Motor trade insurance

Get the cover you need for your motor trade business

Whether you're carrying out repairs and servicing or trading vehicles, the right insurance could save you hundreds - or even thousands - of pounds.
Fact checker
Last updated
December 1st, 2023

What is motor trade insurance?

Motor trade insurance is designed to protect car dealerships, garages and others in this busy sector against issues that may lead to financial loss. It covers the various risks that businesses operating in the motor trade face, including loss or damage to customers’ vehicles while under your care.

What types of businesses need motor trade insurance?

Businesses in the motor trade industry that need motor trade insurance include:

  • Car dealerships

  • Car repair garages 

  • Mechanics 

  • Valet services 

  • Vehicle restorers

  • MOT testing stations

Additionally, businesses dealing with the import or export of vehicles and those buying and selling vehicles for a profit also require motor trade insurance.

UK automotive turnover in 2021[1]

What does motor trade insurance cover?


Damage to vehicles
Third-party liability

Not covered

Personal use of vehicles
Damage caused by wear and tear
Damage caused by drivers who are not listed on the policy

Motor trade insurance can also offer a range of extras, either included in more comprehensive policies or bought as add-ons. These include:

How much does motor trade insurance cost?

The cost of motor trade insurance depends on several factors, including:

  • The size of your business

  • The number of employees

  • The types and number of vehicles typically being used, traded or worked on

  • The level of protection required

  • How many years of no claims you have

  • Your age (younger policyholders typically pay more)

It’s important to compare quotes from different insurance providers to find the best policy for your business.

What is a road risks policy?

If a job requires you to drive vehicles that aren’t yours, it might be a good idea to add a road risks policy to your motor trade insurance. For example, you may need a larger van if you’re a landscape gardener and need to excavate and remove a large brick fish pond.

You can select the level of cover you need so you are covered for the type of risk you might encounter. These are:

  • Third party

  • Third party, fire and theft

  • Comprehensive

Road risks cover is worth considering even if your motor insurance allows you to drive other vehicles. This is because the terms of your insurance will invariably stipulate that the purpose of the journey must be for social or leisure and not for work. 


What types of vehicles can be covered under motor trade insurance?

Motor trade insurance can cover a range of different vehicles, including cars, vans, motorcycles, and even commercial vehicles. However, the types of vehicles that can be covered will depend on the policy chosen.

Can I add additional drivers to my motor trade insurance policy?

Most motor trade insurance policies allow for additional drivers to be added to the policy. However, you’ll need to provide details about the additional drivers and their driving history in order to get an accurate quote.

Could my motor trade insurance be cancelled?

Your motor trade insurance may be cancelled for any number of reasons. These include, if you don’t make your premium payments on time, if you provide false information on your application, or if you’re found to be engaging in fraudulent activity.

Do I need motor trade insurance if I’m self-employed or part-time?

If you’re self-employed or part-time and operate a business in the motor trade industry, you’ll still need motor trade insurance. This is because the risk of accidents, theft and other types of loss still exists.

Do I need motor trade insurance if I only work on my own vehicles?

If you’re only working on your own vehicles, you may not need motor trade insurance. However, if you’re trading cars, or repairing or servicing other people’s vehicles, you’ll need motor trade insurance to protect yourself and your business.

What is combined motor trade insurance?

Combined motor trade insurance is a type of insurance that combines multiple types of coverage into a single policy. This can include cover for vehicles, tools and equipment, business premises, and liability insurance.

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About the author

Salman Haqqi
Salman Haqqi spent over a decade as a journalist reporting in several countries around the world. Now as a personal finance expert, he helps people make informed financial decisions.

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1. Motor Industry Facts 2023 Reports on the automotive industry by the Society of Motor Manufacturers and Traders