What Is Motor Trade Car Insurance and Why Do You Need It?

​Running a business in the motor trade comes with more than just tools, customers, and cars to look after. Whether you’re a mechanic, a part-time trader, a valeter, or you run an MOT centre, your customers entrust you with their vehicles. Your revenue and your reputation depend on keeping them protected. That’s where motor trade car insurance comes in.

It’s a specialist type of cover designed to protect you, your team, and your business from costly risks.

Understanding Motor Trade Car Insurance

Motor trade car insurance is designed for anyone who works in the motor trade industry and will only cover vehicles owned by the policyholder.

Unlike private car insurance, which covers you for your own vehicle, this policy extends protection to any vehicle you handle for work. That includes moving vehicles between locations, test driving after repairs, or storing customers' vehicles on your premises.

If you regularly buy, sell, service, or move vehicles as part of your job, you’ll need a car insurance motor trade policy rather than a standard one. While motor trade insurance itself isn’t a legal requirement to run a business, driving customer vehicles without the right cover would leave you uninsured and could lead to prosecution. Without proper protection, you could also face significant financial and reputational loss if an accident or theft occurs.

Who Needs A Motor Trade Car Insurance Policy?

This cover isn’t limited to large garages or full-time traders. It applies to any business that needs to drive, move, or store its own stock vehicles as part of buying and selling within the motor trade. Your motor trade policy allows you to legally use your trade-owned vehicles for activities such as transporting stock between locations, preparing cars for sale, or carrying out test drives with prospective buyers, provided the vehicles are owned by the policyholder and used strictly for motor trade purposes.

You may need a motor trade car insurance policy if you work in any of the following:

• Car dealer or sales trader
• Mechanic or body repair specialist
• Mobile valeter or detailer
• MOT tester or garage owner
• Vehicle delivery driver or recovery operator

Even part-time traders who buy and sell a few cars each month are expected to have suitable trade cover.

Types Of Motor Trade Car Insurance

There are two main types of motor trade cover: road risk insurance and combined policies.

• Road risk insurance protects you while driving customer vehicles on public roads. It’s ideal for smaller or mobile businesses that don’t have fixed premises. Levels of cover include third-party only, third-party fire and theft, or fully comprehensive options.
• Combined motor trade insurance offers more comprehensive protection. It can cover your premises, tools, equipment, stock, and even employers’ liability. For established garages or dealerships, this gives complete peace of mind that your assets and staff are protected.

Why Motor Trade Insurance Is Essential

Operating without the correct motor trade car insurance policy could leave your business legally vulnerable (e.g. resulting in prosecution for transporting vehicles while uninsured). More importantly, it exposes your business to severe financial risks. From accidental damage and theft to employee injuries or customer claims, the right policy safeguards you against unexpected costs. Beyond compliance, having proper cover reassures your customers that their vehicles are protected in your care. It shows professionalism and helps build trust in your service.

Protect Your Business With The Right Cover

Whether you’re just starting out or have years of experience in the trade, having the right motor trade car insurance is essential. It keeps your business compliant, protects your livelihood, and gives you the confidence to focus on what you do best.

To find out which policy suits your business, speak to the experts at Crowthorne. As members of the British Insurance Brokers’ Association (BIBA), we can help you choose the perfect level of cover to keep your business protected from every angle.

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