What is Demonstration Cover?

Demonstration cover is an extension you can add to your Motor Trade insurance policy that covers motor traders, specifically those selling vehicles, to let prospective customers test drive vehicles in their stock, before they purchase them.

Demonstration cover is an important Vehicle Sales insurance add-on as it allows customers to test drive one of your vehicles, increasing the chance of a sale and giving the sales person the opportunity to show off the car to the customer, in a real world environment.

As a motor trader involved in vehicle sales, Demonstration cover is something you will more than likely need. If you were going to purchase a car for your own stock, you would most likely want to be able to test drive the car so that you know there’s nothing wrong with it, or you can see how bad any known problems are.

Accompanied Demonstration cover is the most common type offered by Motor Trade Road Risk insurance providers and requires the policy holder, or one of the named drivers, to accompany any potential purchaser whilst on a test drive. Depending upon who your motor trade insurer is, some may only cover the vehicle whilst on a test drive at a Third Party Only level, whilst others may cover it to the same level as your main Motor Trade insurance policy. Terms of the Demonstration cover will specify that the person test driving the vehicle can’t be a friend or family member.

A Motor Trade policy with Unaccompanied Demonstration cover is usually taken out by larger motor trade businesses that have their own premises, as part of a Comprehensive Motor Trade insurance policy. It’s usually more expensive to add on Accompanied Demonstration cover due to the higher risks involved in letting someone drive one of your vehicles on their own, without a member of your business present.

Demonstration cover only insures the vehicle up to a reasonable distance away from your home or premises and, as there is no industry standard distance, it would be wise to check with your insurer to clarify how far a test driver can take the car away from the premises before it is no longer covered under your Accompanied/Unaccompanied Demonstration cover. Don’t forget to check this before letting someone take one of your vehicles out, just so you know what will and won’t be covered, before it’s too late!

If you want to find out more about Demonstration cover, or speak to a member of our Motor Trade team to find out how much it would cost to add to your policy, call us on 0800 221 8077.