Unaccompanied Test Drive Insurance – What You Need to Know

Unaccompanied Test Drive Insurance – What You Need to Know

With Covid 19 restrictions still in place, car dealerships are having to offer unaccompanied test drives. Many motor trade insurance policies do not offer unaccompanied test drive insurance cover as standard. We look at what you need to do to ensure your business stays safe and secure from checking driving licences, to trade plates and putting the correct insurance in place.

Keeping Customers Safe

The COVID 19 pandemic continues to rattle the UK motor trade sector.  According to the Society of Motor Manufacturers and Traders (SMMT), which collates new car registration data, car sales were down 4.4 percent in the weakest September. Overall the market slumped 33 percent during the first nine months of 2020.

However, there may be an anomaly with one large UK car dealer recording almost 25,000 bookings in September alone, up 178 percent on the levels before COVID struck.

A recent Autotrader survey revealed that 74 percent of customers were concerned about personal space, which could lead to people being nervous when it comes to the traditional car buying experience. Many potential customers will still want to go out on test drives to help them decide on what to purchase, but that’s something that seems impossible to complete without breaking social distancing rules.

Back in May this year the DVLA confirmed that customers were allowed to take unaccompanied test drives using a dealer’s trade plates but only if the dealer was properly insured. This allowed potential buyers out in the cars without having to send a dealer representative salesman with them. It came as welcome news to dealers across the UK who were worried about whether they would be allowed to use trade plates when letting customers out unattended.

Unaccompanied Demonstration Insurance

Insurance brokers are warning vehicle dealers looking to take advantage of unaccompanied test drives that they’ll need to have the right cover in place.

It’s unlikely that motor trade insurance policies will offer this as standard, so dealers need to speak to their broker about an extension to their conventional motor trade policy and examine the associated extra costs.

Trade plates are used by the motor trade for selling and demonstrating new vehicles. Brand new (or second-hand) cars already registered to your business must be taxed and trade plates can’t be used on unroadworthy vehicles.

All cars on sale must be covered by insurance and have a valid MOT in place unless they are exempt from MoT requirements. To obtain a trade plate, dealers need to apply for a trade licence at the DVLA and these last for either six or 12 months and expire in June or December. First-time applicants can get 7 to 11-month licences. You’ll need to provide a copy of your Motor Trade Insurance Certificate, which must match the name on the application. If you don’t have one, you’ll need to tell DVLA why and give details of your Companies House registration number.

The DVLA official statement states that trade plates are the property of the Secretary of State and motor traders should take all precautions to ensure that trade plates are not stolen. DVLA guidelines for trade plate use has, up until now, always been that a motor dealer or their employee must be present while they are in use. Dealers sending customers out on their own can now do so with trade plates, but insurance must also be in place.

We advise dealers to contact their insurance company and inform them of this revised DVLA policy and ensure that vehicles are still covered on the insurance policy during an unaccompanied test drive. You should tell your insurance company which vehicles are applicable in order for them to enter them on the MID. Motor tradespeople should also look at office, premises and storage cover as part of a comprehensive package.

Some useful motor trade links:

The National Franchised Dealers Association (NFDA) represents franchised car and commercial vehicle retailers in the UK. There are more than 4,500 franchise outlets in the UK and approximately 590,000 people working in the automotive retail sector.


Latest motor trade industry Covid guidelines


The Society of Motor Manufacturers and Traders (SMMT) exists to support and promote the interests of the UK automotive industry at home and abroad.


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