What Is Motor Trade Insurance: A Complete Beginner’s Guide

​Whether you buy, sell, repair, or move vehicles as part of your business operations, having the right insurance in place is vital. Motor trade insurance is not necessarily a legal requirement. Nonetheless, it protects businesses and individuals involved in any aspect of the motor trade, from part-time traders to full-scale dealerships. This guide explains what motor trade insurance is, who needs it, and how the right cover keeps your business protected.

What Is Motor Trade Insurance And Who Needs It?

Motor trade insurance, also called motor trade vehicle insurance, is designed for anyone whose business handles vehicles. This includes car dealers, mechanics, valeters, MOT centres, and recovery agents.

A standard motor insurance policy only covers the named owner or driver of a specific vehicle. In contrast, a motor trade policy provides cover for vehicles owned by the policyholder and used for motor trade purposes only. This ensures you can legally use your trade-owned vehicles when collecting stock, moving vehicles between premises, or offering accompanied test drives in vehicles that belong to the business.

Types Of Insurance For The Motor Trade

Motor trade insurance isn’t one-size-fits-all. Cover is divided into two types:

1. Road Risk Insurance

This provides protection when driving vehicles owned by the policyholder on public roads for motor trade purposes, such as collection, delivery, or testing. Road risk cover is required if you are driving your own trade vehicles, and can include third-party, third-party fire and theft, or comprehensive options.

2. Combined Motor Trade Insurance

A combined policy extends protection beyond the road, covering your business premises, equipment, and trade-owned stock of vehicles. It’s ideal for larger businesses such as workshops or forecourts. This type of cover can also include employers’ liability and public liability insurance for added peace of mind.

Choosing between the two depends on how and where you operate. Smaller traders may only need a basic road risk policy, while a garage owner will benefit from the wider protection of a combined plan.

Why Is Motor Trade Vehicle Insurance Important?

Working in the motor trade involves significant financial and legal risks. Without appropriate insurance, you could face serious costs if a trade-owned vehicle is damaged, stolen, or involved in an accident while in your care.

In many cases, it’s a legal requirement to have at least road risk cover if you’re driving or keeping untaxed vehicles under trade plates. Having the right protection not only aids legal compliance but also helps to build trust with customers and suppliers.

How To Choose The Right Insurance For The Motor Trade

When selecting your policy, start by considering the scope of your operations:

• Number of trade-owned vehicles you handle or store
• Type of work you carry out (sales, repairs, recovery, etc.)
• Premises and tools that need protection
• Employees who drive or handle trade vehicles

Always provide accurate details when getting quotes. Insurers will assess your experience, driving history, and business type to ensure you get the right level of cover.

A specialist broker can help you compare policies from trusted providers and secure the most suitable deal for your business.

Get Expert Motor Trade Insurance Advice From Crowthorne

Starting out in the motor trade can feel daunting, but getting insured doesn’t have to be. At Crowthorne, we specialise in finding the right motor trade vehicle insurance for businesses of all shapes and sizes. Whether you’re just setting up or expanding, our expert brokers will help you choose a policy that protects your vehicles, your business, and your reputation.

As proud members of the British Insurance Brokers’ Association (BIBA), we provide professional, impartial advice you can trust. Contact the Crowthorne team to find out how we can help you secure the right motor trade insurance for your needs.

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