Motor Trade Insurance
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Manually collecting motor trade insurance quotes can be time-consuming. And with countless insurance brokers to choose from, finding the right insurer can be tricky.
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How Does A Motor Trade Insurance Policy Work?
Motor trade insurance is specifically designed to offer protection for vehicles under your care, custody and control, addressing risks such as loss, damage, and theft.
The cover and cost of the policy depend on your specific business activities. Factors such as how often you handle customers’ vehicles and whether you undertake vehicle repairs play a significant role in determining your insurance needs.
What Types Of Businesses Need Motor Trade Insurance ?
Motor trade insurance is crucial for various businesses within the automotive sector, offering tailored protection against specific vehicle-related risks. Whether involved in buying, selling, repairing, or any other vehicle interactions, a motor trade insurance policy is essential.
Key businesses needing motor trade insurance are:
Motor dealership
Dealerships sell both new and used cars and will need to protect their assets and cover liabilities, especially during test drives.
Independent pre-owned car traders
These traders mainly buy and sell pre-owned cars and will need to be covered for loss or damage.
Vehicle auction houses
Vehicle auctioneers sell cars through bidding processes and normally cater to retail and wholesale buyers. By having a motor trade insurance policy in place, auction houses will be able to safeguard their vehicles.
Vehicle brokers
Brokers facilitate car sales by acting as intermediaries between car sellers and buyers. Vehicle brokers don’t own the vehicles in question but they are required to handle the cars from time to time. This means both brokers and company vehicles will need to be insured.
Vehicle importers
Importing goods always comes with risk attached, but even more so when importing high-value goods such as vehicles. Vehicle importers import cars from other countries into the local market. They are responsible for handling customs, legalities, and logistics and will need to be insured on all fronts.
Valeting and detailing services
When handling customers’ vehicles, it’s best to ensure that both employees and the cars they are driving are protected against potential damages.
Breakdown and recovery firms
For companies specialising in on-site vehicle maintenance and repair services, it might be worth mitigating the associated risks with a comprehensive insurance policy.
Scrap dealers
Scrap yard owners can protect their employees by taking out a motor trader insurance policy that addresses environmental and safety hazards related to vehicle scrapping.
Vehicle accessories and parts retailers
These retailers specialise in new and used vehicle parts and accessories. With car parts and accessories being costly, it’s best to invest in insurance cover to protect them from damage or theft.
Car restoration businesses
It’s worth safeguarding operations, particularly when restoring classic or damaged vehicles.
Vehicle rental companies
Rental businesses provide short-term vehicle rentals to firms or individuals. They may offer a range of vehicles, including cars, vans, or specialised vehicles, all of which will need to be insured.
Car jockey services
Found at airports or large venues, these services require protection against damages during vehicle handling.
Garages (repairs, MOTs, services)
When operating a vehicle repair centre, it’s worth securing comprehensive cover for liabilities and potential damages.
Bodyshop repair garages
Specialising in vehicle bodywork, these garages need specific cover for potential damages.
What Does Motor Trade Insurance Cover?
Motor traders insurance encompasses a range of cover options tailored to protect various aspects of automotive businesses. From covering accidental damage during vehicle repairs to ensuring legal compliance with employers’ liability, this insurance is comprehensive.
Accidental damage
Although not a legal requirement, this cover option is ideal for repair garages and body shops. It covers accidental damage to a customer’s vehicle in your care, e.g., during repairs or servicing.
Road risk insurance
This cover is legally required and ideal for all motor trade businesses. It covers vehicles under your care, including your own and those awaiting repair or sale.
Employers’ liability
Employers liability insurance is a legal requirement in the UK and covers costs and compensation for employee injuries on the job.
Product liability
This cover is great for businesses dealing with parts and services but is not legally required. It provides cover for legal action due to faulty parts or services.
Public liability
Public liability insurance will front legal costs and compensation for injuries on your premises and is ideal for all motor trade businesses. However, it is optional and not legally required.
Combined road risk and liability
This is an ideal cover for those seeking comprehensive insurance but remains entirely optional. It consists of both road risk insurance and various liability cover options.
Material damage
This covers all the company equipment and cars you own, including your unsold vehicles.
Extra drivers
If you need your motor trades insurance to cover all your drivers, then it would be best to opt for an “any driver” policy. However, if this is too expensive you can always add all your drivers individually to your policy.
Vehicle types
You can save money by tailoring your policy to cover only selected vehicles that your staff will drive.
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What Is Typically Excluded From Motor Trade Insurance?
Although motor traders insurance provides comprehensive cover, it also has specific policy exclusions and limitations in place that you have to be mindful of.
Here are some scenarios where you won’t be covered should a vehicle in your care get damaged:
- Personal use of business vehicles: Many motor trade insurance policies only cover vehicles used for work purposes.
- Voiding your policy: Using work vehicles instead of your own vehicles for personal use without the appropriate additional cover can result in voiding your motor trade insurance.
- Unqualified drivers: Cover may not apply if an unlicensed or improperly licensed driver operates a vehicle.
- Illegal activities: Any damages or losses resulting from illegal activities may not be covered.
- Specific types of vehicles: Some policies may exclude certain types or categories of vehicles.
What Level Of Motor Trade Insurance Cover Do I Need?
Choosing the right level of motor trade insurance policy is vital to ensure your business is fully protected. There are three primary cover options available, each offering different levels of protection to suit the varied needs of businesses within the motoring trade industry.
- Third-party cover: From a legal point of view, this is the minimum cover you must have to drive on public roads in the UK. It covers damages to third parties, such as other drivers, pedestrians and property when using a customer’s or company car. Damage to the vehicle you’re driving and any personal injuries are not covered.
- Third-party, fire, and theft cover: This option covers everything that’s typically covered by third-party only cover. Repair and replacement costs are also covered by third-party, fire, and theft cover if a car in your care is stolen or damaged by fire. It’s important to note that you won’t be covered for car damages caused by an accident if you are at fault.
- Comprehensive cover: Although costly, this option will cover injury or damage to third parties and fund the required car repairs regardless of who caused the accident.
What Additional Types Of Motor Trade Insurance Cover Are Available?
Many providers allow you to add various features and specialised cover to your policy, enhancing protection for different aspects of your operations. Here are some of the additional types of trade insurance cover you should consider.
- Material damage cover: Protects assets like unsold cars in your showroom and equipment.
- Business premises cover: Provides financial protection for the physical location of your business, be it a building or forecourt.
- Demonstration cover: Protects vehicles taken out for test drives, typically offering third-party cover.
- Specialist vehicle cover: Insurance for your unique vehicles such as vintage cars, heavy goods vehicles, or high-end sports cars.
- European cover: Protects operating vehicles across European countries.
- Goods in transit cover: Provides cover for items transported as part of your business operations.
- Parts-only policy: This is a cost-effective insurance solution tailored to parts-related operations.
What Is Combined Motor Traders Insurance?
Combined motor traders insurance is a comprehensive package specifically designed for businesses within the motor trade industry. This combined insurance policy consolidates various types of cover into one, providing a streamlined and efficient solution for motor traders. Additionally, combined cover is more cost-effective compared to individual insurance policies.
What’s included:
- Road risk insurance: This component of the combined motor trade insurance policy covers vehicles that are under your care. This includes both vehicles that you own and those that are awaiting repair or sale, ensuring that you have the necessary financial and legal protection in place for all vehicle handling activities.
- Business insurance: This aspect of the combined motor trade insurance policy is designed to protect against various business-related risks. It covers potential damage to your premises or any equipment you use.
- Public liability cover: This cover protects your business against legal costs and potential compensation claims if someone were to injure themselves on your premises.
Can Anyone Get Motor Trade Insurance?
Motor trade insurance is widely accessible for professionals in the automotive sector, though eligibility and pricing are influenced by various factors. Below is a structured breakdown to help you navigate these considerations.
Age requirements and impact on cost
- Over 25: Generally eligible for motor traders insurance without complications.
- 23 and older: Possible acceptance by some insurers, depending on the business type.
- Under 23: More challenging to obtain cover, though specialised providers might assist.
- Younger applicants: May face higher premiums due to perceived road risks.
Driving record considerations
- Criminal convictions: Could affect eligibility, varying by offence nature.
- Motoring convictions: Driving offences may impact insurance accessibility.
- Driving bans: Previous bans pose challenges in securing motor trade insurance.
Motor trade business type and activities
- Specific cover: The nature of your motor trade activities (e.g., sales, repairs, valeting) influences insurance terms and availability.
Consulting with experts
- Specialised assistance: Engaging with a specialised motor trade insurance broker ensures tailored advice and cover options.
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Can I Get Part-Time Motor Trade Insurance?
Yes, part-time motor trade insurance is readily available for individuals who engage in buying, selling, repairing, or valeting vehicles on an infrequent basis.
Policies for part-time motor trade insurance can be tailored to match the particular needs of the trader, considering factors such as the number of vehicles dealt with and the time spent in the trade. This approach ensures cost-effective cover.
- Legally required cover: Road risk-only insurance is the basic level of insurance mandated by law for part-time motor traders.
- Eligibility requirements: To be eligible for part-time motor trade insurance, individuals must demonstrate evidence of their work in the motor trade, through documents like sales receipts or invoices. Additionally, there is typically a minimum requirement regarding the number of vehicles that must be bought, sold, serviced, or repaired per year, usually ranging from 7-10, though some policies may offer cover for as few as 5 vehicles per year.
How Much Does Motor Trade Insurance Cost?
The average cost of motor trade insurance in the UK has experienced a notable increase, now averaging around £776. This represents a substantial £222 rise, equating to a 40% increase over the past year.
What factors affect the cost of motor trade insurance?
Insurance is crucial for your business’s security, but it doesn’t mean you should overspend. It’s also vital not to compromise on the cover you need, as a cheap policy might fall short. Here’s what to consider when looking for affordable motor trade insurance:
Nature of your business
If you work part-time from home selling a few cars, you might only need third-party road risk cover.
Number of cars to cover
Policies covering unlimited cars will be more expensive than those with a limit.
Type of vehicles
Choose a policy that reflects the cars you work with. Cover for ‘any vehicle,’ including lorries and specialist cars, will cost more than standard vehicle policies.
Number of drivers to insure
Policies insuring ‘any driver’ will cost more than those covering named drivers. To lower costs, insure employees over 25 with clean driving records.
Improving security
Implementing a secure garage, CCTV, or gated forecourt can lower your premiums.
Paying for cover upfront
Paying in full can save on admin fees and interest, compared to monthly instalments.
Transferring your no-claims bonus
Some insurers allow you to transfer your personal no-claims bonus to your motor trade policy, cutting costs.
Increasing your voluntary excess
Agreeing to a higher excess can lower premiums but ensure it’s an amount you can afford.
Use comparison websites
Utilise motor trade insurance comparison websites like SimplyQuote to find dozens of deals that meet your business needs without breaking the bank.
How Can I Keep My Motor Trade Insurance Costs Down?
To effectively reduce your motor trade insurance costs, adopting a strategic approach is key. We’ve outlined various practical strategies, detailing the actions you can take and the benefits they offer, to help you achieve more affordable insurance premiums.
Maintain healthy driving records
Ensure all employees driving vehicles have a clean and healthy driving record. Insurers often reward responsible driving with lower premiums.
Leverage driving experience
Highlight the driving experience of you and your staff. More experience often translates to lower risk in the eyes of insurers.
Invest in security
Implement extra security measures for your business, such as alarms or surveillance. Enhanced security can reduce the risk of theft or vandalism, potentially lowering premiums.
Tailor vehicle cover
Reduce the number of vehicles covered or ensure the policy only covers the types and sizes of vehicles you need. Customising cover to match your actual needs can eliminate unnecessary costs.
Consult with your insurer
Discuss with your insurer how you might modify your cover to reduce overall costs. An insurer can provide insights into specific adjustments that align with your risk profile.
Do your research
Compare quotes and explore different options. Shopping around can help you find cheaper insurance.
Consider vehicle types
Be mindful of the types and sizes of vehicles you and your staff will be driving. Aligning cover with actual vehicle usage can prevent overpaying.
Can Insurance Brokers Reduce The Cost Of My Motor Trade Insurance?
Yes, engaging a motor trade insurance broker, particularly one with a specialisation in the motor trade sector, can be instrumental in securing more affordable insurance quotes.
Brokers possess in-depth knowledge of motor trade insurance and can guide you through the available options. They also have established relationships with insurers specialising in motor trade policies often resulting in access to competitive and specialised quotes.
It’s best to opt for a broker who is transparent about their insurer relationships and commission structures. This fosters trust and ensures recommendations are made with your best interests in mind.
Alongside a broker’s assistance, always be sure to independently compare quotes from various insurance providers. This ensures a comprehensive view of the market, increasing your chances of finding more favourable rates.
How To Compare Motor Trade Insurance Quotes With SimplyQuote?
To provide you with a quick quote, all we need is:
- Your business details
- Your motor trade industry experience
- What type of cover you would like
- Your claims history
- Your personal details
Looking for cheap motor trade insurance? Get your quote today!
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Frequently Asked Questions
Motor trade insurance, or traders’ insurance, is a tailored policy crafted for the automotive industry, ensuring cover for employees handling customer vehicles and the company’s own fleet. It’s indispensable for various sectors, including repair, servicing, and sales, providing fully comprehensive insurance for all team members, regardless of their experience level.
Companies that could benefit from a motor traders policy include:
- Tyre and exhaust fitters
- MOT stations
- Service and repair garages
- Mobile service operators
- Used car dealerships
- Transit companies
- Window tinting businesses.
Auto traders insurance is also recommended for anyone who is responsible for customers’ vehicles during their day-to-day operation.
If you make any significant changes to your motor trade business, it’s essential to notify your insurer. This includes adding or removing drivers, changing your trading address, moving into business premises, changing the trades you operate in, taking on new employees, increasing the number of vehicles you trade, or any other changes that might require you to modify your insurance cover.
The MID is a central record of all insured vehicles in the UK. If you need to add or remove a vehicle from the MID, you should contact your insurer with the necessary details. This ensures that your vehicles are correctly registered and comply with Continuous Insurance Enforcement (CIE) regulations.
If you are a motor trader working from home or on a part-time basis, you may qualify for a road risks policy. This type of policy is tailored to the needs of home-based traders and can be obtained by contacting specialised insurers. It’s essential to provide accurate information about your business to get the right cover.
If you have a road risks policy and want to upgrade to a traders combined policy (suitable for motor traders with premises), you can contact your insurer to discuss the options. A traders combined policy offers more comprehensive cover, including premises and liability protection, and may be more suitable for growing businesses.
The process for making a claim on your insurance policy will vary depending on your insurer. It’s advisable to refer to the claims section of your policy or contact your insurer directly for guidance. Prompt reporting and providing all necessary documentation will help ensure a smooth claims process.