Motor Trade Insurance

Motor Trade Insurance

A motor trade insurance policy is much needed by those who are in a motor trade business. Whether you are selling cars & other vehicles or are into a car repairing & servicing business, you may need to count on motor trade insurance coverage. This form of insurance might even be useful for those involved in valeting or a MOT centre or a garage. The coverage may be needed whether you are working part time or full time.  The article here shares some valuable insights on motor trade insurance.

First of all, let’s start with the various policies covered by motor trade insurance.

Third party only

This is the very basic motor trade insurance policy you can have and it could cover damage caused to a 3rd party car vehicle. You may require it if you –

  • Service, restore or repair vehicles
  • You work as vehicle fitter or valet or mobile tuner
  • Run a garage or MOT center
  • Sell or buy cars for profit
  • Drive your own car or customer’s car on public roadway & have any of them on business campus or at the home address of the customer.

Any driver named on this policy is allowed to steer any car pertinent to your motor trade & may be covered for any damage to other party’s car.

3rd party fire & Theft

This motor trade insurance policy may offer coverage for the clause mentioned in the previous point along with coverage for theft and fire. This is for the vehicles under the control of a motor trader.


This is a the most motor trade insurance cover and as the name suggests, extends coverage for a number of things. Such a policy tends to include all the clauses mentioned in the first two points and can also include accidental damage coverage for any vehicle- that is under the custody or control of a motor trader.

For example-say you are out test driving your customer’s vehicle before purchasing it & you somehow end up causing an accident. If you have taken a comprehensive motor trade insurance cover, your insurer may help take care of the cost of repairs to be done on the customer’s car.

Motor trade liability insurance coverage

It includes employer’s liability, public liability as well as sales & service indemnity coverage. With the employer’s liability coverage, you can be protected in case any of your staff members gets injured while working for you. The public liability insurance can often help take care of the compensation costs on your behalf in case anybody is harmed or any property is damaged from your business activities. The sales and service indemnity coverage would protect you in case you have to pay the compensation for any accidental damage or injury to a property given – purchase or sale of vehicles, supply or sale of products linked to your motor trade as well as alteration, inspection, maintenance, testing, repair, cleaning or servicing of vehicles.

Combined insurance

A combined motor trade insurance policy often covers money, premises, vehicles, tools, contents & liabilities. In fact, if you are looking for cover for your entire business a combined coverage could be the answer for you. These policies often even apply to those motor traders who operate from home.

Factors to consider while taking the insurance

There are different factors to consider while you are going for your motor trade insurance policy.

Review business activities

You must understand that the major aspects of your motor trade- like number of cars and other vehicles, the drivers, turnover & general business operations- all cast a tremendous impact while deciding the insurance premium. Thus, before you finalise the insurance deal, you should consider these factors thoroughly.

Among all the factors mentioned, your vehicles and drivers are the most important.

  • Vehicles- The different forms of vehicles involved in your motor trade would influence the insurance premiums. The motor traders who work with high performance vehicles, HGV steams, imported wheels, kit cars & motorcycles are generally charged higher premiums. If you stop working with these sorts of high profile vehicles in future, you must inform your insurance providers.
  • Drivers- The number of drivers you are planning to include in your policy would also determine the cost of your premiums. It’s to note here that insurance companies often prefer mature drivers with safe driving records and would readily extend lower rates if your drivers pose less risk. You might be charged higher insurance rate if you have drivers below 25 years of age.

Premium payment mode

Another major factor that could effeect your motor trade insurance policy is your payment mode. It’s to stress here that some insurance providers impose a charge if you decide to pay through monthly installments. You can often come up with a cheaper rate if you can afford to pay upfront.

Your motor trading activity

Your business activities could affect the trade insurance premium too. Insurers are flexible to offer slashed rates for people involved in repair trades like MOT preparation, servicing & body work. There are motor trade businesses that are deemed as comparatively hazardous for the insurance providers and hence are subjected to higher premiums. These include motor trade businesses involved in vehicle salvage & dismantling or vehicle breakdown. If your work involves dealing with prestige or performance vehicles, you may have to pay higher premiums.

Package trade coverage

You may result in a reduced rate if you are ready to take up a combined package motor trade insurance cover.

Finally, it should be said that always be careful to compare various policies before you buy your insurance deal.