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How to get car traders insurance


Knowing how to get car traders insurance will help keep those in the business of selling motorised vehicles legal when on the road with the correct financial protection. This type of policy is specifically designed for those in the motor trade business that includes buying, selling, restoring, salvaging, transporting and repairing motorised vehicles. 

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Is car trader insurance the same as motor trade insurance?

The term car trader is synonymous with motor trader insurance in the business world. The reason why some people use the term car instead of motor is that most businesses involved in the selling of motorised vehicle generally handle more cars than any other type of vehicle and the reference of car is just carried forward. 

Car trading is a popular part time job for many people who have an interest in dealing in cars. If you are in this category it is possible to apply for part time traders insurance. Normally you must be 25 or over, but some brokers will offer cover for 23 year olds. In either case you must hold a clean driving licence for at least one year to qualify for under 25 traders insurance.

How can one get car traders insurance?

This is a specific type of insurance for those people in the business of dealing with vehicles. If your business is in this sector you can get a car trader policy. The restrictions are very few, but include the following;

  • Must be a UK resident for a minimum of 3 years.
  • Must be between 25 and 74 years old.
  • Some insurance firms do offer car trader policies for people as young as 23, but they are very few of them and the premiums are very expensive.
  • Must have a valid UK drivers license for at least 1 year before applying for a car trader policy.
  • Must be able to prove with receipts that you are in the motor trade business.
  • You must have a clearly defined place where the vehicles will be stored.

Does the location of the car trader business matter?

The location of the car trader business is an important detail that must be disclosed. For those that are in the motor trade business part or full time and operate out of their home residence, the number of vehicles they can have at one time is limited to 5. 

For those businesses that operate full time and the location of the vehicles is not the home residence of the business owner, the number of vehicles they can have is only limited by the size of the property they own.

Can prospective customers take the car out for a test drive and be covered?

The standard car trader insurance policy only permits employees of the business to operate the vehicles on the road legally. For those car businesses that involve the selling of vehicles, the need to add demonstration cover is a must. This is an add-on to a comprehensive insurance policy that covers the vehicle when a prospective customer takes the vehicle on a test drive. 

There are two types of demonstration cover that include;

  • Accompanied by an employee
  • Unaccompanied which has a higher premium due to the risk involved.

Does every vehicle have to be licensed and taxes paid on it?

No, the vehicles to be sold do not need to be licensed or have taxes paid on them when they are sitting on the lot. If they are to be driven off the lot they will need to use trade plates. These plates allow the vehicles to be driven on the road and be covered by the insurance policy.

Traders Insurance