Who is a motor trade policy suitable for?
Anyone who works in the automotive industry will need motor trade insurance. If you own the business or work for yourself, either as a sole trader or through a limited company, you will need to get your own motor trade insurance. However, if you work for a company, their insurance should cover you. But it is definitely best to check before you start work.
Here’s a short list of occupation-specific motor trades that we work with:
- Car traders
- Car valeters
- Car transporters
- Breakdown and recovery assistance providers
- Car restoration businesses
- Scrap yards and scrap metal dealers
- Car parking or car jockey services
- Tyre fitters
MOT stations, servicing, etc - Mechanics
- Part-time traders
- Start-up traders
- Home-working traders
What does motor trade insurance cover?
Motor trade insurance covers the varying risks of the motor trade industry. It protects your motor trade business and livelihood if something goes wrong, for instance, if you scratch a customer’s car while driving it back to them after repairs.
The great thing is that motor trade insurance is very customisable. You’ll be able to specify exactly what your insurance covers based on your unique needs. This means you can make the policy as lean or as comprehensive as you like, and only pay for what you need.
A typical policy tends to cover the below.
Those who work in the motor trade industry and drive customer vehicles and business vehicles on the road will need some form of road risk insurance. Road risk insurance is required by law. It can be broken down into three sub-levels.
Third-party only
This is the legal minimum requirement. It covers the cost of damage to any other car, property or person if you have an accident while driving a customer’s or business’s vehicle. However, it doesn’t cover the car you’re driving.
Third-party, fire and theft
This offers the above, plus cover for vehicles in your care, custody or control that are stolen or damaged by fire.
Comprehensive
Comprehensive cover includes third-party, fire and theft, and it also covers the car you’re driving. This could be a customer’s automobile or a business vehicle.
Liability insurance covers the cost of legal fees and compensation if you get sued or taken to court by an employee, customer or member of the public. Liability insurance is typically broken down into three sub-categories:
Employer’s liability
Employers liability insurance is legally required if you employ anyone. It typically includes legal fees and compensation if one of your employees becomes injured at work
Product Liability
Although not legally required, product liability covers you if a customer takes you to court over a faulty product. For example, if you fix their car with a product that later fails, and they become injured in the process. Your policy could cover the legal fees and compensation that could result from the claim.
Public Liability
A public liability insurance policy should cover you if a member of the public has been in an accident because of your business. For example, if someone tripped in the forecourt and injured themselves, they could make a case against you.
What else can a motor trade insurance policy cover?
There are optional add-ons you can specify when tailoring your policy and comparing motor traders insurance providers.
Material damage
This insures any business assets up to a certain amount and includes parts and stock you keep on the premises.
Business premises cover
Specific cover for your workplace building or forecourt. If you rent your premises, it’s worth checking with your landlord whether they provide this as standard.
Demonstration cover
If you run demonstration cars or let customers drive vehicles for test drives, ask a motor trade insurance broker about demonstration cover.
Specialist vehicle cover
Cover for more specialist vehicles, including heavy goods vehicles, vintage cars and exclusive vehicles.
European cover
If you need to drive stock or customers’ vehicles across the continent.
Goods in transit cover
This protects any goods you may transport using trade vehicles as part of your business.
Parts only
Some providers offer motor trade insurance even if you don’t drive your customers’ cars at all. You may find a parts-only cover is cheaper when conducting a motor traders insurance comparison. Bear in mind, however, that you won’t be covered even to move the vehicle.
Tips to reduce the cost of your cover
As a specialist type of insurance that covers a lot of eventualities and items, motor trade policies can be pricey, especially if you’re new to the motor trade business. If this is your first time buying insurance, you can get expert advice from our panel of insurance providers when you submit your details through the quote form.
Here are our top tips for keeping the cost of your policy down:
1
Only pay for what you need
Policies can be slim, or they can be huge. If there are certain insurance products you don’t need, take them off and create the right policy for your business requirements. For example, mobile mechanics who don’t drive customers’ or the business’s cars on the road won’t necessarily need road risks cover.
2
Specify the type of vehicles you work on
If you only work with standard vehicles, make sure you’re not ensured for ‘any vehicle’, which will include more expensive, specialist vehicles.
3
Set a vehicle limit
Consider limiting the number of vehicles you want to insure. Multi-car motor trade insurance may be more expensive.
4
Consider a higher excess
Like with all insurance premiums, you’ll agree to a voluntary excess when you purchase the policy. A higher voluntary excess will reduce your premium. But it must be realistically affordable for the business!
5
Who do you employ?
Try to employ experienced drivers with clean driving records, as young drivers under the age of 25 could be more expensive to cover.
6
How many drivers do you need?
Only cover the number of drivers you need, rather than ‘any driver’ to bring down the cost of your motor trade insurance.
7
Pay annually
Paying monthly might be less of a sting, but it’s likely to make your premium more expensive. Pay your motor trade insurance annually if you can.
8
No claims bonus
Just as with standard car insurance, motor trade insurance cover comes with a no–claims bonus. If possible, try to build yours up to reduce your premium year-on-year. Your personal driving no–claims bonus will be taken into account, but you can also ask if there’s an option to move it over to this policy. Some insurers will let you transfer it.
9
Improve your security
Upgrading your security measures, such as CCTV, gates, locks and burglar alarms, could improve your chances of lowering your motor trade insurance cost.
10
Compare every year
Although it’s easy to renew every year with the same provider, most policies will increase with age, so it’s always worth doing an insurance comparison. Our partner’s tool makes it as easy as possible to help find a competitive quote.
What is the Motor Insurance Database (MID)?
The MID is the nationwide record of all insured vehicles in the UK. It’s used by the police and the DVLA to check and enforce motor insurance laws. Motor traders must register any vehicles for work or personal use. When you buy a policy, the provider will contact you to get the relevant data to update the database. This means that whenever a car comes into or leaves your business, you must let your motor trade insurance provider know as soon as possible, so that they can update the database for you.
Frequently Asked Questions About Motor Trade Insurance
Buying motor trade insurance can be a complicated business, especially if you’re new to the trade. We’re here to make things as simple as possible, so here are a few questions that pop up often.
What do I need to purchase a policy?
You will need to prove that you own and run a relevant business. When you compare motor trade insurance quotes, you’ll be asked questions like:
- How many years you’ve been trading
- The trading address
- The type of business
This information should help our partners match you with providers.
Is having a motor trade insurance policy a legal requirement?
If you run a business in the motor trade, yes, it is a legal requirement. If you don’t have at least basic cover, you will be breaking the law. Without motor trade insurance, you can be fined thousands for each day you’re not covered.
Is there a minimum age to be eligible?
While there is no official minimum age, you will need to be old enough to drive. Some insurance providers will have a minimum age of 21 or even 25. If you need cover for people under 25, we can help. Our partners will arrange quotes from up to five motor trade insurance specialists, increasing your chances of finding a suitable policy for young individuals.
I run my business from my home. Do I need motor trade insurance?
You will still be required by law to have motor trade insurance. In terms of the level of insurance required, you may find that road risk insurance offers enough cover as opposed to combined motor trade insurance, which would protect the “on the road” risk part of your work as well as other areas, which may include your contents, equipment and stock.
Who can I ask about the type of cover I need?
When you submit the quote form, up to five insurance providers will contact you. These providers are specialists and can offer no-obligation advice and assistance while offering tailored policy quotations.
Does a policy cover driving any car?
It is a common misconception that the holder of a motor trade insurance policy will automatically be covered to drive any vehicle. This is usually not the case. A motor trade policy will normally only cover you to drive your own vehicles or customers’ vehicles, for motor trade purposes.
This means that you are most likely not covered for driving a family member’s car and perhaps less obviously, you will not be covered in the event that you simply fancy taking a customer’s car for a spin. The drive needs to be necessary or related to the work you are doing on that customer’s vehicle. If in doubt, check with your policy provider.
I work part-time. Can I have part-time traders cover?
If you have another job or you are retired while also running a part-time business, it is possible to arrange part-time cover. This will make allowance for your reduced hours, which may help reduce the cost of your policy.
Why Compare via Quote Goat?
Quote Goat has partnered with an easy-to-use motor trade insurance comparison platform. We focus on providing excellent customer service and being 100% impartial. Via Quote Goat you can find and compare motor trade insurance quotes quickly.
Compare multiple offers within seconds with our partner’s convenient motor trade insurance comparison tool. Request a quote online today.
