Motor trade insurance for dealers, garages & traders
Motor trade insurance from a panel of trusted UK insurers
Insure your motor trade business with zero hassle
Whether you buy and sell vehicles part-time, run a busy service and repair garage, or operate a mobile mechanic business, motor trade insurance is the specialist cover that keeps your business protected. Standard commercial insurance doesn’t cover the unique risks of working with other people’s vehicles — motor trade insurance is designed specifically for those risks.
At insurd, we’re an FCA-regulated specialist insurance broker with over 50 years of experience arranging motor trade insurance across the UK. We work with a panel of leading UK insurers to find the right policy for your trade — whether you need road risk only or full combined cover.
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As a specialist insurance broker, we search our panel of leading UK insurers to find the right motor trade policy for your business.
World-class support
You’ll get your own UK-based human to look after you for the duration of your policy.
We use a combination of technology and a wealth of experience to give you unrivalled cover and more affordable motor trade insurance prices. Complete a quote form in a matter of minutes.
What is motor trade insurance?
The primary purpose of this insurance is to offer protection against the unique risks associated with handling multiple vehicles and dealing with the public. It offers a range of policies tailored to meet the specific needs of a motor trade business.
Motor trade insurance is not just a legal requirement for many businesses but also a crucial risk management tool. Without proper insurance, a business could face significant financial losses from accidents, theft, or damages. Here are some key reasons why cover insurance is vital:
- Legal compliance: It ensures that your business adheres to legal requirements, avoiding hefty fines and penalties.
- Financial protection: Safeguards your business against the financial fallout from accidents, theft, and other unforeseen events.
- Peace of mind: Allows you to focus on running your business without constantly worrying about potential risks and liabilities.
Types of motor trade policy
Road risks insurance
Road risk insurance is a fundamental component of motor trade insurance. It allows traders to legally drive vehicles on public roads for purposes such as test drives, deliveries, or customer collections. There are three levels of road risks cover:
- Third-party only (TPO): Covers damage to other people’s property or injury to others. It’s the minimum legal requirement.
- Third-party, fire and theft (TPFT): Includes TPO cover and adds protection against fire damage and theft of vehicles.
- Comprehensive: Offers the highest level of protection, covering third-party risks, fire, theft, and damage to the trader’s vehicles.
Combined motor trade insurance
Combined motor trade insurance provides broader cover, encompassing road risks and additional protections such as:
- Business interruption: Covers lost income and additional expenses if your business is unable to operate due to an insured event.
- Premises insurance: Protects business premises against risks like fire, theft, and damage.
- Material damage: Cover damage to any vehicles or equipment stock on your business premises.
- Employer’s liability: Mandatory for businesses with employees, covering workplace injuries or illnesses.
- Public liability: This covers legal costs and compensation if your business activities injure a member of the public or damage their property.
- Tools and equipment: Protection for the tools and machinery essential to your operations.
- Extra drivers: Cover for employees who may be driving customers’ cars.
Motor trade insurance for every type of trader
Motor trade insurance is essential for anyone operating in the motor trade industry. Who needs it includes, but is not limited to:
Part-time traders
Part-time traders insurance to protect you when buying, selling or repairing vehicles in the motor trade, whether that’s working from home or as additional work.
Service and repair garages
Service and repair garage insurance for your garage, employees and customer vehicles in your custody. Protection for vehicles having MOTs, being repaired, serviced, or stored.
Recovery operators
Recovery vehicle insurance for recovery operators. Including vehicle and business premises protection. Cover for towing and recovery operations.
Mobile mechanics
Mobile mechanic insurance for working on, testing and driving other people’s cars at various locations.
Valeters and detailers
Car valeting insurance for protection when cleaning and detailing customers’ vehicles. Cover for the vehicles in your care for cleaning and detailing.
Tyre fitters
Tyre fitter insurance for protection when working on and moving other people’s vehicles. For mobile fitters or motor traders with premises.
How much does motor trade insurance cost?
Typically, motor trade policy premiums can range from a few hundred to several thousand pounds annually, influenced by the cover level and specific details of your business.
Key factors affecting how much motor trade insurance costs:
Type of cover
Road risk only, road risk with combined, and the level within each all affect your premium. Combined policies covering premises, tools, and liability cost more but provide broader protection.
Nature of business
The specific operations of your motor trade business are the most significant pricing factor. A part-time trader buying and selling from home carries very different risk to a full-time garage.
Location and security
Where your business operates and the security measures in place affect your premium. Premises with Thatcham-approved alarms, CCTV, perimeter security, and secure vehicle storage attract lower rates than those without.
Vehicles covered
The types of vehicles you deal with directly impact your costs. Standard cars carry lower premiums than high-value, classic, modified, or specialist vehicles. The maximum value of vehicles you hold at any one time is also a key factor.
Driver details
The age, experience, and driving records of named drivers are critical cost factors. Restricting your policy to experienced drivers with clean records and setting minimum age requirements reduces your risk profile significantly.
Policy customisation
Adding cover beyond road risk — employer’s liability, public liability, tools, premises — increases your premium but provides more protection. The right level of customisation depends on the nature and scale of your operations.
How to reduce your motor trade insurance premium
Beyond the factors above, there are several practical steps that can help reduce your motor trade insurance costs.
- Restrict your driving permissions — The more drivers covered under your motor trade policy, the higher your premium. Limiting cover to named drivers rather than any driver, and setting minimum age requirements, can significantly reduce costs.
- Invest in premises security — For traders operating from fixed premises, Thatcham-approved alarms, CCTV, perimeter security, and secure vehicle storage all reduce your risk profile. Insurers assess your premises security carefully at underwriting.
- Manage the value of vehicles on site — The total value of vehicles in your care, custody, and control directly affects your premium. Keeping stock levels accurate and not overstating the value of vehicles on site ensures you’re not paying for unnecessary cover.
- Maintain a clean claims history — Motor trade policies are particularly sensitive to claims history. A single significant claim can materially increase your renewal premium. Active claims management — reporting promptly, managing repair costs carefully — protects your record.
- Consider a higher voluntary excess — A higher voluntary excess reduces your premium but means absorbing more of the cost of smaller claims. This can be effective for experienced traders with a strong claims history who are unlikely to make frequent small claims.
- Review your road risk requirements — If your road risk cover includes any driver or young driver permissions you no longer need, removing them at renewal can reduce your premium without affecting your day-to-day operations.
Motor trade insurance frequently asked questions
What is motor trade insurance and do I need it?
Motor trade insurance is a specialist policy for anyone who works with vehicles for profit — whether you're buying and selling cars, repairing, valeting, recovering, or testing vehicles. If you carry out any motor trade activity, even part-time, you're legally required to have at least third-party road risks cover. Standard personal car insurance won't cover you for business use.
What's the difference between road risks and combined motor trade insurance?
Road risks insurance covers you to drive vehicles on public roads as part of your motor trade activities — whether they're your own vehicles or customers'. Combined motor trade insurance goes further, adding protection for your premises, tools, equipment, stock, public liability, and employers' liability. If you work from premises or have employees, a combined policy is usually the better choice.
Can I get motor trade insurance if I only trade part-time?
Yes — we arrange motor trade insurance for part-time traders as well as full-time businesses. You'll still need to demonstrate that you're running a genuine motor trade operation, even if it's on a small scale. Visit our part-time motor trade insurance page for more details.
What is the MID?
The Motor Insurance Database (MID) is a central register of all insured vehicles in the UK, maintained by the Motor Insurers' Bureau (MIB). Any vehicle not declared SORN must be registered on it. Police use the MID to check whether vehicles on the road are legally insured, so keeping it accurate is essential.
Should I add every vehicle to the MID?
Any vehicle registered to, owned by, or leased to you must be added to the MID. This also includes vehicles regularly covered by your policy — such as employees' vehicles — and any trade plates you own.
Do I have a period of grace to add a vehicle to the MID?
No — if you need cover for a particular vehicle, it must be added to the MID immediately. Driving a vehicle that isn't on the MID could result in a police stop, a fine, and even the vehicle being impounded.
How do I update the MID?
Our dedicated team handles all MID updates for you. Just get in touch by email or phone and we'll take care of the changes and confirm when they've been made.
Who actually underwrites my policy?
We're a broker, which means we arrange cover on your behalf with a handpicked panel of trusted insurers. You'll see exactly who's underwriting your policy before you commit to buying.
Why can I trust insurd?
We've been arranging insurance for over 50 years — now trading as insurd — and we're authorised and regulated by the Financial Conduct Authority (Firm Register Number: 308508), and over a thousand real customers have shared their experiences with us on Trustpilot.
You can verify our status directly on the FCA register.
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