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Who needs motor trade insurance?

In short, anyone who is involved in the motor trade in any capacity from buying and selling to mending or cleaning requires the appropriate level of motor trade insurance to protect both themselves and their customer in the event of an issue. It doesn’t matter what sort of premises you have or what hours you work any individual who works in any motor-associated jobs should ensure they have cover in place.

Motor trade insurance is essential for any business involved in working with vehicles, whether you’re:

  • Buying and selling vehicles
  • Repairing and servicing
  • Valeting and cleaning
  • Moving or transporting vehicles
  • Fitting parts and accessories

This specialised insurance is required regardless of:

  • Your business size
  • Working hours (full-time or part-time)
  • Business location (home-based or commercial premises)
  • Number of employees
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What Is a motor trade insurance policy?

Motor trade insurance is there to cover you, and your staff, to look after all the vehicles that are under the care of your business. You can put specific drivers on your policy, or use ‘any driver’ options to cover anyone in your business to drive without being specifically named on the policy. It’s very important to note though, that even if you have ‘any driver’ cover, you may still need to notify an insurer of certain named drivers. Please check with your insurance provider directly, or read your policy documentation, to know when this is necessary.

Your motor traders’ insurance policy can also cover you for more than just business needs. You can get cover for social, domestic and pleasure purposes too. But it’s important to understand that traders’ insurance is not an ‘any vehicle’ insurance policy for all your personal vehicles. The vehicles you own outside of your business should still have their own private motor insurance. Motor trade insurance covers your business’ needs, and it shouldn’t be used to get cover for vehicle uses outside of that. This is specialist insurance for genuine businesses working within the motor trade industry.

Who needs business motor trade insurance Image

Who needs business motor trade insurance?

The term motor trade insurance or traders insurance is the name given to the category of insurance policy the is recommended for those individuals who work in the motor industry.

This includes, but is not limited to:

  • Traders (buying/selling vehicles for profit)
  • Mechanics (mobile and garage-based)
  • Valeters (vehicle cleaning)
  • Car jockeys (vehicle relocation)
  • Vehicle recovery agents
  • Accessory fitting
  • Mechanical repair
  • Vehicle electrician
  • Body repairs
  • Import/export
  • Breakdown/recovery
  • MOT preparation/testing
  • Vehicle sales
  • Vehicle demonstrations
  • Vehicle servicing
  • Car detailing
  • Tyre fitting/sales
  • Vehicle collection/delivery
  • Windscreen repair

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Your options in motor trade insurance

This is the meat and potatoes of your motor trade insurance policy. You need to know how your policy covers your business, and the choices you have to extend your insurance cover. Breaking it down, these are the options available for you:

Road Risks

This is the minimum level cover you’ll need in a traders’ insurance policy. It provides cover for you and your staff to be able to work on and/or transport customer vehicles as required. Just like your private motor insurance, you can choose from three levels of cover:

  • Third party only (TPO)which covers only the minimum of third party damage.
  • Third party, fire and theft (TPFT) – which is TPO cover but with fire, theft, and criminal damage included.
  • Comprehensive – which ensures cover for all the above, as well as personal effects cover, windscreen damage, medical costs, and accidental damage.

Combined Motor Trade Insurance

Combined traders’ insurance is true peace of mind. It’s a type of cover that enables you to protect every part of your business. So, as well as covering your company and customer vehicles, it also covers your premises, tools, stock and cash as well.

Part-Time Motor Trade Insurance

If you work in the motor trade on a part-time basis, then you can get a flexible policy that covers you only for the period of time that you need.

Parts Only

This cover will offer you insurance only for parts and will not cover any of your vehicles on the road.

Ian Beevis Insurance Expert

Additional cover options for your motor trade business

Your motor trade insurance may include some extras as part of the standard package, while others might come at an additional cost or may not be available from your insurance provider at all.The cover you need depends on your business type, so it’s worth reviewing your options carefully. Make sure you’re not paying for extras that you don’t need or are already covered under another policy.

Here are some of the optional extras that may be available with a motor trade insurance policy:

Legal Protection

– Covers legal costs if you are involved in a dispute or face legal proceedings related to your business activities.

Tools Cover

– Protects tools and equipment essential to your work against theft or accidental damage.

Breakdown Insurance

– Provides assistance in the event of a vehicle breakdown, including roadside recovery and repairs.

Excess Protection

– Helps cover the excess payable on your insurance policy in the event of a claim.

Employers’ Liability Insurance

– A legal requirement for businesses with employees, covering any claims from employees for work-related injury or illness.

Public Liability Insurance

– Protects you if a member of the public makes a claim for injury or property damage resulting from your business operations.

Premises Cover

– Protects your business premises, including the building and its contents, from risks such as fire, theft, and damage.

Cover for Driving in Europe

– Provides insurance coverage if you need to drive vehicles across Europe as part of your business operations.

Personal Accident and Sickness Insurance

– Provides financial support if you are unable to work due to injury or illness.

Haulage and Carriage of Goods Insurance

– Covers goods you are transporting as part of your motor trade business, protecting against loss or damage.

Business Interruption Insurance

– Offers financial protection to cover lost income if your business operations are disrupted by an unforeseen event.

Business Stock / Asset Cover

– Protects stock and assets held at your business premises or while in transit from theft or damage.

Trailer Cover

– Provides insurance cover for trailers used as part of your motor trade activities.

Product Liability (Sales and Service Indemnity)

– Covers you in the event that a part you supplied or fitted is faulty, or if an issue arises with work carried out on a customer’s vehicle.

Goods in Transit Cover

– Protects items being transported, covering loss, damage, or theft while in transit.

Ready to get covered?

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Money saving tips for your motor trade insurance

Now, for the juicy part. You want to know how to save yourself some extra cash when taking out a traders’ insurance policy. Well, you’re already on our website, so you’ve made a good start!

But as well as using Clean Green Compare, there are other ways to help save you money:

1

Hire experienced, safe drivers

Having experienced employees is crucial for your business – younger drivers or those with a history of infractions may increase your premium. Drivers without penalty points can help reduce the cost of your motor trade insurance, as younger drivers or those with a history of infractions may increase your premium.
2

Secure your premises

Keeping your premises safe and secure helps reduce the risk of theft and vandalism. Improved security could lead to lower insurance premiums as well.
3

Increase excesses

Opting for a higher excess can lower your premium. Consider increasing your standard excess with an additional voluntary excess to reduce costs.
4

Pay annually, not monthly

Annual policies are generally more cost-effective than monthly payments. Paying for your insurance in one lump sum could lead to a discounted premium.
5

Be mindful of add-ons

Some add-ons may be unnecessary for your motor trade needs. Check carefully before purchasing to avoid paying for unwanted extras.
6

Shop around at renewal

Allowing a policy to auto-renew is convenient but can be costly. Insurance premiums often increase upon renewal, so it’s worth comparing quotes to find a better deal.
7

Standard vehicle cover

Some “any vehicle” policies may cover higher-risk vehicles such as classic cars or high-value vehicles. Ensure you are not paying extra for cover you do not need if you only require standard vehicle cover.
8

Modifications

Vehicle modifications can increase your premium. Ask yourself if a modification is truly necessary, as avoiding them could help you save on insurance costs.

Businesses that need motor trade insurance


Vehicle Sales

Complete cover for buying and selling vehicles, whether working full or part time, including stock protection, premises cover, and demonstration insurance for test drives with potential customers.
Learn more about vehicle sales insurance →


Mechanics & Repairs

Essential cover for diagnostics, repairs, and customer vehicle handling, including cover for tools, equipment, parts liability, and test drives after repairs.
Find out about mechanics insurance →


Body Shops

Specialist insurance for repair facilities covering machinery, paint booths, customer vehicles, courtesy cars, and protection for all repair and restoration work undertaken.
Explore body shop insurance cover →


Vehicle Recovery

Comprehensive cover for recovery vehicles, transported vehicles, roadside operations, and storage facilities, plus protection for both operators and office staff.
Recovery operator insurance details →


Tyre Fitters

Specific cover for moving customer vehicles, lifting equipment, ramps, parts installation, and public liability while working on vehicles.
Tyre fitter insurance options →


Valeters

Protection for handling customer vehicles, cleaning equipment, chemical usage, and accidental damage during cleaning and detailing services.
Valeting insurance information →


Mobile Mechanics

Tailored insurance covering your own vehicle, portable tools and equipment, diagnostic work, and public liability while working at customer locations.
Mobile mechanic insurance guide →


Car Jockeys

Specialised cover for moving and storing customer vehicles, including premises protection and public liability for vehicle transportation between locations.
Car jockey insurance details →

Motor Trade Insurance FAQs

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 NCBs when taking out a motor trade policy.

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.