Taking out a part-time motor trade insurance policy is ideal for anyone who already has another occupation outside of the motor trade and buys or sells vehicles or works on them either as a business or even a hobby.
Part-time motor trade insurance is designed to cover your own business vehicles as well as those being worked on, delivered to customers, sold on or for any other motor trade purposes such as scrap metal collection or repossessions.
In addition to your road risks cover, you can also include insurance for your premises, vehicle storage and refurbishment together with tools, machinery, equipment and vehicles away at a sub-contractor’s premises. Liability insurances can be added as and when necessary or if you decide you would like the extra protection.
A part-time motor trade insurance policy may also have the option of covering your everyday vehicles for social, domestic and pleasure use meaning you do not need to have an additional private insurance policy.
If you are considering buying and selling vehicles on a part-time basis, a part-time motor trade insurance policy will allow you to register the vehicles for the Motor Insurance Database (MID) and remove them when necessary.
Which Businesses Need Motor Trade Insurance?
Here are a few examples of businesses that will require some form of part-time motor trade insurance.
Car mechanics: you will need part-time motor trade cover to work on and drive your customers’ vehicles. Private vehicle insurance will not give you the cover you need should a vehicle be damaged in some way or involved in an accident.
Accident and body repairers: if you are manoeuvring vehicles or repairing bodywork, you will need motor trade cover including some form of liability insurance.
Windscreen replacers: part-time motor trade insurance will help to protect against any additional damage when repairing or replacing windscreens.
Tyre and exhaust fitters: even fitting tyres and exhausts comes under the motor trade umbrella where a customers’ vehicle is under your care and control. Faulty products or workmanship can all lead to expensive legal claims if you do not have the right insurance in place.
Car valets: For valets that operate from a specific site or on a mobile basis, motor trade insurance will offer the right level of public liability protection needed when cleaning or moving a customer’s vehicle. Selecting the wrong cleaning products for someone’s expensive leather interiors could cost you dear unless you are covered.
Repossession agents: Agents employed to repossess vehicles with outstanding debts must have motor trade insurance to be able to legally drive the vehicles that they are repossessing in case of accidents or damage.
Vehicle deliverers: A company that transports and delivers new vehicles requires motor trade insurance to guard against accidents or damages on the road.
Breakers yards: Vehicle dismantlers and car salvage companies need motor trade insurance to give protection to their employees and premises. Yards that have numerous trip hazards could lead to employees making expensive claims and by law you need to have employers’ liability insurance in place.
What is Part-Time Motor Trade Insurance?
Part-time motor trade insurance is specifically designed for people who work with vehicles outside of their main job. This may include buying and selling or service and repairs of vehicles either from home or a small, private garage.
Part-time motor trade insurance does not differ significantly from full-time motor trade insurance but is specifically designed for motor trade operators who work less frequently and often in addition to another profession outside of the motor trade.
Vehicle sales, maintenance, servicing, MOT testing, tyre and exhaust fitting as well as restorations are all covered by full-time and part-time motor trade insurance.
As a part-time motor trader, you will be less likely to have employees and more likely to be based at home, therefore lessening the need for employers’ liability cover or business property insurance.
A part-time policy can also include your private vehicles and could even cover a second business so that both your motor trade company and other profession is covered under the same insurance policy to reduce costs.
What is a Part-time Motor Trader?
A part-time motor trader is someone who generally has a main profession or occupation outside of the motor trade or works on vehicles as a hobby. They often do not deal with a large enough quantity of vehicles to warrant a full-time policy. You will, however, still need a motor trade insurance policy by law.
What Insurance Do Part-time Motor Traders Need?
Whether you are repairing vehicles or buying and selling, you will generally need road risks insurance to enable you to drive any vehicles in your possession in connection with your motor trade business.
If you are selling cars, it is quite likely potential customers will want to take them for a test drive and therefore it is a good idea to also add accompanied demonstration cover to your road risks policy.
If you are working from a small lock-up garage or service and repair centre, you might want to consider a part-time motor trade insurance combined policy to cover your leased or owned building as well as any stock of vehicles, tools and equipment that may be on site.
Whether you work from home or premises, you should also consider liability cover to protect you from any claims of alleged injury that could be made against you from any members of the public. If you have employees, then you legally need to have employers’ liability insurance.
Part-time motor trade insurance should be considered for your business if:
You will need road risks insurance to protect you when working on or driving a customer’s vehicle
- You have another profession outside of the motor trade and want to be covered for both
- You want to avoid having two policies for both your private vehicles and those included as part of your part-time business
- You need premises cover, vehicle storage, refurbishment, tools and equipment in a combined policy
- You need the added ability to add and remove vehicles for the MID as and when required
Road Risk or Combined Cover?
When looking around at different types of motor trade insurance being offered, you will likely come across two main types: road risk for your vehicles and combined insurance if you intend to operate from a garage or workshop.
If you are handling or driving customers’ vehicles as part of your business, or even if you own your own company vehicles, you will need to take out a comprehensive road risk policy as part of your part-time motor trade insurance policy. This will help to protect your company against any legal claims from accidents or vehicle damage that may occur on-site or off-site.
Whether you are working on repairing or delivering motorbikes, cars, vans or trucks, a motor trade insurance policy will insure customer vehicles that are under your ‘care, custody and control’.
Road risk policy
As you may not be operating from a fixed location or even be operating from your home, road risk insurance could be sufficient to cover both your own vehicles and those you are working on or transporting. Within road risk cover, there are three levels of policy available which is similar to that of private vehicle insurance: third-party, third-party fire and theft and fully comprehensive.
While having car insurance in place is a legal requirement for private vehicle users, road risk insurance is highly recommended to anyone running a business in the motor trade, whether full- or part-time. This type of insurance is not mandatory, but it could lead to some hefty financial outlays if you are not sufficiently covered and something were to go wrong.
Levels of part-time motor trade insurance cover:
Third party only:As with private vehicle insurance, this is the most basic level of cover needed to legally drive your vehicles on public roads. It will cover your business against any damage, loss or injury caused to third parties, but not the vehicle you are driving. Therefore, any damage to your own vehicle will need to be paid for out of your own pocket.
Third party, fire and theft: This is the second level up from third party only cover. Third party, fire and theft includes all of the benefits of third-party protection, along with cover against damage to vehicles which are covered under your own policy as a result of fire or theft.
Fully comprehensive: As the name suggests, this is the most extensive form of motor trade insurance for your business. The downside of this is that it is also the most expensive but if you are covering both your private vehicles as well as company vehicles under a part-time policy, the price becomes more competitive. A comprehensive policy will cover you for any accidental damage incurred on any of your own company vehicles (and private vehicles if also included on your part-time policy), as well as customers’ vehicles under your ‘care, custody or control’ and third-party vehicles which incur accidental damage.
When selecting your insurance broker, make sure they are willing to cover the level of vehicles you intend to drive or work on. Some motor trade insurers will not accept protection of certain vehicle types, such as luxury motor vehicles or classic cars. It is important to clarify this before signing on the dotted line for your new policy.
Combined insurance policy
If as a part-time trader you have premises, then it may be more worthwhile investing in part-time combined motor trade insurance, which includes coverage for tools, buildings, money, equipment, machinery, and business interruptions for a variety of reasons.
Product and liability insurance can also be included to help protect you against any customer at-fault accidents that occur on your premises or as a result of faulty parts, workmanship or even advice. If you have employees, you will also need employers’ liability insurance.
When searching for the right part-time motor trade insurance for you, try to speak to brokers that offer policies adaptable to your needs. Tradex has decades of experience within the motor trade industry and is adaptable to many diverse types of business needs, from small start-ups to well established companies.
Additional extras supporting part-time motor traders include multiple or single driver cover, spouse or business partner cover, additional business usage cover and a broker that is supportive of younger drivers. Tradex offers the Bonus Booster, which is ideal for younger drivers just starting out. Those without a bonus can gain a six-month policy to accrue the same discount as a year’s no claims bonus and subsequently use this with us on a full-term policy.
As a part-time motor trader, you will also need a policy that is flexible and varied, with options to change and develop whether you are running a business or working on your latest hobby. You may just buy and sell a few cars in the evenings to give you some supplemental income or repair old cars to resell for a profit. Whatever you do, it is important to be protected and find a policy that meets your needs as they change.
You may also benefit from adding coverage for your primary occupation to your motor trade insurance if applicable. Some motor trade insurance policies will not include policyholders that work only part-time in the motor trade and want to also use their vehicles in connection with their primary occupation, so it is worth checking in advance.
Do I Need to Use the MID?
If you are considering buying and selling vehicles on a part-time basis, taking out a part-time motor trade insurance policy will give you access to register all of your vehicles for the MID and remove them when needed.
MID stands for the Motor Insurance Database, which is managed by the Motor Insurance Bureau (MIB). It is a comprehensive central record of all insured vehicles in the UK, which can be easily checked. The MID is used by the Driver and Vehicle Licensing Agency (DVLA) and the police to remove vehicles that are uninsured from the road.
When you have a part-time motor trade insurance policy with a broker such as Tradex, we can if requested, access the MID to update vehicles on behalf of the motor trader. It is imperative that motor traders inform their broker as soon as possible when buying or selling cars to keep records of all their vehicles on their books up to date.
When Should I Provide a MID Update?
The MID will need to be updated by you or your insurance broker every time a vehicle is bought or sold. Remembering to remove a vehicle when it is sold is just as important as adding them to the MID. If you have sold the vehicle and not informed your broker, you remain responsible for it including parking tickets and speeding offences, together with any accidents that involves the vehicle.
Maintaining accurate and up-to-date records on the MID is one of the most important responsibilities of a motor trader. Failure to do so could lead to your vehicle being alerted to the police on an Automatic Number Plate Recognition (ANPR) alert which means you could be pulled over at the roadside, face a fine or have your vehicle impounded.
Alongside your business vehicles, you will need to include any car you use for social, domestic and pleasure (SDP) together with any trade plates that you use when transporting vehicles
Don’t forget also that any trade plates you use when transporting vehicles or on accompanied demonstrations will also need to be added to the MID.
There are a few vehicles you don’t need to disclose on the MID. These include:
· SORN/off-the road
· Untaxed stock
· Customer vehicles
Any changes to the MID that you request are usually made automatically overnight. When you inform your broker or insurer to add or remove a vehicle from the MID, this is generally then automatically covered on your part-time motor trade insurance policy. You must, of course, maintain a valid motor trade insurance policy for vehicles to be covered.
How to Update the MID Online
If you have a Tradex part-time motor trade insurance policy you can update the MID online. Simply register for the facility and login via the ‘My Policy’ section. The information you will need to update the MID includes:
To register a vehicle:
· Vehicle registration number
· Vehicle value
· Any modifications made to the vehicle
· Vehicle owner/main user
· Vehicle alarm/night security
To Delete a vehicle:
· Vehicle registration number
Tradex will then submit your updates to the MID on your behalf.
Making a Vehicle SORN
As a part-time motor trader, if you want to take a break from your business or have vehicles in storage that are not going to be used anytime soon, you might want to look into a SORN. This is also useful if you are a car restorer and the vehicle is going to be off the road for the duration.
SORN stands for Statutory Off-Road Notification and it is the official way of declaring that your car is officially off the road, that is, you will not be driving it on any public roads. You can, however, still drive in on private land but most people only register to SORN a vehicle if it is going to be sat and unused on the drive or in the garage.
By letting the DVLA know your car will not be on the road, you will receive a road tax refund on anything you have paid on the remaining months of the year.
Also, it is worth noting that a SORN car cannot be parked up on the road outside your house, even if you don’t plan to drive it. Off-road literally means your car is off the road even if it is stationary.
Reasons to SORN a Vehicle
You may have bought a vehicle with the intention of wanting to fix it up or restore it before taking it on the road. There would be no point in going to the expense of taxing the vehicle if it is just going to sit in a garage or workshop for the duration. Depending on your motor trade business or hobby, other reasons to SORN could include:
· Your vehicle isn’t taxed (and you don’t plan to drive it)
· Your vehicle isn’t insured (and you don’t plan to drive it)
· As part of your motor trade business, you plan to break the vehicle down for parts
· You buy a new vehicle but don’t intend to drive or sell it just yet
· Your car won’t be used for a while
You can apply for a SORN online through the DVLA website, over the phone or by post. You will need the V5C to apply for a SORN if you are a new owner of a vehicle. If you do not notify the DVLA that your car is off-road, you will be liable for road tax and could face a fine if it is not paid. You can be fined up to £2,500 if you are caught driving a car that has a SORN.
A SORN will begin immediately if you applied using your V5C reference. Alternatively, if you used your V11, it would start on the first day of the following month. If you apply by post, it is often possible to pick the precise start date.
If you want to end a SORN, you just need to apply to tax your car again. Your SORN will automatically end if you take your vehicle out of the UK.
A SORN does not transfer with car ownership. If you have bought a car with a SORN, you will need to reinform the DVLA that the car is SORN under your name as the new owner.
Some measures it may be useful to take if your vehicle’s period of SORN looks like it will not involve any movement at all (and any driving should only be on private land) include investing in a battery charger to prevent the battery form running down. You should also make sure that the vehicle is kept in a secure garage or workshop to protect it from any extreme weather conditions.