Frequently Asked Questions

Motor trade insurance provides cover for customer vehicles that are in your care for the purposes of your business, and for vehicles you are driving in the process of buying and selling them.

Examples of activities covered under a motor trade insurance policy include:

• Collection and delivery of a customer’s vehicle.
• Road testing a customer’s vehicle as part of a repair, service, or MOT test.
• Vehicles you have purchased for trade purposes (please note you will only be covered while collecting or delivering vehicles immediately after you have bought them).
• Vehicles being used on an accompanied demonstration.

There are different levels of motor trade insurance policies available. GoMotorTrade helps our customers find a wide range of insurance types, including:

• Third Party Only: This is the legal minimum level of cover required by a motor trader. The policy will list named drivers who are covered to drive any vehicle in relation to the motor trade. The policy covers damage to other party’s vehicles only.
• Third Party, Fire and Theft: As with third party cover, this policy covers any third party damage or injury. In addition to this, any vehicles under the motor trader’s care will be covered against the risk of fire or theft. If a customer’s car is stolen or damaged by fire while under your control it will be covered by this level of insurance policy.
• Comprehensive: This covers the same risks as a third party, fire and theft policy, but also includes any accidental damage to any vehicle owned by, or in the care of, the motor trader.
• Motor Trade Liability: This is a combined policy, providing cover for:
  • Public Liability: Cover for loss of, or damage to, property and injury to the public.
  • Employer’s Liability: Cover in the event of an employee sustaining an injury while at work.
  • Sales and Service Indemnity: Cover against the risk of injury or damage due to motor trade related activities.
  • Road Risks: Cover for those that are required to drive vehicles in their care; protects against damages and accidents while on the road.
• Combined Motor Trade Insurance: This is a combination policy, which allows you to combine cover depending on your needs. Policies may cover liabilities, property, and vehicles. This is suitable for traders who operate from their home or from a dedicated business premises.

The cost of your motor trade insurance policy will be based upon the type of level you require and the amount of risk your business poses to the insurer. However, there are ways that you can actively reduce your motor trade insurance premiums, such as acquiring a no claims bonus on your motor trade insurance and personal car insurance. Your insurance premiums will also be lower if you avoid working with expensive vehicles such as vintage cars or high performance vehicles.

As GoMotorTrade works with a number of specialist brokers you will be able to compare motor trade insurance prices and choose one that is suitable for your business and competitively priced.

If you work in the motor trade it is a legal requirement that you have at least third party cover. By law you must have a minimum of third party motor trade insurance in place in order to trade legally.

More comprehensive cover is a matter of choice, and something you should consider to protect your business. If during the course of your business you cause injury to another person, or damage to someone else’s property, you could be required to pay compensation. If you do not have an insurance policy in place to cover that risk you would need to fund the compensation from your business.

You must work in the motor trade to be eligible for motor trade insurance, and insurance companies may ask for proof of this. It doesn’t matter if you work full or part time, from your home, or from a business premises, you can still qualify for motor trade insurance.

If you or one of your employees are under 25 certain conditions will apply to the policy. Firstly, the young person must have held a full UK driving licence for at least 12 months. Secondly, there will be restrictions imposed about the performance level of cars they are covered to drive.

Most insurance companies will require proof that you are involved in the motor trade. Invoices for the buying and selling of car parts or vehicles, as well as customer invoices are examples of paperwork your insurance company might ask for. Some companies require proof up front before the policy is issued, while others have been known to make spot checks.

If you work in the motor trade on a part-time basis you can still get motor trade insurance, but your part-time status needs to be disclosed. Insurance companies consider part-time workers to be a greater risk and so will make adjustments to the premium, or add exclusions to the policy to reflect that.

Anyone named as a driver on the policy and works in the motor trade will be covered. You can add additional drivers to your motor trade policy, but you must contact your insurance company to do so.

Cars, vans, trikes, quads, motorbikes can all be covered by motor trade insurance. Most types of vehicle you take under your control as part of your motor trade business will be covered by your insurance policy. However, it is essential that you disclose the types of vehicle you work with when taking out your policy, as different insurance companies have different levels of cover and exclusions, and they will ensure the policy is appropriate for your needs.

Some insurers allow you to add personal use cover to your motor trade policy, but this is rarely included as standard and should be discussed with your insurer. Adding this cover will increase your premium and you may find it more cost effective to take out a separate personal motor insurance policy.

The Motor Insurance Database is a log of insured vehicles that can be accessed by the police and DVLA in a bid to combat uninsured drivers.

Any vehicle under your control in connection with your motor trade business for 14 days or more will need to be listed with the MID via your insurance company.

You cannot obtain information directly from the Motor Insurance Database, but your insurer can. You need to contact your insurance provider and ask them for a list of vehicles on your policy.