What Cover Do Home-Based Motor Traders Actually Need?

Written by Michael Foote, Insurance Expert

Michael Foote is the founder of Quote Goat and has over 20 years experience working in finance & insurance. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city.

Motor trade insurance without premises: what you need

Running a motor trade from home is becoming more common, but finding the right cover isn’t always straightforward. Many traders assume they need a commercial premises to get insured. That’s not true.

Whether you’re buying and selling cars from your driveway, working as a mobile mechanic, or operating as a car jockey, you can get motor trade insurance without a forecourt or workshop. The key is understanding what insurers actually need to know about your setup.

What insurers ask about home-based operations

When you apply for motor trade insurance working from home, insurers will ask specific questions:

• Where do you store vehicles? (Your driveway, on-street parking, private land)
• Do you carry out repairs or just buy and sell?
• Do customers visit your property?
• How many vehicles do you handle at once?
• Can you provide proof of trading activity?

Being vague or unclear about these details is the main reason home-based applications get declined. Insurers need to assess the actual risk, not make assumptions.

If you store vehicles at home, it’s worth reading about how vehicle storage affects your premium.

Road risk insurance: the core cover for most home traders

Most home-based motor traders don’t need premises liability or workshop cover. What you actually need is road risk insurance.

Road risk policies let you:

• Drive customer vehicles or stock you’re buying and selling
• Test drive cars before purchasing them
• Collect or deliver vehicles legally
• Use trade plates
• Add named drivers if you work with a partner or employee

This type of policy doesn’t cover repair work carried out at your home, but it does give you legal protection to operate as a trader without commercial premises.

For more detail on choosing the right level of cover, see what level of motor trade insurance you really need.

Vehicle storage at home: what’s acceptable?

Insurers take storage seriously. If you keep trade vehicles on your driveway or the street, they’ll assess risk based on:

• Security: Is your driveway gated? Do you have CCTV, motion lighting, or visible deterrents?
• Visibility: Are vehicles parked on a public road where theft risk is higher?
• Volume: How many cars do you keep at once? Most home policies limit this to one or two.
• Proof of custody: Can you show you legally own or have permission to hold the vehicles?

If you regularly store multiple vehicles or leave them on-street overnight, insurers may decline cover or charge higher premiums. Failing to disclose your storage setup can invalidate claims, even for unrelated incidents.

You can find more guidance on insuring your home driveway for storing trade vehicles.

What if you carry out work at home?

If you service, repair, or valet vehicles at your home address, you’ll need more than road risk insurance.

Additional cover may include:

• Public liability insurance: Protects you if a customer is injured on your property or if you damage their vehicle during work.
• Tools cover: Covers theft or damage to equipment stored at home or in a van.
• Employers’ liability: Legally required if you employ anyone, even part-time or casually.

Mobile mechanics and valeters typically need all three. Road risk alone won’t protect you if something goes wrong during a job.

Proof of trading: why it matters

Insurers see home-based traders as higher risk, partly because some applicants misrepresent hobby activity as a business. To prove you’re genuinely trading, provide:

• Recent invoices or receipts
• Bank statements showing vehicle purchases and sales
• HMRC registration or self-assessment records
• Photos of current stock
• Evidence of regular transactions or turnover

If you’re just starting out and lack a full trading history, some insurers will accept a business plan or proof of intent. Expect to pay more initially until you build a track record.

Optional extras to consider

Depending on your activities, you might also want:

• Sales indemnity: Covers disputes after a sale, such as claims the vehicle was misrepresented.
• Motor trade liability: Protects you against damage to customer vehicles while in your care.
• Legal expenses: Helps with the cost of disputes or regulatory issues.

These aren’t always included in basic road risk policies. Check what’s covered before you commit, and only add extras that match your actual risk.

Tips for getting accepted

To improve your chances of finding suitable cover:

• Be completely honest about where vehicles are stored and how many you handle at once.
• Show you have secure storage, even if it’s just a locked driveway with good lighting.
• Keep detailed records of every transaction.
• Start with a basic road risk policy and add cover as your business grows.
• Use a broker or comparison service that works with insurers experienced in home-based setups.

Some brokers specialise in non-standard motor trade risks and have access to insurers that mainstream providers don’t. It’s worth comparing several quotes to find the right match.

Can you get insured with no premises at all?

Yes. You don’t need a garage, unit, or forecourt. But you do need to demonstrate you’re operating a genuine business, even if it’s part-time.

Insurers are more cautious with home-based applications because the risk profile is different. You may not have the same security measures as a commercial site, and there’s often less separation between personal and business activity.

That doesn’t mean you can’t get covered. It just means you need to be transparent, organised, and realistic about the level of risk you present.

What happens if your circumstances change?

If you start storing more vehicles, move to a commercial premises, or begin employing staff, you must tell your insurer immediately. These changes affect your risk profile and your premium.

Similarly, if you stop trading or reduce activity, let your insurer know. You may be able to adjust your policy and reduce costs.

Never assume your policy automatically covers new activities or changes in how you operate.

Get a quote tailored to your setup

Whether you’re working from your driveway, operating as a mobile trader, or just getting started without premises, the right motor trade insurance is available. Use the quote button on this page to compare policies from insurers who understand home-based setups and can offer cover that fits how you actually work.

Further Reading

Compare Motor Trade Insurance