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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 business when your employees drive or work on customer vehicles, as well as company-owned vehicles. It’s a must-have if you and your employees repair, sell, or handle vehicles in any capacity. This is different to a business car insurance policy, which covers drivers who use their car for more than just social use and daily commuting.

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.

What type of businesses does motor trade insurance cover?

The types of businesses that motor trade insurance covers typically includes: 

  • MOT test centres
  • Mobile mechanics
  • Car valeting and detailing businesses
  • Scrap yards
  • Car dealerships
  • Part-time motor traders
  • Vehicle import/export businesses

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What does motor trade insurance cover?

Motor trade insurance protects vehicles in your care as part of your business. The exact cover depends on what you do, but here are the essentials:

  • 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.

Not enough? Well… depending on the policy you choose, you may also come across these cover options:

  • Employers’ liability - This is required by law if you have staff. Employers' liability covers claims from employees.
  • Product liability - This protects you if a faulty part you’ve supplied causes damage or injury.
  • Public liability - This covers legal costs if someone is injured on your premises.

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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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, 2nd Floor 5-10 Sparrow Way, Lakesview International Business Park, Hersden, Canterbury, Kent, United Kingdom, CT3 4JH Registered in England and Wales, No: 04668665.

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