Whether you are a classic car restorer or collector, enjoy it as a hobby or operate from a business premises, you are likely to have many high-end and extremely rare and expensive vehicles on your premises. Making sure you have the right motor trade insurance in place to keep your assets protected is a top priority.

Car restorer & car collector insurance will offer you protection with high-value vehicles. Tradex covers a wide variety of restoration businesses, with a policy that can be tailored to cover your personally owned vehicles (including classics, everyday cars, vans, motorbikes  and agricultural vehicles), as well as those being demonstrated, tested, delivered to buyers or driven to display meetings.

In addition, even if your vehicle is garaged or kept on your driveway, cars can be subjected to accidental damage. Tins of paint could be accidentally spilled ruining your car’s expensive finish, or tools dropped on the bonnet causing scratches or a dent. Your classic car may also be exposed to fire or even theft if not properly secured.

Here is an overview of car restorer and car collector insurance, with an outline of which vehicles need cover, whether a combined policy will suit you better and what you can do with your vehicle if it is off-road or laid up.

What is Car Restorer & Car Collector Insurance?

Restoring or collecting classic cars can be a very rewarding hobby or profession. It takes great patience and exceptional skill to get a professional outcome that restores a vehicle to its former glory.

A classic car will generally hold a higher value than an ordinary, modern vehicle. Getting the right motor trade insurance is vital if you want to make sure your car, or those that you are working on, are protected from any accidental damage whether whilst working on the vehicle or driving it on the road.

To ensure you and your business do not suffer financially in the event of an accident, it advisable to arrange specific car restorer and car collector insurance.

Fortunately, despite a classic car having a higher value, a motor trade insurance premium tends to be more reasonable than that of a modern business vehicle. This is generally due to the fact that classic or vintage cars are historically very well maintained and tend to be kept in storage rather than on the roads for any length of time.

Classic or Vintage Vehicles?

How do you know if a car is considered classic? Is it all down to the age and, if this is the case, how old does it need to be to qualify? Is the make, model and engine also taken into account?

The classification may differ in other countries particularly the United States, so it is worthwhile doing your research if you are thinking of importing a vehicle.

In the UK, the rules are quite straight forward, a car constructed before January 1st 1974 is exempt from road tax or vehicle excise duty (VED). The government incorporated the VED so that classic and vintage cars are protected as part of this country’s heritage.

According to HMRC, they see ‘classic’ as any car that is at least 15 year’s old and worth over £15,000 or more. For most people, the terms ‘classic’ and ‘vintage’ are synonymous, but they can in fact mean differing things. A vintage car is one that was made between 1919 and 1930. In contrast, a classic car is typically any car that is no longer in production but remains popular, such as a Ford Capri, Vauxhall Cavalier and the Ford Fiesta.

It is worth noting though that different insurance brokers have their own set of criteria for classic car benchmarks, so you will want to shop around to find the best motor trade insurance for your particular vehicle or collection, whether that is vintage or classic.

Included in many insurance company’s criteria of vintage, classic or collector’s cars may be clauses regarding whether the vehicles have been modified, if they are reproductions and replicas or restored classics, modern classics and antiques. Classic vans, haulage, motorbikes and commercial vehicles can also be included within the same type of motor trade insurance cover.

Do I Need Car Restoration Insurance?

Whether you operate a large business or perform services on a part-time basis from home, you are legally required to have a basic level of cover for your motor trade operations to insure both yourself, any employees and potential customers and their vehicles.

Like any motor trade business, if you are working with a vehicle, it is possible that accidents may occur from dents or scratches when moving a vehicle to a fault that may happen due to something you did or did not do.

This means you’ll need the right car restorer and car collector insurance to protect your business from claims.

These could be just some of the reasons why you need a comprehensive motor trade insurance in place when restoring classic or vintage cars. The work can often be wide ranging and very specialist from specific electrical re-wiring, specialist upholstery or interior panelling to tracking down almost obsolete parts that are likely reconditioned.

A comprehensive motor trade insurance policy should be able to cover you for any specific risks car restoring may entail and an experienced motor trade insurance broker such as Tradex will understand what you need to ensure you are fully covered, allowing you to tailor your car restoration and collection policy to your specific business requirements.

Types of Motor Trade Insurance Cover You Will Need

Here are some of the things you’ll need to consider when taking out classic car insurance.

1.     Insurance to drive vehicles: As part of your motor trade insurance policy, you will need a comprehensive road risks insurance policy to cover you when transporting vehicles either for repair, delivery or from a point of purchase. If you are a car restorer or repairer, it is likely you will also need to test drive the vehicle to ensure you have finished the necessary work. If you are selling classic cars, then you may want to also include accompanied demonstration cover which will let any potential clients test drive a vehicle before making a purchase.

2.   The right level of cover for your vehicles: Classic or vintage cars can be more costly to buy, maintain and source parts for than other second-hand vehicles. An experienced motor trade insurance broker will be able to advise on the value of the classic vehicles in your possession to enable sufficient cover when they are parked on your premises, either your own or those vehicles you are restoring.

3.   Cover for tools and equipment: Specialist restorer equipment and tools is likely to be expensive, particularly if you have a garage containing specialist painting spray booths, lifting equipment or vehicle transporters. Parts for classic and vintage vehicles will also likely be expensive and very difficult to replace should it be stolen.

4.   Cover for your premises: To ensure your leased or owned buildings are protected against any damage, fire or flooding. If you are leasing the building, check with your property owner first to find out what insurance they may already have in place, avoiding any duplication.

5.   Employers’ liability insurance: If you have employees (even part-time or casual), then you legally have to put in place employers’ liability insurance. This will protect you should an employee be injured at their place of work. The policy must cover you for at least £5 million and be issued by an authorised insurer. Failure to put employers’ liability insurance in place could see you face fines of up to £2,500 per day until this is rectified. In addition, an expensive lawsuit from an employee could leave your business in a very financially tricky situation. You can also be fined £1,000 if you fail to display your EL certificate or refuse to show it to inspectors upon request.

6.   Public liability insurance: To protect against claims of alleged injury or property damage from members of the public. For example, if you were to knock a cup of coffee all over their expensive laptop or they were to trip over a piece of equipment lying around in your garage and injure themselves, you could be held liable.

7.   Product liability insurance: This type of insurance is also known as sales and service indemnity insurance and if you intend to sell your classic or vintage cars, this type of indemnity is highly recommended. This covers you for any incidents that may be caused after the sale or service of a vehicle in your care. Even after the most careful workmanship and inspection, there is still the chance that something may go wrong. This might not be your fault and could be down to a faulty or defective part but if it causes damage to the vehicle or the driver, there could be considerable costs incurred. Product liability helps to cover any legal claims of injury or damage made against you once the vehicle has been driven from your premises.

A Tradex Motor Trade Insurance Policy can Include:

•      Cover provided for permanently owned road vehicles, also  for those being tested, worked on, demonstrated, delivered or driven to any display meetings.

•      Cover whether you restore vehicles as a hobby at home or work from a business premises.

•      A car restorer & car collector insurance policy can be tailored to cover personal vehicles.

•      Tradex provides cover for premises, storage and refurbishment as well as fixed plant machinery, tools and office contents.

•      Vehicles can be covered while away at sub-contractors premises.

•      Inclusion of apprentices and young members of the team for driving vehicles on a motor trade usage basis.

•      SORN vehicles and those being restored can be covered for fire, theft and accidental damage.

•      Bonus boosters to help those with no bonus to accrue a year’s no claims discount on a six-month policy when used on a later full-term policy.

•      Liability insurance including public, product and to protect employees.

•      Family vehicles can be included for social domestic and pleasure and other business or professional uses disclosed in the policy.

Motor Trade Combined Insurance

If you work from a business premises that is not your home address, a combined motor trade insurance policy will cover you for the areas mentioned under one policy.

A motor trade combined insurance policy will include a comprehensive road risks insurance policy together with protection for your stock, building and contents.

If you are working from home or car restoring part-time or as a hobby, you may find road risks insurance will offer sufficient protection for your needs. But it is worth researching other areas of insurance that may benefit you against, for example, accidental damage. It may even be possible to include laid up insurance instead of road risks if your car has a SORN.

What is Laid Up Insurance?

If your classic or vintage car has a SORN as you are keeping it in storage or are still undergoing restoration work, it is recommended that you have a laid- up insurance policy that can protect your valuable asset from accidental damage, fire or theft.

This type of motor trade insurance will protect your vehicle (or collection of vehicles), and its spare parts and accessories whilst they are being stored in a locked garage or building. Vehicles kept on driveways can also often be accommodated for laid up insurance cover provided they remain secure. This does not include on-road parking as your vehicle would need to be taxed and insured for this purpose.

Things you need to know when insuring your classic car on a laid up insurance policy:

•      Motor trade insurance cover includes accidental damage together with fire and theft as standard on a laid up policy.

•      Your insurance premium will reflect the fact that your car is not being driven on the road and will therefore be lower as you will not be paying additional fees for comprehensive insurance cover.

•      A laid up motor trade insurance policy should still cover you If you are temporarily transporting your classic or vintage vehicle to have some body work done or a re-spray. You will need to alert your insurance broker in advance so they are aware that you will be moving your vehicle and find out exactly what cover you will have in your policy to protect your vehicle or what temporary cover would be available.

•      Newly imported vehicles are often able to be covered on a laid up scheme once they have cleared customs. This is essential if you are then planning on trailering your vehicle from the terminal to its destination.

A Word About SORN

Your vehicle always has to be insured unless a Statutory Off-Road Notice (SORN) has been made. This informs the driver and the Vehicle Licensing Agency (DVLA) that you are registering a vehicle as off the road. Having made this notification, you must keep your vehicle off of public roads.

A SORN is useful if you intend to spend the winter months giving your car some much needed maintenance after summer driving or you have taken on a new restoration project.

If you own a vehicle and you have no intention of driving it on the road for some time, you should inform the DVLA and register the vehicle as being off the road. By declaring a SORN, you can avoid paying both vehicle tax and road insurance.

If your car is off the road, you cannot just stop paying tax and insurance without applying for a SORN. You could be fined £80 for failing to tax a car if it hasn’t been declared SORN.

A SORN car may mean you do not have to pay tax and road insurance, but that does not mean it is advisable to remove all insurance protection. It is not currently a legal requirement to have insurance on a vehicle declared as SORN but this would be a sensible precaution against any accidental damage, fire or theft. It is advisable to insure your vehicle under a laid up policy whilst off the road.

You can find out more about declaring your vehicle as SORN by visiting https://www.gov.uk/make-a-sorn.

It’s also useful to know that under a laid up insurance policy, your insurance broker will not add  your vehicle to the Motor Insurers Database or MID. Therefore, a SORN notice means that, as well as not driving on a public road, you will not be able to park it there either. It will have to be kept on private land, such as your driveway, or in a garage or out-building.

Taxation and Insurance Premiums

It is important that you are aware of the significant tax criteria associated with classic cars and the motor trade.

Tax exemption for classic cars is now rolling. This means that from April 1st every year, cars produced more than 40 years before 1 January of that year are normally exempt from paying Vehicle Excise Duty (VED) or road tax.

In addition to this, since May 2018, nearly all cars built more than 40 years ago do not need to pay for an annual MOT, though it is recommended that you still have your car regularly checked for its roadworthiness if you intend to take it out for a spin. Most insurance brokers will want to check maintenance of the vehicle before offering any motor trade insurance.

A large difference between conventional car insurance and classic car insurance is the perceived valuation of the vehicle itself. Everyday cars will depreciate over  time, while classic cars generally appreciate in worth, particularly if they are well-restored and looked after properly.

Older cars are also generally cheaper to insure. Insurers view classic car owners as safe drivers who like to take their vehicles out in mild weather, avoid night-time driving and spend little time on the road, so do not tend to cover many miles.

In summary, according to the Gov.uk website:

Classic and vintage vehicles that do not need an MOT include:

•    Vehicles built or first registered more than 40 years ago. (“Ditch your modern car for a more cost-effective classic?”)

•    Vehicles that have not undergone any substantial mechanical changes during the past 30 years. This is generally anything that changes the way the vehicle operates and could include replacing the chassis, body, axles or engine.

Vehicle exempt from vehicle tax include:

·    Vehicles built before 1 January 1982 can stop paying vehicle tax from 1 April 2022. If you are not able to find out when your vehicle was built but it was registered before 8 January 1982, you do not need to pay vehicle tax from 1 April 2022.

·    You must still tax your vehicle even if you do not have to pay. You will face the risk of hefty fines if this is not put in place.

·    Your vehicle will not be exempt from vehicle tax if it is used for hire or reward (for example, if you are considering using it as a taxi with paying customers) or if it is used commercially for a trade or business, such as weddings, ceremonies, prom parties or deliveries.

·    Eligible vehicles include cars, vans, motorcycles and tricycles as well as specialist vehicles including steam vehicles, agricultural machines, road rollers, work trucks, mobile cranes and pumps.

You can apply for a vehicle tax exemption at your local post office and will need to take the following documentation:

·    The logbook (V5C) in your name

·    Your vehicle tax reminder letter (V11), if you have one

·    An MOT certificate that is valid when the tax starts, or evidence if your vehicle is exempt from an MOT

Tradex has decades of experience in motor trade insurance with experts in car restoration and car collectors whether for a hobby or as part of a commercial enterprise. Getting the right individualised cover is essential if you want peace of mind knowing your specialist vehicles are insured against all eventualities.