Motor Trade Insurance Guide: Cover for Vehicle Businesses

What is motor trade insurance?

Motor trade insurance is a type of policy aimed at businesses whose work involves handling vehicles that do not belong to them, such as customer cars awaiting repair, vehicles held as stock, or cars being valeted or transported. Rather than the vehicle itself being insured, the policy typically covers the business and its authorised drivers to drive and work on vehicles as part of the trade.

This is different from a standard motor insurance policy, which covers a specific named vehicle. Motor trade insurance instead revolves around the people and the business activity, meaning cover can apply across a changing range of vehicles present on site or being driven as part of daily operations.

Who needs motor trade insurance?

Businesses commonly needing this type of cover include garages and repairers, vehicle dealers, valeting and detailing businesses, breakdown and recovery operators, and businesses that transport vehicles between locations. Anyone who regularly drives or has custody of vehicles they do not own as part of their trade is likely to need some form of motor trade insurance.

The specific type of policy needed depends on the work involved. Road risk only cover suits businesses mainly concerned with driving vehicles, such as valeters or delivery drivers, while combined motor trade insurance adds cover for premises, tools, and liability for businesses that also carry out repair or storage work on site.

What's covered and what's excluded

Road risk cover typically protects against liability and damage while authorised drivers are driving customer or stock vehicles for business purposes, such as test drives, moving vehicles on site, or delivering a repaired car back to its owner. Combined motor trade policies can add public and employers’ liability, cover for tools and equipment, and cover for the premises itself.

Common exclusions include using vehicles for social, domestic, or personal use unless specifically agreed, unauthorised drivers, and certain types of high-value or specialist vehicles that may need to be declared separately. Cover for customers’ vehicles while stationary on the premises, for example against fire or theft, may need to be added as a separate section rather than assumed as part of road risk cover.

• Road risk cover for authorised drivers using customer or stock vehicles
• Combined cover can add premises, liability, and tools cover
• Customers’ vehicles on site may need separate cover for fire, theft, or damage
• Unauthorised drivers and private use are typically excluded

What affects the price

Premiums depend on factors such as the type of trade (for example, a valeter versus a used car dealer), the number of drivers and their driving records, the types of vehicles typically handled, and whether cover is road risk only or combined. The age and experience of drivers, and any previous claims or convictions, are also considered.

The size and value of the business, including stock levels for dealers or the range of services offered by a garage, can influence the price of combined policies. Security measures at the premises, such as fencing, alarms, and CCTV, may be relevant where cover for stock vehicles or tools is included.

Tips for motor traders

Be precise about the nature of your trade and the types of vehicles you handle, since describing your business accurately helps ensure the policy matches your actual activities. If your business changes — for example, if you start offering vehicle storage or begin handling higher-value vehicles — let your insurer know so your cover keeps pace.

Check who is listed as an authorised driver and keep this list up to date, as using an undeclared driver could affect a claim. It is also worth clarifying whether customers’ vehicles are covered while parked on your premises, as this is sometimes a separate consideration from road risk cover.

How to get a quote

If you run a business that involves driving or working on vehicles you don't own, you can submit your details through a short online form to be connected with a specialist motor trade broker. They can help identify whether road risk only or combined cover suits your operation, with no obligation to proceed.

Frequently asked questions

What's the difference between road risk only and combined motor trade insurance?

Road risk only covers driving customer or stock vehicles, while combined motor trade insurance adds cover for premises, liability, and tools for businesses that also carry out repair or storage work.

Does motor trade insurance cover my own vehicle?

It is generally designed to cover driving vehicles that belong to customers or form part of trade stock, rather than a vehicle you personally own, so check the specific terms with your insurer.

Who can drive under a motor trade policy?

Only drivers specifically authorised under the policy are generally covered, so it's important to keep the list of named or permitted drivers accurate and up to date.

Does it cover customers' cars while parked at my garage?

Not always automatically — cover for stationary customer vehicles against risks like fire or theft may need to be included as a separate section.

Is motor trade insurance only for garages?

No, it also suits dealers, valeters, recovery operators, and other businesses that drive or handle vehicles they don't own as part of their work.