What is Motor Trade Insurance?
Running a business that repairs, sells, moves, or works with vehicles? Standard insurance won’t cover you for everything. Motor trade insurance – also known as traders insurance or motor traders insurance – is specialist business cover designed for people in the motor industry who need to drive, store, repair, or handle vehicles they don’t own.
Whether you run a garage, work as a mobile mechanic, sell cars, provide valet or collection services, or operate any business that takes responsibility for customer vehicles, you’ll need a policy that keeps your business legal and protected. Unlike standard car or van insurance, a motor trade insurance policy is built to cover you, your staff, your premises, and your customers’ vehicles—helping you avoid expensive mistakes, stay compliant, and keep your business running smoothly.
What the experts say…
"Whether you’re a full-time dealer, mobile mechanic, or specialist repairer, having the right motor trade insurance isn’t just about ticking a legal box – it’s about protecting your business, your customers, and your peace of mind. Take the time to review your risks and tailor your cover to how you really work – the right policy can make all the difference if something goes wrong."
– Ian Beevis, Founder of Clean Green Compare
What Does Motor Trade Insurance Cover?
A standard motor trade insurance policy usually includes the essentials your business needs to trade legally and protect against day-to-day risks. What’s included can vary by provider and policy, so always check the details when you get a quote.
- Road risks insurance: – Lets you drive, move, or test vehicles you don’t own for business purposes.
- Premises and asset cover: – Protects your workshop, showroom, vehicle stock, tools, and equipment against fire, theft, or damage.
- Public liability insurance: – Covers you if a customer or member of the public is accidentally injured or their property is damaged because of your work.
- Employers’ liability: – A legal requirement if you employ anyone; covers claims from staff injured at work.
- Product liability: – Covers claims if something you fit or supply causes injury or damage after the customer leaves.
These core features form the foundation of most motor trade insurance policies, helping you run your business safely and with confidence. For extra peace of mind or specialist needs, there are a range of optional add-ons available too.
Motor Trade Insurance Popular Add-ons and Extras
Depending on how you work, you may want to add extra cover to your policy. These popular add-ons aren’t always included as standard and come at an additional cost, but they can offer valuable protection for your tools, business continuity, or legal risks.
Roadside assistance and recovery if your business or a customer vehicle breaks down.
Protects your vital tools, diagnostic devices, and specialist equipment against theft, loss, or damage.
Covers legal fees for defending your business in court, handling disputes, or employment issues.
Offers a replacement vehicle for your customers if theirs is off the road due to repairs.
Extends your cover when you need to drive vehicles outside the UK.
Insures against loss or theft of business cash or customer keys.
Provides financial support if you or a staff member is injured at work.
Covers vehicles, parts, or tools while being transported for your business.
Helps with lost income and ongoing costs if you can’t trade due to an insured event like fire or major theft.
Motor Trade Insurance - What’s Not Covered?
Every policy comes with exclusions (always read your policy documents and double-check any trade-specific exclusios). Typical things not covered include:
- Personal use of vehicles: – Unless specifically added, you can’t use trade-insured vehicles for personal trips.
- Unlisted drivers: – Only named staff are covered to drive vehicles for work.
- Motorsport or racing: – No cover for time trials, racing, or competitive events.
- Deliberate or criminal acts: – No protection for intentional damage or illegal activity.
- Unattended, unlocked vehicles: – Claims may be rejected if security isn’t followed.
- Vehicles above value or performance limits: – Check your documents for any exclusions on luxury, classic, or modified cars.
Who Needs Motor Traders Insurance?
Motor trade insurance isn’t just for big dealerships – if you work with, move, or look after vehicles you don’t own as part of your business, you’ll likely need this specialist cover. Here are some of the most common trades and businesses that benefit from motor traders insurance:
- Service and repair garages: – MOT garages, commercial vehicle repairers, mobile mechanics, and HGV mechanics.
- Car and van sales: – Part-time traders, start-ups, and established dealers.
- Valeting and parking: – Valeters and car park jockeys at hotels, events, or airports.
- Breakdown and recovery: – Vehicle recovery agents and breakdown firms.
- Tyre, accessory, and tuning: – Tyre fitters, accessory fitters, and performance tuning workshops.
- Specialist trades: – Classic car restorers, vehicle dismantlers, and importers.
- Fleets and multi-vehicle: – Motor trade fleets and businesses with multiple drivers.
- Other motor trades: – Road risk only traders, young motor traders, or those with convictions.
If your business ever takes responsibility for vehicles you don’t own, motor traders insurance is essential.
Get Motor Trade Insurance Quotes Today
How to Get a Motor Trade Insurance Quote
Getting a motor trade insurance quote is quick and straightforward. Here’s what to expect and how to make the process as smooth as possible:
How Much Does Motor Trade Insurance Cost?
The price of motor traders insurance depends on your business size, location, claims history, the vehicles you handle, and the cover you select. Insurers will also look at your security measures, driver records, and any extras you add.
- Number of drivers: – More named drivers, especially younger or less experienced staff, can mean a higher premium.
- Business location: – Operating in city centres or high-risk areas often increases insurance costs.
- Types and value of vehicles: – Covering high-value, luxury, or specialist vehicles may cost more than standard cars or vans.
- Claims and driving history: – A clean record helps keep your premium lower; previous claims or convictions can push it up.
- Level of cover: – Third party is typically the cheapest, while comprehensive cover provides more protection but can cost more.
- Extras and security: – Adding legal expenses, tools cover, or other extras increases your premium, but good security (like locked compounds and alarms) can help bring it down.
- Payment method: – Paying annually usually works out cheaper than monthly instalments, which may have interest or admin fees.
The best way to get an accurate price is to compare quotes tailored to your business and only pay for the cover you need.
Ways to Save on Your Motor Traders Insurance
Want to keep your motor trade insurance costs down? Here are some practical tips and smart moves that could help you save money – without cutting back on the cover your business needs.
A few small changes can make a big difference to your business costs – without leaving you short on protection.
Motor Trade Insurance FAQ
What’s the difference between motor trade insurance and standard car insurance?
Standard car insurance only covers you for driving vehicles you own, usually for personal use or commuting. Motor trade insurance is specially designed for businesses that work with, move, or repair vehicles they don’t own—like garages, car dealers, or valets. It protects you, your staff, and your customers’ vehicles whenever you’re driving or handling them as part of your business.
Is public liability included in a motor trade policy?
Public liability is often available as an add-on to a motor trade insurance policy. It’s highly recommended if customers visit your premises or if your work could accidentally cause injury or property damage to others. Always check your policy details or ask your provider what’s included as standard.
Does motor trade insurance cover theft or damage to customer vehicles?
Yes, most comprehensive motor trade policies cover theft or accidental damage to customer vehicles while they’re in your care, custody, or control. Levels of cover may vary, so it’s important to check your documents to see exactly what’s included and what security requirements must be met for claims to be paid.
How do I keep my motor trade insurance costs down?
You can often lower your premium by only adding drivers and vehicles you really need, building up a no-claims bonus, improving security on your premises, paying annually instead of monthly, and shopping around for quotes before you renew each year. Review your policy regularly to make sure you’re not paying for extras you don’t need.
What is the Motor Insurance Database
Opting for a higher level of cover means you can protect both your own vehicles and those belonging to your customers, giving you peace of mind against risks that may arise while driving on public roads. This type of policy also gives you the ability to add and remove vehicles from the Motor Insurance Database (MID), helping you to ensure you’re always compliant with legal requirements.
Am I eligible for motor traders insurance?
To be eligible for motor traders insurance, you must:
- Hold a full UK driver’s licence
- Be at least 23 years old
- Prove you work in the motor trade
Can I get cover for my motor trade premises?
Yes, combined policies can include cover for your premises, tools, stock, and cash.
How do I get trade plates?
You can apply for trade plates through the DVLA.
What information do I need to provide to take out a motor trade policy?
You need to provide accurate information about your business, such as the type of business, employees, and premises. Additionally, you’ll need to provide your driving licence and proof of trading.
Can I drive my own vehicle on a traders insurance policy?
Most motor trade policies allow you to drive your own vehicles and those in your possession for motor trade purposes. Some restrictions may apply based on the type of vehicle.
I just fix cars at home – do I need motor trade insurance?
If you repair other people’s vehicles for profit, you will need motor trade insurance.
When do I need to notify my motor trade insurance provider of new vehicles?
You must notify your insurance provider immediately for any vehicles in your possession for more than 14 days.
Does it cost more to add another driver to a motor trade insurance policy?
Yes, adding more drivers increases risk, so your premium will be higher.
Can I add employees to a motor trade insurance policy?
Yes, employees can be included in your policy.
I only work in the motor trade part-time. Can I still get a policy?
Yes, most providers offer part-time motor trade insurance policies.
Can I use a private NCB with motor trade insurance?
Yes, most providers allow you to use private or commercial no claims bonuses when taking out a motor trade policy from private car insurance or personal car insurance.
What types of liability insurance are available under a motor trade policy?
The two main types are public liability insurance and employers’ liability insurance. Employers’ liability insurance is legally required if you have employees, while public liability insurance is recommended but not mandatory.
Is proof of trading (POT) always required for motor trade insurance?
Yes, proof of trading is required when taking out a policy and for claims. Keep it readily available. Once your business is set up Insurance for startup motor traders is available from some insurers
Do I need to declare convictions under a motor trade policy?
If convictions are spent under the Rehabilitation of Offenders Act, you don’t need to declare them. Unspent convictions must be disclosed. Motor trade insurance for drivers with motor convictions is available from some insurers.
What if I want to cancel my motor trade policy before it ends?
You may cancel your policy early, but cancellation fees may apply. Insurance documents must be returned.
How long until I receive my motor trade insurance documents?
Policy details are emailed immediately after your first payment. Physical documents are usually sent within 2-3 days.
What if I want to increase my motor trade insurance coverage mid-term?
You can typically adjust your coverage mid-term by contacting your provider.
How can I pay for my motor trade insurance?
Most providers offer annual upfront payments or monthly direct debit options. Paying upfront often reduces overall costs.
Are there exceptions to vehicle types covered under a motor trade policy?
Coverage varies by provider. Common vehicles are usually covered, but high-end, imported, or rare vehicles may require special approval.
Can lease/hire purchase vehicles be covered under a motor trade policy?
Yes, vehicles on lease or hire purchase for over 6 months are typically eligible for coverage.
Can I drive vehicles without valid MOT/road tax under a motor trade policy?
Vehicles must have a valid MOT unless driven to a pre-booked MOT appointment. Vehicles without road tax can only be driven with valid trade plates.
Are luxury and sports vehicles covered under a motor trade policy?
Coverage depends on the provider. Some consider high-end vehicles too risky, so contact your provider with details to confirm coverage.
Is this service free and independent?
Yes. Clean Green Compare is completely free for you to use – we never charge you to compare insurance or request quotes. We don’t sell insurance policies ourselves or recommend specific products. Instead, we introduce you to a trusted comparison service or a specialist insurance provider. This means you can view quotes and options from FCA-regulated insurers, so you can choose the cover that suits your business, with no pressure or bias from us.
