Motor trade insurance: One policy for every car that passes through your hands.

Road risk, combined and traders' policies from brokers who understand the trade. A few quick questions and we'll match you.

Road risk and combined
Full-time, part-time and mobile
No obligation

Get motor trade quotes

What motor trade insurance can cover

Sales, servicing, valeting, recovery, bodywork or a bit of everything. Tell us what you do and the brokers quote for that.

Road risk only
Combined motor trade
Vehicle sales
Servicing and repair
Valeting and detailing
Recovery
Bodyshop and paint
Part-time traders

What is motor trade insurance and who needs it?

Motor trade insurance covers people who buy, sell, repair, service, valet or recover vehicles as a business. It lets you drive vehicles you don't own, such as customers' cars or stock, for trade purposes. Ordinary car insurance won't cover that, so if vehicles pass through your hands for work, you need a trade policy.

It suits full-time garages and dealers, but also mobile mechanics, valeters, recovery operators, bodyshops and people who trade a few cars from home. What matters is the work you do, not the size of the business.

Is motor trade insurance a legal requirement?

If you drive a vehicle on a public road, the Road Traffic Act says it must be insured for at least third-party liability. When you drive customers' cars or your stock for the business, a motor trade policy is the usual way to meet that. If you employ staff, employers' liability is compulsory too.

Driving without insurance is a criminal offence. It can mean points on your licence, an unlimited fine and a possible ban. The rest of a motor trade policy, such as premises and tools cover, is not required by law but protects the business itself.

What is the difference between road risk and combined motor trade insurance?

Road risk only covers you to drive vehicles on the road for your trade. Combined motor trade insurance includes road risk and adds cover for the business itself, such as your premises, vehicles kept there, tools, and public and employers' liability. Which one fits depends on whether you work from a premises.

Cover	Road risk only	Combined
Driving vehicles on the road for trade	Yes	Yes
Vehicles kept at your premises	No	Yes
Premises, tools and equipment	No	Yes
Public and employers' liability	No	Yes

Many road risk policies can be built up with extras, and what a combined policy includes varies between insurers. Ask the broker exactly what each quote covers before you compare them.

What does motor trade insurance usually cover, and what does it leave out?

A motor trade policy usually covers you to drive customers' vehicles and your trade stock on the road, at the level of cover you choose. Combined policies add premises and liability. What is left out varies, but personal use of customers' cars and undeclared business activities are common gaps.

Most policies set a maximum value for any one vehicle you drive or keep. If you ever handle anything above that, tell the broker so the limit can be set to match.

Often included: driving vehicles in your care for trade purposes, third-party liability, your chosen level of cover for the vehicles.
Often optional: demonstration cover, tools and equipment, premises and stock, legal expenses, breakdown.
Commonly excluded: using customers' cars for personal trips, activities you didn't declare, drivers not covered by the policy, vehicles above the value limit.

Can I drive customers' cars on my motor trade insurance?

Yes, that is one of the main reasons motor trade policies exist. You are usually covered to drive customers' vehicles for trade purposes, such as test drives after a repair, collection and delivery, or moving them around the yard. Personal use of a customer's car is normally not covered.

Check who is covered to drive, too. Policies may name specific drivers or allow any employee within age and experience rules. If staff will be driving customers' cars, make sure they fit the policy.

What is demonstration cover in motor trade insurance?

Demonstration cover lets a potential buyer drive a vehicle you are selling. Without it, a customer's test drive may not be covered. It is usually an optional extra and often comes with conditions, such as you or a member of staff going along, or checking the driver's licence first.

If you sell cars, even part-time, ask for demonstration cover and read the conditions. Keep a record of the licence checks the policy asks for.

What are trade plates and do I still need insurance with them?

Trade plates are issued by the DVLA to motor traders and vehicle testers. They let you use a vehicle that isn't taxed on the road for certain trade purposes. They do not replace insurance. The vehicle still has to be insured while it is driven, usually through your motor trade policy.

There are rules about who can apply and what trade plates can be used for. The DVLA sets those, so check its guidance before you rely on them.

Can I get motor trade insurance if I trade part-time?

Yes. Some insurers will quote part-time traders, including people who buy and sell a few cars or do repairs from home alongside another job. You will need to show it is a genuine trade, not just changing your own car. Tell the broker honestly how much you do.

Insurers may ask how long you have been trading, how you advertise, and whether you are registered as self-employed. Having the answers ready makes the conversation quicker.

What affects the price of motor trade insurance?

Insurers price on how likely a claim is and how much it might cost. The main factors are the type of trade, your experience in it, the value of vehicles you handle, who will drive, where vehicles are kept, and your claims history. The level of cover and excess you choose also count.

The trade: sales, servicing, bodywork, valeting and recovery all carry different risks.
Experience: how long you have worked in the motor trade.
Vehicle values: the highest value of any vehicle you drive or keep.
Drivers: how many, their ages and their driving history.
Premises and security: where vehicles are kept overnight and how they are protected.
History: claims and motoring convictions, usually over the last five years.
Level of cover, extras and the voluntary excess.

How can I bring down the cost of motor trade insurance?

Start by making sure the policy matches what you really do. Then look at what you control: who drives, the vehicle value limit, security, your excess and the extras you add. A broker can quote different set-ups so you can see what actually changes the price.

Declare only the trades you actually do, but declare all of them.
Set the vehicle value limit to what you really handle.
Restrict the policy to the drivers who need it.
Improve security at your premises, such as locked compounds, alarms or CCTV, and tell the insurer.
Keep keys secure and away from the vehicles.
Consider a higher voluntary excess you could afford if you claim.
Pay annually if you can. Paying monthly is often a credit agreement and can cost more overall.

What do I need to get a motor trade insurance quote?

Have the basics of your business ready: what work you do, how long you have done it, whether it is full or part-time, and where you work from. The broker will also ask about the drivers, the value of vehicles you handle, and any claims or convictions.

Your trade or trades and how long you have been doing them.
Full-time or part-time, and whether you work from a premises, from home or mobile.
Details of everyone who will drive.
The highest value of vehicle you expect to handle.
Premises address and security, if you have one.
Claims and convictions, usually for the last five years.

Motor trade insurance questions

What happens after I submit?

Your details go to specialist brokers who deal with motor trade insurance every day. One of them will call you to run through your options and quotes.

Is there any obligation?

None. You can take a quote, ask for changes, or walk away. Nothing is bought until you say so.

Who are the brokers?

UK-based insurance brokers authorised and regulated by the Financial Conduct Authority. Kompare Limited (FCA reference 794660) is an appointed representative of Rainbow Connected Limited (FRN 749881).

How long does it take?

The form takes about two minutes. Brokers usually call back during working hours.

Do I need a premises to get a policy?

No. Mobile and part-time traders working from home can be quoted too; just say so in the form.

Does motor trade insurance cover my own car?

Some policies let you use a vehicle for social and domestic purposes, often with limits. Others don't. Ask the broker how each quote treats personal use.

Am I covered to drive a customer's car home overnight?

Only if the policy allows it. Many motor trade policies cover trade use only, so taking a customer's car home for personal reasons may not be covered. Check the wording.

Do I need motor trade insurance to sell my own car?

No. Selling your own car privately isn't trading. Motor trade insurance is for people who buy, sell or work on vehicles as a business.

Are my customers' cars covered while they are at my premises?

Usually only on a combined policy, or with premises cover added. Road risk only covers driving. If you keep customers' cars on site, tell the broker.

Can my employees drive on my motor trade policy?

They can if the policy covers them. Some policies name drivers, others allow any employee within set age and experience rules. Check before anyone drives.

Do trade plates mean I don't need road tax?

Trade plates let you use an untaxed vehicle on the road for certain trade purposes. They don't cover insurance, and the DVLA sets the rules on when you can use them.

Written and checked by the Kompare team · Last updated October 2026

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