Motor Trade Insurance from £55/month

Motor traders usually consider road risk cover for any-driver use of own and customer vehicles, custody-and-control for cars left for repair or sale, employers' liability where staff are on the books, and premises cover where there is a site. Declare demonstration, delivery, trade plate and recovery use separately — a road-risk-only policy rarely covers everything you do.

Cover this trade usually needs

Cover	Why it matters	Typical limit
Motor trade road risk	Third-party, fire and theft or comprehensive cover for vehicles used in connection with the trade	RTA minimum for liability; comprehensive for own vehicle value
Customers' vehicles (custody and control)	Damage to cars left with you for repair, sale, valet or storage	Highest value vehicle ever held, not an average
Premises, stock and contents	Buildings, forecourt stock, workshop equipment and office contents	Peak stock value including part-exchanges and auction vehicles in transit
Employers' liability	Injury or illness claims from employees, apprentices and labour-only subcontractors	At least £5m — compulsory under the EL Act 1969
Public and products liability	Third-party injury or property damage, and defects in vehicles sold or work carried out	£2m–£10m depending on dealer agreements

Key risks

• A test drive ends in an at-fault collision in a high-value demonstrator.
• A customer's car is damaged by fire in the workshop while awaiting repair.
• A faulty repair causes a loss of control and injury weeks later.
• Forecourt stock is stolen or vandalised overnight.
• A trade plate is used on a vehicle the policy does not cover.

Regulations and licences

• The Road Traffic Act 1988 sets the minimum motor insurance requirement for any vehicle used on a road.
• Trade licences (trade plates) are issued by DVLA and have their own permitted-use rules.
• The Consumer Rights Act 2015 governs sales of vehicles to consumers and sits behind many "faulty car sold" claims.
• The Employers' Liability (Compulsory Insurance) Act 1969 requires EL cover for any employee.

What we check before quoting

• Trade activities in full: sales, servicing, MOT, body shop, valet, recovery, mobile mechanic.
• Who drives — named drivers only, any driver 25+ or full any-driver — and licence/claims history for each.
• Highest single vehicle value handled and peak stock on site.
• Premises security: alarm, CCTV, fencing, gated forecourt, night storage.
• Volume of consumer vs trade sales and any dealer-group or warranty obligations.

Gaps we see most often

• Road risk only policy with no cover for customers' vehicles in your care.
• Demonstration or delivery of sold cars outside the stated use.
• Stock sub-limit lower than the actual forecourt value on a busy weekend.
• No tools or diagnostic equipment cover, assumed to sit on the motor policy.
• Spouse or family driver assumed to be covered but not actually named.

Limits clients and contracts usually ask for

• Road risk comprehensive: full market value of own and demo vehicles.
• Customers' vehicles: highest single value on site; often £75,000–£250,000 or more at specialist dealers.
• Public and products liability: £2m–£10m.
• Employers' liability: £10m (market standard above the £5m statutory minimum).

Key facts and sources

• Motor insurance must meet the minimum requirements of the Road Traffic Act 1988 for any vehicle used on a road or other public place. legislation.gov.uk — Road Traffic Act 1988 Part VI
• DVLA issues trade licences (trade plates) to vehicle manufacturers, repairers and dealers for restricted purposes such as testing, demonstration and delivery. GOV.UK — Trade licensing: INF77
• Under the Consumer Rights Act 2015, goods including used vehicles sold to consumers must be of satisfactory quality, as described and fit for purpose. legislation.gov.uk — Consumer Rights Act 2015 Part 1 Chapter 2
• Employers must hold employers' liability insurance of at least £5 million under the Employers' Liability (Compulsory Insurance) Regulations 1998. legislation.gov.uk — EL (Compulsory Insurance) Regulations 1998

Common questions

What's the difference between road risk only and combined motor trade?

Road risk only insures motor use. Combined adds premises, stock, business interruption, tools and often legal expenses. If you have any site activity, road risk only is rarely enough.

Does motor trade insurance cover a customer's car on a test drive?

A properly declared motor trade policy covers permitted use of a customer's vehicle, including test drives. The customer's own policy may also come into play — settle this before handing over keys.

Can under-25s be insured on a motor trade policy?

Yes, but insurers restrict any-driver cover for under-25s. Younger drivers usually need to be named and may have higher excesses or lower vehicle-value limits.

Do I need insurance to use trade plates?

Yes. Trade plates do not provide insurance. A motor trade policy must cover the use for which the plate is issued (demonstration, delivery or recovery).

Does the policy cover sold cars I deliver to customers?

Only if delivery of sold vehicles is a declared trade use. If you drive a sold car to a customer, confirm the activity is on your schedule.