance bill. However, with extensive coverage, you'll be required to pay less to support your business if problems later arise that are covered by your insurance.
Finding the balance between being overly cautious and underprepared can be tricky. Consider your appetite for risk and think realistically about whether your business would survive if an unexpected event occurred and caused damages to stock or property, or injury to an employee or customer, and you did not have the financial support from an insurance payout.
Your insurance providers will usually consider the following factors when offering you quotes:
Your top priority should be to make sure the insurance you take out will cover your business adequately for the risks it faces. However, as with any business, you also need to consider the financial implications carefully.
Ask yourself, what insurance coverage does your business require? On the other hand, what constitutes unnecessary spending? What risks would you be willing to take? What compensation could your business afford to pay if you didn't have insurance cover for it? In contrast, what sort of figure would you be willing to put down for extra peace of mind?
These are all important considerations and the conclusions will apply uniquely to your circumstances. However, there are also some general ways to encourage cheaper rates on your insurance quotes.
You can lower the cost of insurance by:
The best way to reduce the cost of your car dealership insurance is to compare deals before you choose a new policy.
Use Utility Saving Expert to find the most competitive rates from trusted insurance firms and select the dealer policy that provides the best value for money.