Motor trade

How you can save money on your motor trade insurance

Practical points for motor traders looking at the cost of their insurance: the right cover, honest disclosure, specialist brokers and yearly reviews.

Keeping overheads down matters to every business in the motor trade, and insurance is one of the bigger costs. Many standard insurers won't cover motor trade work at all, so it is worth taking the time to find a policy that fits your business properly.

Whether you are a body repairer, run an MOT station or sell vehicles, there may be ways to manage what you pay for motor trade insurance without cutting back on the cover, service or excess you need. Here are some of them.

Use a broker who understands your business

There are different kinds of motor trade policy, and every trader's needs are different, so not every policy suits everyone. A policy with the widest cover may look appealing at first, but it is likely to cost more and include cover your business may never use.

One way to manage the cost is to be clear about what your business actually does and what it needs. You don't have to accept cover that isn't relevant to you. Look for a broker who understands your work and can put together a policy that covers the risks you really face.

Ask about all the costs

Charges you didn't expect, such as fees or add-ons, can make a policy cost more than it first seemed. To avoid surprises, it is worth asking the broker to explain the full cost and what is included before you buy. You know your business best, so ask about anything you're unsure of.

Be honest with your insurer

Holding back information from your insurer won't help you. If your insurer finds out that you use vehicles on your policy for purposes other than those set out in your contract, it could cancel the policy or refuse a claim, and you could end up out of pocket. Giving full and accurate information means the policy can be built around what you really do.

Insurance isn't only about the price. It protects your business, your staff, your customers and anyone else involved if there is an accident. The aim is cover that fits all of your business needs, and leaving out facts to bring the price down goes against the reason for having insurance in the first place.

Add your partner to your policy

Not every insurer will let you add your spouse or partner to a motor trade policy, but some will. Having them on the same policy can work out more affordable than running two separate policies, though it depends on your circumstances, so it is worth asking.

Look for motor trade specialists

Searching online makes it easier to find brokers who specialise in particular types of insurance. It is worth checking that the firm you speak to really does know motor trade insurance, and a phone call is a good way to find out. Asking questions will soon show whether they are the specialists they say they are.

A broker who works with motor traders is more likely to understand your requirements. They will also know the market and may have relationships with underwriters who can tailor a policy to suit your business. You can check that any firm is authorised on the FCA register.

Give the correct details every year

Your business may look different from one year to the next, so it is important that the details you give your insurer are correct and up to date. Failing to disclose information can be costly. If you need to claim and your insurer finds you gave it wrong information, your cover could be invalidated and you could be left to pay the whole bill.

These are worth reviewing regularly:

• Business type. Be clear with your insurer about the activities you carry out.
• Drivers. As staff come and go, make sure you're not still insuring people who no longer work for you, and check that everyone who needs cover has the right cover.
• Vehicle types and values. You may use different types of vehicle in your business. Check they are insured correctly, and that your insurer has the right value for your stock, as values go up and down over time.
• Excess. If you have had very few incidents, you might consider a higher excess to lower your premium. Bear in mind you would pay more if something did happen.
• Public and employers' liability. These are important types of cover and can protect you if someone makes a claim against you. Most businesses with employees must have employers' liability insurance by law, as gov.uk explains.

Next steps

If you are a motor trader looking at your insurance costs, these points may help you get cover that fits your business. You can find out more on our motor trade insurance page. You fill in a short form and a specialist broker from our panel contacts you about cover.