When it comes to Motor Trade Insurance we’re often asked what level of cover, or indemnity as it’s referred to, do I need? Well that depends on what you do in the trade. A mechanic, for instance, may need a totally different level of cover from a valeter. We’re going to try and help you decide.

First off, if you’ve only got a cheap run around yourself it may be better to split your indemnity. i.e A car jockey (with a £3.5k Mondeo) could have £5k of cover on his own vehicles and £25k for customers. This works out a lot cheaper than just having £25k of cover for both his own and customer’s vehicles.

Then it may depend, lets say if you’re a salesman, on what type of cars you specialise in. Do you need £20k worth of cover if you generally sell 10yr old Fiestas? Probably not, and remember if you start out with a low indemnity you can always increase it later on in the year if you need to.

On the other hand, a Ferrari valeter would probably want a very high level of indemnity. You may find that some customers require proof of suitable comprehensive cover before they allow you to take their pride and joy. Specialist policies can extend road risks cover to £100k and over in certain circumstances. These policies, though, can be a little bit more expensive than the average because of their nature.

Some may just need Third Party Only. A motor trader who specialises in breaking cars and salvage vehicles might not need anything more extensive. Their only real risk would be for the vehicle they were driving as the vehicles they collect or dismantle might not be worth much and would be on the back of their truck – also for this type of motor trade business a lot of trade insurers will only give Third Party Only.

Purchasing a level of indemnity is a calculated risk on your behalf. Unlike a private car policy the responsibility for how much cover you want rests on your shoulders. An example – you’re a mechanic and you drive people’s cars. One day you crash a customer’s vehicle (your fault) and do £8k worth of damage, but you’ve only got £5k of cover. The insurance will only pay out a maximum of £5k so what about the rest? Who pays the £3k leftover? That’s right, you!

Remember, a good broker can help and advise you on what levels of Motor Trade Insurance you need. They should be able to find you a policy that fits your needs, rather than make you fit the policy. If in doubt always seek professional advice.

Think Insurance – Quality, Service and Price

So, you’re ready to become a motor trader? Have you thought how much it costs to set up? As a Motor Trade Insurance specialist we’re privy to lots of gripes about the rising costs within the industry. Hopefully we can list some of these for you today so you don’t get too many unexpected shocks.

Website – a slick, user friendly website seems to be a must these days. Most of us haven’t got the time or expertise to set up our own, so we have to pay someone else to design and maintain it. It really pays to shop round here – have a look at some other websites they have done and haggle on the price.

Stock – you will need money to buy your initial stock. The amount of cash required depends on your circumstance and ambitions.

Insurance Cover – this can be anywhere from £300 for basic cover to several thousand for an all singing, all dancing, combined policy. Remember to ask your broker for some advice as to what you do and don’t need so you can save money.

Security – how is your stock protected? Do you need premises? When the vehicles are at the premises how are they secured? Your insurance company will want decent levels of security to cover vehicles there. CCTV, metal fences, an alarm, or the vehicles being kept indoors will all help. P.s just an alarm contract can cost over £50 a month!

Trade Plates – if you need these you’ll have to get them off the DVLA and they charge! Trade plates cost approximately £165 but they may also ask you for a presentation as to why you need them.

Advertising – where should you advertise and how much does it cost? It’s worth researching this before you dive in. The usual suspects are Autotrader, Ebay and local publications.

Finally, here are a list of other things you may of missed – Utility bills, rent, council rates, phone bill, fuel, cleaning products, an accountant/book keeper.

We hope this is helpful for you, and please remember we can help with your Motor Trade Insurance aswell.

Think Insurance – Quality, Service and Price

All motor trade insurance policies on the market today carry restrictions – a fact that may of not been explained to you when you took out the policy! Here we are going to look at some of the more common exclusions and restrictions that may be hiding in your small print.

1)      Performance/Sports cars – whilst most policies will cover GTI’s and the like, that’s where trader’s insurance policies can really start to differ from each other. Some will exclude vehicles over a certain group, whilst others may restrict engine size or even specific models – eg a Subaru impreza (one of the most feared cars by insurance companies!).

2)      Multi-Seated Vehicles – most policies will restrict seating capacity in some way or another. Whether it’s an 8 seat restriction or a 16 seat minibus restriction make sure you’re covered for what you think you are.

3)      Modified/Kit Cars – some companies will cover these no questions asked but others shy away from them like from a plague! Third party only is common on these vehicles.

4)      Classic Cars – most policies cover classic cars but they probably won’t pay out what they’re worth! A classic car is only worth what someone is willing to pay – and unfortunately an insurance company will generally undervalue a vehicle over 20yrs old.

5)      Commercial Vehicles – many policies restrict to under  3.5 Tonne unless you pay more – but be aware some policies exclude vans altogether!

I hope these points can help with your motor trade insurance in the future. Remember – if you don’t ask you don’t know!

Think Insurance – Quality, Service and Price

Car sales are up in November! Industry figures from the Society of Motor Manufacturers and Traders (SMMT) have shown a near 60% increase in sales compared with November 2008. New car sales have now increased month on month for the last five. There were 158,082 cars registered last month and this year 1.84 million cars have been sold – a fall of just 8.8% from the same period in 2008.

The scrappage scheme introduced by the government has played a key part in this according to people in the trade. Under the terms of the scrappage scheme any vehicle over 10yrs old can be traded in for a £2000 discount against a new model.The government announced in September the car scrappage scheme would carry on to the tune of £100m.

The SMMT puts the new cars registered increase down to the scrappage scheme and the fact that purchasers are trying to avoid the upcoming VAT rise by buying now. Although critics say that the market is being sustained by the scrappage scheme, optimists in the motor trade are hoping that these recent figures are pointing to an economy at least on it’s way to recovery.

I guess the proof is in the pudding and we’ll find out who’s right shortly after the end of the scrappage scheme & the raise in VAT. Let’s keep our fingers crossed!