Motor trade insurance

Motor trade insurance can be used by a variety of different companies – find out if it's right for your business and what cover is included.

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What is motor trade insurance?

Motor trade insurance, also known as traders’ insurance, covers companies and their staff to drive or work on cars owned by customers or the company itself.

This type of policy should offer flexibility – like cover for all staff to drive a company or customer’s car, as well as protection for businesses like garages against damage to a customer’s vehicle while the mechanics are working on it.

Who is motor trade insurance for?

Motor trade insurance caters for a wide variety of businesses, including valet companies, repair shops, vehicle restoring businesses, second-hand dealers, recovery firms and repossession companies.

If your business repairs, services, valets, buys or sells cars for a profit, you need to take out motor trade insurance. If your company owns vehicles used by staff, you also need this type of cover.

It’s important to note that motor trade insurance isn’t only for businesses and employees – freelancers who have a responsibility for clients’ vehicles must also take out this cover.

Who are the best motor trade insurers?

This will depend on what you’re after, as policies tend to vary between providers. However, some of the main insurers offering motor trade insurance are:

  • Swinton insurance. Swinton has an entire department dedicated to insurance for traders. The company’s car insurance policy made it into our list of the best car insurance policies.
  • Ageas. One of the biggest companies offering motor trade insurance in the UK. You can read our review of its car insurance policy here.
  • Autonet Insurance Group. Autonet may not be very well known, but the company offers a wide range of business-focused insurance, including motor trade, commercial vehicle and fleet insurance, alongside standard home and car insurance policies.
  • Allianz. One of the largest general insurers in the UK, Allianz has the resources to provide cover to a wide variety of businesses – from small local garages to companies with an entire fleet of vehicles.
  • Tradex insurance services. Tradex is a specialist insurer, providing insurance policies exclusively to the motor trade sector. The company offers an extensive list of policies, including cover for mechanics, valets, car parks, car jockeys, accessory and windscreen fitters, and repossession agents. It also has a range of other options, like cover for taxis and commercial vehicles.

Do I need motor trade insurance?

This depends on your type of business. Motor trade companies, like mechanics, car dealers and vehicle valets, have a legal requirement to take this cover out (this includes freelancers). The minimum level required by law is third party cover, but taking out liability cover as well is recommended.

As well as taking out motor trade insurance, if you run a business in the motoring industry, you are legally required to supply relevant information to the Motor Insurance Database (MID). This is a database frequently used by the police and other authorities, which holds information connected to drivers and their insurance policies.

How many vehicles can be covered under it?

Fortunately, most motor trade insurance providers don’t set a limit on the number of cars that can be insured under one policy.

This makes sense, as this type of cover can be taken out by a company with a whole fleet of cars, as well as garages and valet services, who might have any number of cars under their care every day.

What vehicles can I drive with motor trade insurance?

Motor trade insurance providers are usually flexible as to which type of vehicles can be covered under the policy, as different companies will have different requirements. Some will impose certain exclusions, but you should be able to check this before you take out the policy.

That said, it is vital to note that you will only be covered to drive these vehicles as part of activities directly relating to your motor trading business. So, no matter how nice your customer’s car might be, you risk invalidating your entire policy if you choose to take it out for a Ferris Bueller’s Day Off style joyride.

Where can I get a quote for motor trade insurance?

As motor trade insurance is quite specialised, you are unlikely to find this option on popular price comparison sites. The best way to compare prices is to get a quote from each provider offering motor trade insurance separately.

You can find a few of the insurers offering this type of cover listed above.

How can I get cheaper motor trade insurance?

Insurance is always a very individual thing, affected by many personal factors. In the case of insurance for motors, this includes the type of vehicle covered, the level of cover required and the details of the driver. With motor trade insurance, there are the added elements of the type of business seeking cover, how many cars need to be covered and under what circumstances.

This means that the only way to determine how much motor trade insurance might cost you is to get a quote. The best way to find the cheapest option for you is to compare several providers.

An important thing to note though is that it’s worth looking at what is covered in the policy on offer, rather than just going with the cheapest option. Cheapest doesn’t always mean best, so make sure you consider the requirements of your business before committing to a policy.

Is my own car covered for trade?

Depending on the specifications of your cover, you might be able to drive your own car, as long as it’s associated with your business and is for motor trade purposes.

Some insurers do restrict certain types of vehicles, so make sure you read the small print.

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