If you’re new to the motor trade, figuring out what type of insurance you need can be a daunting task. There’s lots to consider when it comes to what type of cover you need, and the right policy can look very different from one business to the next. There’s no one-size-fits-all to motor trade insurance, but it’s important to get the right cover – not only because it’s a legal requirement – but because it protects your business.
Whether you’re new to the motor trade space or you’ve been trading for years and need a quick refresher, we’re here to guide you through the fundamentals of motor trade insurance.
What is motor trade insurance?
Motor trade insurance is designed to cover businesses that work with vehicles, including:
- Vehicle Sales – Car dealerships, second-hand traders, and auction houses.
- Repairs & Servicing – Mechanics, body shops, and mobile repair services.
- Valeting & Detailing – Professional car cleaning and detailing businesses.
- Recovery & Transportation – Breakdown recovery and vehicle delivery services.
If you’re running a motor trade business, you legally need motor trade insurance to keep you covered, even if you only work part-time or from home/on the road.
Types of motor trade insurance
There are two main types of motor trade insurance: road risk insurance and combined motor trade insurance.
Road risk insurance
At the very least, most motor trade businesses will need road risk insurance. It covers you to drive any vehicles related to your business, including customer vehicles in your possession, on public roads.
There are three levels of cover for road risk insurance:
- Third party only (TPO) – this is the lowest level of cover available. It covers you if you cause damage to someone else’s vehicle or injure a third party in a fault accident.
- Third party, fire & theft (TPFT) – this includes everything in TPO and also covers you if the vehicles you own are stolen or damaged by fire.
- Comprehensive – this can cover you in most accident scenarios, and also covers damage to your own vehicles. It’s the highest level of cover you can take out for road risk insurance, and it’s generally recommended for the most protection.
Combined motor trade insurance
Combined motor trade insurance brings multiple types of motor trade cover into one policy. It includes road risk protection, and can also cover:
- Buildings
- Contents
- Tools
- Equipment
- Employers’ liability
- Public liability
- Stock of vehicles
- Business interruption
Typically, road risk policies are most suitable for businesses trading from home or on the road, and combined motor trade policies are most suitable for those trading from a premises.
What cover do I need?
The cover that you need will depend on the nature of your business. At a minimum, you’re legally required to have road risk insurance to protect you when driving vehicles related to your work. Other policies can be optional, but some may be legally required; for example, you’ll need employers’ liability cover if you employ any staff.
If you’re unsure about which cover is right for you, it’s always best to speak with an expert. Our friendly team is available on 0333 015 6886 from 9am-5pm Monday to Friday to answer any motor trade queries you might have.
How much does motor trade insurance cost?
The cost of motor trade insurance can vary significantly because every motor trade business is different. A trader who fits tyres and windscreens on the road will not have the same policy as a dealer who sells cars from a showroom.
It depends on a variety of factors, including:
- The type of business you run and the type of vehicles you work with/on.
- Whether you operate from business premises.
- If you employ staff.
- Your claims history and the claims histories of anyone you employ.
How to get cheaper motor trade insurance
Depending on the insurance provider, you may be able to lower your premiums by taking steps such as:
- Securely storing your stock and equipment and deploying extra security measures (such as CCTV).
- Building your no-claims discount.
- Limiting the number of employees on your policy.
- Paying for your premium annually instead of monthly to avoid paying interest.
Getting a motor trade insurance quote
If you’re just starting out in the motor trade, knowing what cover you need can be difficult as there’s so many coverage options to choose from. Even if you’ve been trading for years, it can be hard to know if you’re getting the best deal.
That’s where we come in. As an independent, family-owned insurance broker specialising in commercial motor insurance, we make it easier for motor trade businesses to find the right cover. We compare quotes from some of the UK’s leading motor trade insurers to find competitive quotes for our customers.
Getting a quote with us is easy – just fill out our quote form or speak to our friendly team on 0333 015 6886 and we’ll compare quotes from our panel to find the right policy for you, at our best price.
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