People develop a passion for cars and the motor trade is full of professionals who love what they do and have made a career out of it.
Young car enthusiasts are often attracted to the trade – whether it’s buying and selling vehicles or repairing and servicing them.
Many can’t wait to start and there is no minimum age for entering the motor trade. But drivers under 25 are statistically more likely to be involved in more accidents and pose a higher risk for insurers, which makes getting motor trade insurance difficult — and expensive — for young people.
Right cover
Having the right cover is essential for any business and whatever role you play or whatever the size of the garage or dealership, the golden rule is never to sell or service a car without the correct motor trade insurance in place.
If anything goes wrong — whether it is an accident involving a customer’s car, damage to a vehicle you want to sell, or a fault you are responsible for fixing — the right cover will ensure a vehicle can be repaired or replaced without a hefty bill eating into business profits.
Calculating the risk
Young drivers know their limited experience is reflected in higher insurance premiums.
As a young motor trader, there is more risk than just driving your own car and a lack of experience makes moving from one vehicle to another challenging, especially with different types of cars, engine sizes and transmissions.
Motor traders also spend more time on the road than private motorists, which further increases the risk.
Combining these factors, motor trade insurance is available for those under 25 who want a career in the industry — but not many insurers offer it and it isn’t cheap.
Many motor trade insurers won’t offer cover for 18 to 21-year-olds and some may introduce restrictions on the insurance they provide, such as only offering basic cover.
Most insurers will only offer cover to under-21s who work in servicing or repairing vehicles and will not consider traders’ cover until they reach 23.
Patons Insurance does insure motor traders from as young as 17 on certain policies such as combined policies and business use only.*
Driving down costs
Young motor traders should expect to pay higher premiums than those who have been in the business for a number of years, but there are steps they can take to help keep premiums affordable.
Insurers reward clean driving records with reduced motor trade insurance premiums, so avoiding speeding fines and motoring offences is a key first step.
For those wanting to sell vehicles, stick to less-expensive family cars with lower-powered engines. By reducing the cost of replacement and repairs, you are reducing the risk to your insurer, which can help bring down the cost of premiums.
And reducing your driving time in unfamiliar vehicles also helps reduce the risk.
Including a higher excess is another way to help keep premiums down, and extra training such as advanced driving courses can also help.
Worth the wait
Setting up your own car dealership under the age of 25 is likely to be cost prohibitive, even if you can find an insurer willing to take on the risk.
Ultimately, policies must be tailored to the needs — and risks — of younger drivers aged 18 to 25 to help them embark on their motor trade career.
Those that do offer cover to young motor traders want them to have held a clean, full driving licence for at least a year.
The advice for young people entering the motor trade is to gain experience working in a garage or sales role before setting up on their own when they can enjoy the benefits of lower premiums.
*subject to criteria.
