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Motor trade insurance

Motor trade cover for full-time and part-time businesses

  • Specialist cover from our trusted partner Quote Me Today

  • Fill out a short quote form and request a call back to get a quote

What is motor trade insurance?

Motor trade insurance, or traders' insurance, covers your employees when they’re driving or working on your customers’ vehicles, as well as those owned by the business itself.

It's used by a wide range of businesses. Usually, it benefits those involved in repairing or selling vehicles.

The most important factor when choosing the correct trade insurance is flexibility. You’ll likely want policies that cover every member of staff in your business. This means that even your most recent recruits can use your vehicles without worry.

Of course, policies vary between insurers. So, you should do your research to find out:

  • Exactly what each policy covers
  • The level of protection offered
  • Any exclusions that apply

Motor trade insurance isn't just for driving other people's cars - if you interact with customer vehicles in any way, you should consider it. A prime example is a mobile tyre-replacement service.

How does a motor trade insurance policy work?

Trade insurance is a little different to your standard car insurance policy, but the basics are the same. Depending on what level of cover you get it covers the vehicles in your care for:

  • Loss
  • Damage
  • Theft

No businesses are exactly alike. Insurance companies understand this and that’s why they generally offer tailor-made policies to meet your firm’s specific requirements.

You need to consider the protection your business requires. Think about:

  • What kind of work your business carries out
  • How often you’re driving customers’ vehicles
  • If you’re repairing customers’ vehicles

Making sure your policy covers these risks is essential. It means you’re less likely to have any claims rejected and you aren't paying for cover that’s not needed.

Is motor trade insurance right for me?

The requirement to have motor trade insurance applies to all businesses – whether you’re self-employed, part-time or run a fairly large, limited company. The same risks apply.

If your business is involved with vehicles, chances are you’ll need this type of cover. This includes business like:

  • Car dealers
  • Mechanics
  • Body repair shops
  • Breakdown recovery firms
  • Valet parking services
  • Car restorers
  • Car valeting businesses
  • Scrap yards
  • Those involved in repossessing vehicles

If the vehicles come under the ‘care, custody and control’ of your staff, you're likely to need this type of cover in some form.

Things like driving other cars cover and any driver insurance won't cover your employees for driving clients' cars. So don't assume you're covered by these types of insurance

You may also need combined motor trade insurance. These policies are designed for traders with more complicated businesses. For example, if you’re holding several vehicles on the premises.

Depending on the insurer, these policies might also include cover for:

  • Stock stored
  • Portable tools
  • Machinery
  • Business interruption

Whether you need this level of cover depends on the nature and size of your firm.

Can I get part-time motor trade insurance?

Yes, if you buy, sell, repair or valet vehicles on a part-time basis, then our partner Quote Me Today can offer you an insurance policy. You may only need road risk only insurance which is the minimum trade insurance required by law to operate, and provides you with cover for driving any vehicle you don't own in your care.

These flexible policies can help keep your costs down by only getting you covered for the things you need, such as the number of cars you deal with and the time you spend as a motor trader. If you work in the motor trade on a part-time basis, then there’s no need to pay for the same policy that a full-time motor trader would require.

To get a quote and buy cover you'll need to show proof that you're working in the motor trade, for example:

  • Sales receipts
  • Invoices

You also need to be buying and selling, servicing or repairing a minimum number of vehicles. This is usually between 7-10 vehicles per year, but there are policies that provide cover for as few as 5 vehicles per year.

Can anyone get motor trade insurance?

Most people over the age of 25 should be able to get traders’ insurance for their business without issue. Some insurers might even accept you for certain business types from the age of 23. Getting cover when you're younger than this might be difficult, but you can give our partner Quote Me Today a call and see if they can help.

The younger you are, the more you should expect to pay for cover. It’s similar to younger drivers on standard car insurance policies where lack of experience on the road means being classed as a higher risk.

Also, potential problems can occur if your driving record has:

  • Criminal convictions – largely depending on the nature of the offence
  • Motoring convictions
  • Driving bans

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What does motor trade insurance cover?

Motor trade insurance covers vehicles that are in your care as part of your business and cover varies depending on your business.

Accidental damage cover, for example, might be useful if you run a repair garage. It means you’re covered for accidental damage caused to a customer’s vehicle.

Road risk insurance is a legal requirement and makes sure that the vehicles under your care are protected. This includes your own vehicles as well as those awaiting repair.

Depending on the policy you choose, you might also see these cover options:

  • Employers’ liability cover, which is a legal requirement, protects you from legal costs and compensation if an employee is injured on the job
  • Product liability covers you if someone takes legal action against you due to faulty parts
  • Public liability covers you if someone injures themselves while on your premises and takes legal action against you

You can also get policies that combine road risk and liability cover. This is why it’s worth exploring your options and seeing exactly what you’re getting for the price.

Each motor trade insurance policy is tailored specifically for your business, but a motor trade policy might typically cover:

  • Damage to any vehicles or equipment on your premises
  • Vehicles that you drive or work on as part of your business - this is known as a road risk policy
  • Members of staff driving vehicles as part of the business
  • Claims made against you and your workers by members of the public.

What else can motor trade insurance cover?

You can extend motor trade policies in various ways to meet your needs. Depending on the insurer, policies offer:

  • Uninsured loss recovery
  • Motor prosecution defence
  • Essential personnel protection
  • Fines and damage cover
  • Material damage over
  • Business premises cover
  • Demonstration cover
  • Specialist vehicle cover
  • European cover
  • Goods in transit
  • Parts only cover

Uninsured loss recovery covers extra costs following an accident that’s not your fault. The other party’s insurance should cover the main claim. But it might not cover things you have to pay yourself, like hiring a replacement car or taking public transport.

Motor prosecution defence covers the costs of hiring someone to defend you against a motoring-related prosecution. Depending on the policy, you might not be covered for prosecutions for drink or drug driving and parking offences.

Essential personnel protection pays out if a key member of the business dies or is permanently disabled.

Fines and damage cover is there for non-completion of contracts. Some extensions even cover public relations expenses in relation to claims.

Material damage cover protects any vehicles or equipment you own. For example, if you run a motor dealership it means your unsold vehicles are insured.

Business premises cover protects the building itself, as well as tools and machinery inside. If you have a break-in and thieves steal or damage valuable equipment, you should be covered.

Demonstration cover protects any cars that are used by customers for test driving. Depending on the policy, you might have the option of adding accompanied or unaccompanied demonstration cover.

Specialist vehicle cover lets you work on heavy goods vehicles or high-performance cars. Standard motor trade insurance policies usually cover standard vehicles or those under a certain weight or value.

European cover protects you for any vehicles that are driving in Europe.

Goods in transit covers any goods in your vehicles that you transport as part of your business.

Parts only cover is for who don’t actually drive their customers' cars. Here you get what you pay for - only the parts you use are covered.

What doesn’t motor trade insurance cover?

Most policies only cover vehicles that are used for work purposes.

That means any fleet vehicles that are used by employees for personal use aren't usually covered. If you think this might be an issue, check with your insurer before committing to a policy.

What level of cover do I need?

As with standard car insurance, there are 3 levels of cover you can choose when getting a motor trade insurance policy.

  • Third party is the minimum level of cover. It covers damage to third parties while you’re using a customer’s or a company car. It doesn’t cover damage to the car you’re driving.
  • Third party, fire and theft covers third-party damage, but also protects you from repair and replacement costs if the car is stolen or suffers fire damage.
  • Comprehensive cover provides the same level of cover as third-party, fire and theft and adds protection for the car you’re driving as well. This applies to cars that belong to your company as well as cars belonging to customers.

How can I keep my insurance costs down?

You might be able to save money on your motor trade insurance if you:

  • Ensure all employees that are driving vehicles have a healthy driving record
  • Have more driving experience
  • Invest in extra security for your business
  • Reduce the number of vehicles that are covered under the policy

Your insurer might also discuss how you can modify your cover to reduce your overall costs, such as limiting what’s covered. If you're looking for cheaper insurance it’s worth doing your own research too.

The types of vehicles you and your staff will be driving is also relevant. Cover for larger vehicles might be more expensive so make sure the policy only covers what you need.

Why use our trusted partner Quote Me Today for your cover?

Founded and based in the UK and specialising in business and motor insurance, they have a dedicated motor trade insurance department. You can be confident of top-rated service and guidance from industry experts to get you the best deal for what you really need. Their customers rate them as 'Excellent' on Trustpilot.

We're constantly monitoring customer feedback and regulations to ensure we only work with the companies we feel offer fair value. Like us, Quote Me Today are also authorised and regulated by the Financial Conduct Authority. This means they work to a strict framework of principles that ensure customers are treated fairly.

What our car insurance expert says

"There can be lots to consider when looking at trade insurance, and it might seem confusing figuring out what’s covered or what you really need. Like normal car insurance, every business is different and will need different requirements.

Our specialist and trusted partner Quote Me Today can help get your business covered without paying more than you should for things you don’t need."

Louise Thomas, Motor Insurance Expert at Confused.com
Motor Insurance Expert Confused.com logo

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Page last reviewed: 07 June 2023

Reviewed by: Louise Thomas

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Motor Trade insurance is arranged and administered by Quote Me Today Ltd who are authorised and regulated by the Financial Conduct Authority No: 786619. Registered office, Office 2A, First Floor, 3 Jubilee Way, Whitstable Road, Faversham, Kent, ME13 8GD Registered in England and Wales, No: 04668665. Our service is free and compares a wide range of trusted household names. Confused.com is an intermediary and receives commission, which is a flat rate fee from QuoteMeToday.co.uk if you decide to buy through their website.