In this article on motor trade insurance, we examine:
- What motor trade insurance is
- The cost of motor trade insurance
- Who can get motor trade insurance
What is a motor trade policy?
Motor trade insurance covers the needs of businesses which offer a money-making service related to vehicles. This ranges from garages which repairs cars to those offering valeting services. The size and location of the business and your degree of involvement (whether full- or part-time) is irrelevant.
It is illegal to drive on UK roads without some form of vehicle insurance in case of an accident. However, vehicle-related businesses can’t be covered by private motor insurance because these policies specify both a named vehicle and a named driver. Therefore, motor trade insurance allows the designated driver to drive any vehicle as long as it’s for the needs of the business.
How much does a motor trade policy cost?
It is impossible to give a figure for the size of premiums. Insurers will take into account a number of factors to draw up a tailor-made policy and calculate the cost of your premiums. These factors include both your personal circumstances and your type of business as well as the amount of cover you require.
Before giving you a quote, insurers will need to know some personal details about you such as:
- Age, location, whether you work part/full-time, your work experience, the size/location of business premises (if any), etc.
- Your driving history such as whether you have a clean driver’s licence and whether you have any convictions in the past 5 years
- Your insurance history and if you have a no-claims bonus
Amount of policy cover
You can specify how much road risk cover you take out and the policies are the same as those for private car insurance:
- Third party
- Third party, fire and theft
Apart from the amount of cover you have for vehicles, you are legally required to take out public liability insurance if you are running a business. This could include:
- Public liability insurance – this is compulsory if you have a showroom, garage, etc. which is regularly visited by members of public (in case of an accident)
- Employee liability insurance – this is mandatory if you employ someone else in the event they suffer a work-related injury/accident on your business premises
- Product, sales & service indemnity in case of defective workmanship and/or faulty parts
Combining insurance policies
Many insurers will allow you to combine your road risk cover with your public liability policy to create a combined insurance policy. Not only can this work out cheaper, but you can also add extra cover for the loss, damage or theft of your business premises and/or tools.
Further reading: Get cheap car insurance in 2020
Motor trade policy questions
Motor trade policies are unlike standard vehicle insurance policies as they are designed to provide cover for professionals who are in the business of buying, selling, repairing, or otherwise making money from vehicles. Motor trade policies apply to both individual traders and large companies who specialise in this business.
You can generally drive a car that’s on motor trade insurance, however there must be a clear relationship of that car to your business and business purpose. Not all cars will be covered by this type of insurance, so it is important to find the a cheap car insurance policy that fits your individual and professional needs.
The minimum age to take out a motor trade policy is generally 25 years old. There are more specialised insurance companies that may offer insurance to individuals younger than 25 years old, however this is typically offered at a much higher rate. For individuals you can find our here how to save money on car insurance.
Can anyone get a motor trade policy?
This type of car insurance isn’t a way to get cheapest insurance for your and your family’s vehicles as a group policy. In order to qualify for a policy, you have to be able to prove to the insurance company that you offer a vehicle-related service which is a money-making venture even if you work part-time fixing up cars or motorbikes. You will, therefore, need to supply evidence such as invoices, receipts and/or tax documents.