How Much Will a Motor Trade Insurance Policy Cost?

One of the first things you’ll be asking when purchasing a Motor Trade insurance policy is “How much is it going to cost?”

However, there is no one-size-fits-all answer to this question, as with any other type of insurance policy there are a number of factors at play that can have an effect on the cost of the policy.

Motor Trade policies may even differ in price for different types of traders, such as a Mechanics insurance policy versus a Breakdown Recovery insurance policy. This is because different things will need to be included in the policy, to make sure it’s fit for the trader’s business and the work they carry out.

How the business is run will also affect the price. For example, a sole trader operating from home may pay less than a car sales business with several employees who all need to be insured to drive on the policy.

Location can have a big impact when it comes to the price of a Motor Trade insurance policy, in the same way that it can for any Personal insurance. A trader in an area with high car crime will usually pay more than a trader working in an area with a lower crime rate. Likewise, if you are operating your business from a busy city, then there is a good chance that you will pay more for your insurance than if you are trading from a quiet town or village.

Additional Products and How They Affect the Cost of Motor Trade Insurance

Additional insurance products can also change the cost of your insurance policy - things such as Stock of Vehicles cover will need to be added to the policy at an additional cost. There will be other additional cover items that will be essential to some motor trade businesses. For example, those in the business of selling cars will no doubt want Demonstration cover, to allow prospective customers to test drive their vehicles. 

Even the price of Demonstration cover can vary, due to the types of cover available. Some policies may allow the customer to test drive the vehicle without a member of staff present, though naturally there is more risk involved, and therefore the price of this type of Demonstration cover will be more expensive than a policy requiring accompanied test drives only.

Tools & Equipment cover is another insurance product often added on to a Motor Trade insurance policy, mainly by traders taking out a Mechanics or Mobile Mechanics insurance policy. Just like Demonstration cover, there are factors to determine the price of this particular Trade Car insurance additional product, such as where the tools are kept.

A mobile mechanic with Tools & Equipment cover may keep their tools in their van overnight, which may be seen as a higher risk to the insurance company, and this will be reflected in the price.

Liability Insurance Can Also Increase the Cost of Motor Trade Insurance

There are also Liability products that some motor traders will need, some of which will be required by law. For example, motor traders that have people working for them will need Employers’ Liability insurance by law. Again the price of this policy can differ for each company; more employees can mean more risk, which equals a higher price.

Some liability products which are not required by law can however be very useful for a business. Product Liability insurance, which could be a useful add-on for a mechanic or tyre fitter, or Public Liability insurance which would be a useful product for any business that has customers visiting their premises, are both worth considering if you’re a motor trader, to ensure your business is properly protected.

Fully Comprehensive Motor Trade Insurance vs Third Party Only

One of the deciding factors in how much a Motor Trade insurance policy is going to cost your business will be the basic level of cover you opt for. If you are worried about how much your Motor Trade insurance is going to cost, than a Third Party Only policy might be a good option for you, or at least your bank balance.

However, a Third Party Only Motor Trade insurance policy isn’t always the best option for your business. Its minimal level of cover means the vehicles used, worked on and in the care of your business aren’t fully covered, which could end up costing you later down the line if you need to pay out for anything.

There are some motor trade businesses that are suited to a Third Party Only policy such as valeters or tyre fitters, who won’t be driving customers cars and may drive a car that won’t cost much to replace. But for traders such as mechanics who will be driving customer cars, making sure that they are fully protected is best practice.

If you and/or your motor trade business employees regularly drive customer cars or stock cars on the road, then making sure they are covered with fully Comprehensive insurance will be worth the initial upfront cost, as it will give you peace of mind. It might not even cost as much as you think!

How Can You Get the Best Price On Your Motor Trade Insurance Policy?

Reducing the level of cover you have on your Motor Trade policy is the easiest way to get cheap Motor Trade insurance. For example, a Third Party Only Motor Trade policy is more than likely going to be cheaper than a Comprehensive policy. Again, the more cover you have, the higher the price is likely to be, however you should be warned that the cheapest policy on offer to you may not be the best or most suitable for your business. Weighing up what needs insuring in your business, e.g. Stock of Vehicles, is an important part of the insurance process to make sure that if something happened, you won’t be left out of pocket by being underinsured.

Use a Broker to Help Keep the Cost of Motor Trade Insurance Low

Using a specialist insurance broker such as Think is often the best way to get the right Motor Trade insurance policy for you, at the right price. We have access to a panel of leading Motor Trade insurers, and have years of experience at helping Motor Traders, large and small, to get the best Motor Trade insurance policy for them.

To speak to a member of our Motor Trade insurance team about what policy is right for you, complete our Motor Trade Insurance quote online form or call us for free on 0800 221 8077.