Motor Trade Insurance
Compare motor trade insurance from UK providers in one place and find the right level of cover for your business.
- Tailored quotes from a panel of specialist insurance providers
- Policies for full and part-time traders
- Rated 4.8 out of 5 stars
How comparing works
Comparing quotes from a panel of specialist providers helps you find the right level of cover for your motor trade business without paying for products you do not need.Compare motor trade insurance in 3 steps
Complete the form
Tell us about your motor trade business, how long you have been trading and the cover you need.
Compare your quotes
Specialist insurers from the panel contact you to tailor your policy and talk through quotes over the phone.
Choose a policy
Take out cover with the insurance provider that suits your business.
What is motor trade insurance?
Motor trade insurance covers people and businesses that work in the automotive industry, including driving customer vehicles and business vehicles on the road, liability to employees, customers and the public, and optionally tools, equipment, stock and premises.
Anyone who works in the motor trade needs it. If you own the business or work for yourself, either as a sole trader or through a limited company, you need your own motor trade policy. If you work for a company, their insurance should cover you, but check before you start work.
Policies are available for a wide range of occupations, including car traders, car valeters, car transporters, breakdown and recovery providers, car restoration businesses, scrap yards and scrap metal dealers, car parking and car jockey services, tyre fitters, MOT stations and servicing garages, mechanics, part-time traders, start-up traders and home-working traders.
How much does motor trade insurance cost?
There is no single price. Motor trade insurance is a specialist type of cover that protects against a lot of eventualities and items, so it can be pricey, especially if you are new to the trade.
What you pay depends on the cover you choose (road risks, liability or combined), the type of vehicles you work on, how many vehicles and drivers you insure, the ages and driving records of your drivers, your voluntary excess, your no-claims bonus, your security measures and whether you pay annually or monthly. Specialist insurers on the panel can give expert advice on the right level of cover when you submit your details.
What does motor trade insurance cover?
Most motor trade policies are built from road risks cover, liability cover or a combination of the two.
Road risks insurance
Required by law if you drive customer or business vehicles on the road. Third-party only is the legal minimum and covers damage to other cars, property or people but not the car you are driving. Third-party, fire and theft adds cover for vehicles in your care, custody or control that are stolen or damaged by fire. Comprehensive adds cover for the car you are driving, whether it is a customer's or a business vehicle.
Liability insurance
Covers legal fees and compensation if you are sued by an employee, customer or member of the public. Employer's liability is legally required if you employ anyone. Public liability covers accidents to the public caused by your business, such as someone tripping on your forecourt. Product liability, which is not legally required, covers claims over a faulty product, such as a part you fitted that later fails.
Combined insurance
Road risks and liability wrapped into one policy, with the option to add cover for your tools, equipment and business premises. If you drive your work vehicle for personal journeys in the evenings and at weekends, you can add domestic use.
Parts only
Some providers offer cover for traders who never drive customers' cars. It can be cheaper, but you will not be covered even to move a vehicle.
How can I reduce the cost of motor trade insurance?
Motor trade policies can be expensive, but there are practical ways to keep the premium down.
Only pay for what you need
Remove any products your business does not need. For example, a mobile mechanic who never drives customers' or business vehicles on the road will not necessarily need road risks cover.
Specify the vehicles you work on
If you only work with standard vehicles, make sure you are not insured for 'any vehicle', which includes more expensive, specialist vehicles. Limiting the number of vehicles you insure can also help, as multi-vehicle cover may cost more.
Limit your drivers
Cover only the number of drivers you need rather than 'any driver', and where possible employ experienced drivers with clean records, as drivers under 25 can be more expensive to insure.
Consider a higher excess
A higher voluntary excess will reduce your premium, but it must be realistically affordable for the business.
Pay annually
Paying monthly may feel easier but is likely to make your premium more expensive. Pay annually if you can.
Build and transfer your no-claims bonus
Motor trade cover comes with a no-claims bonus, so build it up to reduce your premium year on year. Your personal driving no-claims bonus is taken into account, and some insurers will let you transfer it to your motor trade policy.
Improve security and compare every year
Upgrading CCTV, gates, locks and alarms could lower your cost. Most policies increase over time, so compare quotes rather than renewing with the same provider automatically.
What details do I need to get a quote?
Have these to hand before you start.
Your business type
The kind of motor trade work you do, so insurers can match you with suitable cover.
Years trading
How long you have been trading, including whether you are a start-up or part-time trader.
Trading address
Where the business operates from, including home-based businesses.
Proof of business
You will need to show that you own and run a relevant motor trade business.
What else can a motor trade policy cover?
Beyond road risks and liability, you can add optional cover to match your business.
- Material damage insures business assets up to a set amount, including parts and stock kept on the premises.
- Business premises cover protects your workplace building or forecourt. If you rent, check whether your landlord already provides this.
- Demonstration cover is for demonstration cars and customer test drives.
- Specialist vehicle cover is for heavy goods vehicles, vintage cars and exclusive vehicles.
- European cover lets you drive stock or customers' vehicles across the continent.
- Goods in transit cover protects goods you transport in trade vehicles as part of your business.
What is the Motor Insurance Database (MID)?
The MID is the nationwide record of all insured vehicles in the UK, used by the police and the DVLA to check and enforce motor insurance laws. Motor traders must register any vehicles used for work or personal use. When you buy a policy, your provider will contact you for the relevant data to update the database. Whenever a car comes into or leaves your business, tell your insurer as soon as possible so they can update the database for you.
Ready to get motor trade insurance quotes?
One short form, then specialist insurers come back to you with tailored quotes.
Frequently asked questions
Is motor trade insurance a legal requirement?
Yes. If you run a business in the motor trade you must have at least basic cover, and without it you are breaking the law. You can be fined thousands for each day you are not covered.
Does a motor trade policy cover me to drive any car?
Usually not. A motor trade policy normally only covers you to drive your own vehicles or customers' vehicles for motor trade purposes. You are most likely not covered to drive a family member's car, or to take a customer's car out for a spin that is not necessary for the work you are doing on it. If in doubt, check with your provider.
I run my business from home. Do I need motor trade insurance?
Yes, you are still required by law to have it. Road risks cover alone may be enough, rather than a combined policy, which also protects areas such as your contents, equipment and stock.
Can I get part-time traders cover?
Yes. If you have another job or are retired while running a part-time motor trade business, part-time cover can be arranged. It makes allowance for your reduced hours, which may help reduce the cost of your policy.
Is there a minimum age for motor trade insurance?
There is no official minimum age, but you need to be old enough to drive. Some insurance providers set a minimum age of 21 or even 25. If you need cover for people under 25, quotes from several motor trade specialists increase your chances of finding a suitable policy.
Who can I ask about the type of cover I need?
When you submit the quote form, specialist insurance providers from the panel will contact you. They can offer no-obligation advice and assistance while providing tailored policy quotations.
Do I need employer's liability insurance?
Yes, if you employ anyone. Employer's liability is legally required and typically covers legal fees and compensation if an employee is injured at work.
Does my work still need road risks cover if I never drive customers' cars?
Not necessarily. Some providers offer parts-only cover for traders who do not drive customers' vehicles, and it may be cheaper. Be aware that you will not be covered even to move a vehicle.
Motor Trade Insurance for your situation
Other pages that may fit your business, and guides on this topic.
Written by Michael Foote, Insurance & Finance Expert
Founder of Quote Goat, with over 20 years' experience in finance and insurance. He has appeared on TV and in Forbes, The Telegraph and The Metro.
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