Can Anyone Get Traders Insurance?

We do our hardest to find you a Motor Trade insurance policy that works for you, but due to certain constraints, we (and many other brokers) will be unable to provide a competitive Traders insurance quotation, or even a policy at all, for some traders.

How Getting a Traders Insurance Quote with Think Insurance Works

When you call our UK-based office and speak with a member of our Motor Trade insurance team, you’ll be asked a series of questions about yourself and your business to help us determine whether we can offer you a quote and, if so, where we can find the best Traders insurance quote for you and your company. We’ll match you with one of our specialist Motor Trade insurers using our custom methodology and our understanding of the market. This isn’t always possible, though, due to particular circumstances and limits – here are some of the reasons why:

Motor Trade Insurance Restrictions

Many dealers will have no trouble purchasing a motor trade policy with us; however, other traders may have difficulty finding Motor Trade insurance at a reasonable price. While there may be some challenges in finding the right policy for you, it is not impossible. We try our hardest at Think to find a solution to any problems with acquiring an insurance coverage. The following are examples of this:

Motor Traders with Criminal Convictions

While there isn’t a blanket bar on traders with criminal records getting a Think Motor Trade insurance policy, not all criminal convictions are taken into account. Furthermore, individuals with a history of excessive motoring offenses or driving bans may find it difficult to obtain a competitive insurance rate. You may be able to reduce the cost of your insurance in a number of ways.

If you’re having trouble determining whether or not you’re qualified for an insurance because of your convictions, our sales staff can check into your circumstances and figure out how to get you protected.

Age Restrictions for Motor Traders

We can only insure traders between the ages of 25 and 74 for most Motor Trade insurance products. There are few exceptions, and we can offer Traders insurance to motor traders over the age of 23 through a few select insurers. It may be feasible to renew a Trade Car policy if you are over the age of 74, though buying a new one and beginning from scratch may be tough.

Occupational Restrictions

There are some occupational limits, however they differ from underwriter to underwriter, therefore a full list is not available. Furthermore, if you have previously worked in a restricted field, your eligibility for Motor Trade insurance with some insurers may be impacted. Scrap or salvage-related deals may be more difficult to acquire coverage for, but we do our best to find a solution wherever possible. If you are found to be ineligible, we may be able to provide guidance on how to improve your status.

Residential Restrictions

We can only insure traders in the United Kingdom, and we are unable to offer a Motor Trade insurance policy to traders in Northern Ireland at this time. Furthermore, you must have lived in the UK for at least three years to be eligible for Think Trade Car insurance.

While there are few restrictions on the type of property you can live in, there may be limitations on where you can keep your vehicles on the property. When asking for a quote, you may be asked where you keep your vehicle, and in order to receive the best deal, we recommend analyzing the safest spot on your property for storage. However, don’t be tempted to lie about where you keep your vehicles in order to save money on your insurance! Your insurers can and will investigate, and if they discover that you lied during the quote process, they may raise your premium or even cancel and void your policy, causing you even more troubles in the future.

Driving Licence Requirements for Motor Trade Insurance

To be eligible for a Think Motor Trade insurance coverage, you must have held a full UK driving license for at least one year, or an EU driving license for one year if you have lived in the UK for three years. While having some No Claims Bonus is not required, it is advantageous, and drivers with a history of numerous driving claims (regardless of fault) may be turned down when applying for Traders insurance.

Hobbyists Are Not Eligible For Traders Insurance

If your firm isn’t in the automotive trade, you won’t be able to purchase a Traders insurance policy, but you might be interested in Think’s Business insurance. Furthermore, if you conduct your motor trade activities as a hobby, you will not be eligible for Motor Trade insurance, as only full-time or part-time motor traders can obtain full-time or part-time Motor Trade insurance.

Do I Need Motor Trade Insurance?

You may still be debating whether or not you require Motor Trade insurance. If your business is in any way related to the motor trade, such as being a car dealer, a car jockey, or owning a repair garage, you must have the appropriate insurance. This includes car valeters, mechanics, car dealers, and other similar firms in the automotive industry. Simply put, if you are in charge of a customer’s vehicle(s) or have custody of a vehicle that will be tested, repaired, or sold, you will need a motor trade policy to safeguard your customers, their vehicles, and your business. This is neither a policy for a private individual to cover several automobiles, nor is it for someone whose passion focuses around autos. This is only for firms who generate revenue from working with automobiles.

This obligation does not apply only to Limited Liability Companies. If you are self-employed but still operate a motor trade business, it is critical that you have the appropriate insurance coverage. The sort of Motor Trade insurance coverage you need is determined by the type of business you run and where you run it from. Motor merchants who operate at multiple locations, traders who operate from their house or from a designated place are examples of these elements. Each of these scenarios may necessitate a somewhat different cover level or kind.

To even be considered for a Motor Trade insurance coverage, you must first be able to establish that you are operating a business that generates revenue, such as receipts from automobiles you’ve bought and sold, or documentation proving that you’ve worked on vehicles. By submitting this, you are demonstrating your eligibility for the policy, giving the insurer peace of mind that you are a legitimate motor trade firm and not someone searching for a cheap insurance policy that they wouldn’t be able to acquire on a conventional Car insurance policy.

Tips on Getting a Good Motor Trade Policy

If you’re looking for ideas on how to get a decent Motor Trade insurance coverage, the greatest advise we can provide you is to make sure you know what you want. For one trader, a decent policy might not be enough. You can get a decent Motor Trade insurance policy by understanding what has to be included in a Motor Trade insurance package for it to be suitable for your motor trade firm.

How to Keep Costs Down When Getting a Good Motor Trade Insurance Policy

When buying insurance for anything, you’ll almost certainly be thinking about how much you’re willing to pay. When it comes to insuring your motor trade business, the cost of obtaining a decent Motor Trade insurance policy is something you’ll want to consider carefully, because the cheapest policy may not provide all of the coverage you require.

However, there is a simple method to ensure that a decent Motor Trade insurance coverage does not cost too much: call a professional Motor Trade insurance broker, such as ourselves, to assist you in finding a policy that works for you. We’ll even work with you to create a custom insurance coverage for your company at Think Insurance!

Fit the Requirements for Traders Insurance?

If you meet the criteria for a Think Insurance Traders insurance quotation, we look forward to hearing from you. To speak with a member of our Motor Trade insurance team, click ‘Get a Quote’ below or call 0800 221 8077. They would be pleased to clarify any of the criteria and limits indicated in this FAQ.

Can anyone drive on traders insurance?

A vehicle that is covered by a motor trade insurance policy can only be driven by named drivers. If your partner or spouse needs to use the vehicle for personal or work purposes, you’ll need to add an additional driver to the policy through your insurance broker.

Who can get a traders policy?

You must submit documentation that you work in the motor trade to be eligible for a motor trader policy. You’d be eligible for a motor trader coverage if you run a business that deals with automobiles, vans, or motorcycles and involves maintaining or even selling them.

Can a 20 year old get traders insurance?

Before maintaining or selling a vehicle, it’s critical to get the correct insurance if you’re a young motor trader.

Cheap motor trade insurance for young traders, on the other hand, is difficult to come by. As with your personal auto insurance, insuring a motor trade business as a young person is more expensive. Some insurers do not give traders’ insurance to those under the age of 25.

Can I get a young motor trader policy?

Insurance for young motor dealers is frequently difficult to come by. There are several age groups in which young motor trader insurance is commonly available:

  • If you work in vehicle servicing or repair and are between the ages of 21 and 23, you may be eligible for motor trade insurance. You will be unable to obtain insurance to purchase and sell vehicles in the trade.
  • If you’re above the age of 23, and you purchase and sell cars or work in service and repair, you may be eligible for a traders’ policy, but only a few insurers will cover you.

Before starting their own business, we recommend that young motor traders obtain experience working at a garage or in sales. Motor trade policies for people under the age of 25 can be expensive, so it’s best to learn on the job with an experienced trader first.

Why is motor trade insurance for under 25s expensive?

Younger drivers are statistically more likely to be involved in car accidents. As a result, motor trade insurance is frequently more expensive for new and inexperienced drivers, particularly those under the age of 25.

When a customer car is left in your possession, you are covered under a motor trade insurance coverage. You’ll be driving autos that you wish to sell as well. This entails a higher level of risk than driving your own automobile for social, domestic, or recreational purposes.

Working in the automotive industry usually entails spending more time on the road than driving a personal vehicle. Moving from one vehicle to another is often difficult due to a lack of familiarity. You could be working with a variety of automobiles with different types of engines and transmissions.

Furthermore, telematics boxes cannot be moved from one trade vehicle to another, for example. So, for a young motor trader insurance, there isn’t a solution to reduce risk and save money like this.

When you add it all up, it’s no surprise that many insurers are hesitant to issue motor trade insurance to anyone under the age of 25. Those who do provide insurance usually charge a premium for the service.

tips to reduce the cost of motor trade insurance for under 25s

If you’re seeking for young traders’ insurance, all is not lost. While the number of insurers available to you is limited, and the costs are often higher, there are several things you can do to increase your chances of receiving a traders’ policy:

Having a part-time career buying and selling cars may seem like a smart option if you want to be your own boss. If you’re serious about becoming a trader, however, you should begin by working for someone else. If you want to sell automobiles, start working in a dealership or learn from those who are currently in the service and repair industry. You won’t have to pay for your own motor trade insurance, and you’ll gain essential skills in the process.

As a mechanic working in service and maintenance, young motor traders’ insurance is less expensive than in other “riskier” motor industries, such as purchasing and selling cars. This is because purchasing and selling cars necessitates more time spent on the road. To get experience, work in garages maintaining vehicles to reduce the amount of time you spend behind the wheel.

  • No claims bonus (NCB) – sometimes called as no claims discount (NCD) – can be transferred to your motor trade policy.

If you haven’t made any claims on your private motor insurance, it shows that you’ve started to gather experience and are therefore less of a risk to insurers. You can then look at incorporating this into your motor trade insurance coverage. When you’re just starting out in the business, this is a great way to save money on your premium.

Stick to vehicles with lower-powered engines and less priced models if you wish to sell them. You’re more likely to receive young traders’ insurance if you offer less expensive, popular models.

Pass your driving test and begin gaining experience behind the wheel of your automobile. Avoid accumulating points on your driver’s license and getting into accidents. You’ll be in a better position when you first acquire a quote for motor trade insurance this way.

Can I drive my own car on a traders policy?

You need the correct insurance to fit your demands, whether you use your own car for personal trips or drive automobiles for business.

Private car insurance

When you are the registered keeper and owner of an automobile, private car insurance covers it. When you are named as a driver on someone else’s private car policy or when you take out interim coverage, this does not apply.

Private automobile insurance protects you when you drive for social, domestic, or recreational purposes – in other words, for your own personal, private usage.

The majority of insurance will also cover travel to and from a single workplace (i.e. commuting).

Coverage for business use can be acquired separately. This enables you to drive your own car to business meetings. It does not, for example, cover professional use like as deliveries or motor trade employment. If you wish to use your own car for work, such as a builder’s van, you’ll need a separate commercial vehicle coverage.

  • Third-party only – covers injury claims from the general public as well as claims for property damage. It does not provide coverage for your own vehicle.
  • Third-party, fire, and theft coverage — includes coverage for fire damage to your own car as well as theft.
  • All of the above, plus coverage for damage to your own car, is included under comprehensive coverage.

Some private automobile insurance policies allow you to drive other people’s cars, but only on a third-party basis. With this level of coverage, you will be responsible for any damage to the car you are driving if you are involved in an accident.

Private car insurance only covers the vehicles you own, and usually only one vehicle. Multi-car plans are available at one address, however they are limited to vehicles owned by family members. They are not appropriate for business use.

Motor trade insurance

Road hazards cover is the type of motor trade insurance you’ll require if you’re driving a car. While the driving coverage is identical, it is tailored to motor trade enterprises. As a result, you can:

  • You are allowed to drive cars that you do not own. This lets you to test drive customer vehicles once they’ve been repaired, or move them around your facility. They are insured while in your care, custody, and control, and their own car insurance is not affected.
  • Drive autos that are on their way to or from the trade. If you buy an automobile with the intention of selling it, you won’t want to become the registered keeper because you’ll only have the car for a short time. Up until the car is sold, your motor trade coverage may cover vehicles that are for sale.
  • When customers go for a test drive, make sure you’re covered. If a prospective buyer takes an automobile for a test drive, they must be insured in the event of an accident. This may be covered by your motor trade insurance policy.
  • Use any car that is insured by your coverage. Instead of being limited to a specific make and model, your coverage allows you to drive whatever automobile you want. There will almost certainly be some exceptions, such as high-performance or high-value vehicles. However, under one coverage, you can drive a variety of cars that you may buy, sell, service, or repair.
  • On a single policy, you can name many drivers. This implies that you can add personnel to your policy, such as mechanics and salespeople, to ensure that they are covered to do their jobs.
  • Drive a car that you own for personal use. Your motor trade policy may cover you for social, domestic, and recreational use of vehicles you own. However, this is only a component of your policy; if you don’t work in the motor trade, you won’t be able to cover personal vehicles on your policy.
  • Own a commercial car and drive it (with some policies). A motor trade policy allows some commercial cars to be driven. If you work full-time as a builder and part-time as a motor trader, for example, you can combine your van and your motor trade business into one policy.

Road hazards insurance, like private automobile insurance, offers third-party only, third-party fire and theft, and complete coverage. The difference is that most comprehensive policies only cover the vehicle’s trade value, so if you want complete coverage for a vehicle you own, a private auto policy may still be the best option.

With your motor trade insurance, you can add on extra coverage, such as coverage for tools or your business premises. A private car policy does not provide these benefits.

Switching from private car insurance to motor trade insurance

If you’re just getting started in the motor trade or returning after a break, you may be able to transfer your no claims bonus from your personal car insurance to your business policy.

There are benefits and drawbacks to doing so. It can help you save money on your motor trade premium, but it also means you’ll forfeit your private car incentive if you quit trading.

A trade policy allows you to drive your own vehicle, but you can only get one if you sell cars for a profit.

You can also replicate your private car bonus on a motor trade policy, but this is usually more expensive because you must have your private car insurance in addition to your motor trade policy. However, if you drive a vehicle that isn’t covered by a traders policy, such as a fancy executive car, this can be handy.

What cover do I need – private or trade?

You’ll need a motor trade coverage if you purchase and sell cars, or if you service, repair, or do any other type of commerce with them. You’ll need private auto insurance if you merely want to drive your own car.


Unless your policy expressly states that you are permitted to drive any vehicle, the answer is no. A motor trade policy will almost always come with some limitations. High-performance or luxury cars, as well as certain foreign vehicles, may be excluded. Please contact us if you require coverage for these.

Similarly, some specified drivers, such as inexperienced drivers or those with motoring offences, may have endorsements on their policies restricting their use of certain cars. Examine your insurance thoroughly.

Anyone who owns a car and is insured by personal auto insurance can sell it. If you are a legitimate motor trader, however, not only is this an expensive proposition (since it normally necessitates admin fees each time you change the insured car), but your business activity will also be unprotected. If you sell a few automobiles each year to make money, you’ll require road risks insurance rather than a private car coverage.

You are breaching the law if you do not have traders insurance if you intend to make a profit by buying and selling autos. As previously stated, you will not be classified as a motor trader operating a business if you only sell two or three cars per year (for example, to update your family car or change the model you drive). If you sell cars for a living, even on a part-time basis, you will not be covered by insurance.

Do traders have to tax cars?

Lawgistics, a motoring legal business, has put together a Q&A with answers from the Driver and Vehicle Licensing Agency to the most frequently asked questions about the new Road Fund Licence (RFL) modifications (DVLA).

The RFL modifications went into effect on October 1st, and here is a list of the most frequently asked questions, as answered by the DVLA.

Q. How will a vehicle repairer know if a car is taxed for test drives now that paper tax discs are no longer required to be presented as of October 1st?

A. Check the car tax status at; but, if in doubt, use trade plates for day-to-day business; otherwise, an unknowing repairer could be penalised for driving an untaxed vehicle.

Q. When does it become the new owner’s responsibility to tax the vehicle?

A. Tax must be paid as soon as the consumer purchases a car and decides to become the registered keeper on the DVLA records. They don’t have to wait till the Registration Certificate (V5C) is in their name before they may tax.

Q. What happens to the tax on October 1st if a car dealer has cars in store with current and valid tax? These cars will be ‘in trade’ and have no current keeper.

A. Any car that is currently in the motor trade and has a valid tax disc will be taxed until it is sold. The current tax will be phased out at that point. If the car is recorded as being in the motor trade, no reimbursement will be given. A registered keeper must be listed on the DVLA database in order for a refund to be given. Since 2009, this has been the situation.

A. Yes, by utilizing V5C/2, either online at using the V5C/2 of the V5C, by phone at 0300 123 4321, or in person at a PO branch that handles car tax.

A. Beginning October 1, vehicles transferred to an auction firm will be tax-free. The seller will receive an automatic reimbursement once they notify the DVLA that the car has been sold. Before driving the vehicle away from the auction house, the buyer must tax it using V5C/2, which can be done online or over the phone, as indicated above.

Q. If a dealer has a valid tax disc, may they use current stock as “staff cars”?

A. No, dealers will have to register and tax the vehicle in their own names. If a dealer wants to utilize a vehicle for staff or personal reasons, they must always register it in their name. If the car is utilized for a legitimate “trade plate” reason, the present trade plate laws apply, and the vehicle does not require tax. Visit for further information.

A. Not yet, but the DVLA will do so soon. To tax, you do not need to be the registered keeper, as previously stated. You can start using the updated keeper supplement of the log book on October 1st.

Q. If a registered keeper does not request a refund when selling a car to a motor trader before October, would the outstanding duty be automatically refunded once the DVLA is notified of a new keeper after October 1?

A. Yes, if a new keeper notice is received after October 1st, an automatic refund will be made to the previous keeper.

A. No, SORN is not necessary if the vehicle is registered “in the trade” and kept on private property. A vehicle’s trade plates might be used to indicate its worth.

Q. Will an automobile that is now marked in trade and has a valid tax disc until sometime in 2015 still be valid if it is sold after October 2014?

A. No, the current tax will expire on the day the vehicle is sold after October 1st. The prior keeper will get any tax refunds. The trader must have registered the vehicle in their name by September 30th in order to collect the refund.

A. Currently, there is no method for a dealer to verify this. The DVLA is aware of automobiles stored in trade stock and is looking into how that information may be shared with dealers.

Q. What is the penalty for a registered keeper who drives a car without a proper license plate?

Q. How do you go about selling a PX/trade automobile to a trader who isn’t paying taxes on it?

A. The procedure remains the same. It is not necessary to notify the DVLA. If the vehicle is utilized on the road for test drives, deliveries, or other purposes, trade plates should be applied. A dealer is not required to tax a vehicle in their inventory unless they intend to use it as a staff car.

Q. Since trade discs are being phased out, can we 1) remove the triangular top portion from the front of the plate and destroy it, as we did with ordinary tax discs, on October 1st, and 2) remove the screw-held triangle top section from the back of the plate?

A. After October 1st, there is no necessity to display anything in the triangle holder.

A. No, before a car can be legally parked on the road, it must be registered to a keeper and taxed. If a vehicle is designated as “in trade,” it must be utilized for day-to-day business while wearing trade plates.

Does trade insurance cover uninsured cars?

On a motor trader’s insurance coverage, it is feasible to drive an uninsured car, but that car would then be considered insured. As a result, the response to whether you can drive an uninsured car or other method of transportation at any time simply because you have a trader’s policy is false. The devil is in the details and language of the existing policy you have. Always call your insurer’s hotline if you have any questions or don’t understand something.

Failure to do so may result in legal action being taken against you. What exactly are these particulars? The specifics of any insurance, as well as an uninsured car that you intend to drive and cover under your current policy, will most likely be contained in two subparagraphs. The first is whether you informed the insurer about the inclusion of this car by directly informing them or adding it to the Motor Insurance Database (MID), and the second is the type of vehicle. Is it protected under your coverage, whether it’s under tonnage, above tonnage, or type? Naturally, having the ability to drive any car for a customer is one of the benefits of a Trader’s policy.

Fines, Vehicle Impounded, Destruction?

In most nations throughout the world, driving without insurance is a serious offense. Because of the intrinsic expense of big or even low claims, if the other party does not have proper insurance, it must be retrieved from that person’s finances and assets. Because not everyone has the financial means to pay a claim in this manner, motor trade insurance is required across the board. A common scenario cited by select motor traders is that they were taken off guard by the ambiguity surrounding the ability to operate non-taxed or uninsured automobiles on a temporary or short-term basis. However, if you verify the insurance documentation first, there is no genuine confusion. There may be clauses stating that a vehicle must be registered on the MID before it may be driven or added to your stock / fleet. If this isn’t done, the vehicle isn’t regarded insured on rare occasions.

If the vehicle belongs to someone else and they have insured it but have forgotten to transfer registration, this could be a major issue because the prior owner’s insurance may no longer cover the vehicle. In which scenario, failing to add a vehicle to MID and failing to confirm the registered owner before driving could result in a fine, the car being detained, and the vehicle being destroyed or auctioned if further documentation is not provided.

Can You Drive Any Uninsured Car On Any Trader’s Policy?

There are various circumstances in which you may be in possession of an uninsured vehicle, but you would be unable to drive it, making it of little use to a trader. If a car is deemed stock at a dealership, has a valid Statutory Off Road Notification (SORN), has been off the public roadways since February 1998, or has been stolen, destroyed, or exported, it is allowed to be uninsured. Neither of these scenarios would normally apply to a motor trader, despite the fact that your new fleet car is on its way. To summarize, yes, you can drive an uninsured car that was uninsured before you drove it, but is now insured because your motor trade insurance policy specifies it is. Furthermore, you must have informed the insurer of the addition and/or updated the MID. Trade plates are not provided by an insurer, but they can be covered by specialised trade plate insurance. They allow a trader to register a large number of vehicles for interim use while avoiding paying taxes on each one.

It is illegal to drive an uninsured car without third-party insurance that protects the vehicle while it is covered by the owner. Finally, and maybe most importantly, the vehicle you drive should be dedicated to your motor trade business. Taking Mum to Birmingham in your Dad’s car and driving her back to London would negate that.

Do you need a business for trade insurance?

If your company deals with vehicles, you’ll almost certainly need motor trade insurance.

Coverage is required for auto dealers, mechanics, body shops, breakdown recovery companies, valet parking services, and car restorers.

Then there are the other businesses. Car valeting companies, scrap yards, and even those involved in vehicle repossessions, for example, must examine the hazards they face.

Basically, if your employees have ‘care, custody, and control’ of the vehicles, you’ll need this type of insurance in some manner.

Motor trade insurance will be required for all firms, whether you’re self-employed or run a medium-sized limited company. The same dangers exist.

While certain customers’ policies have been known to cover other drivers on a limited third-party basis in the past, this is less likely today.

Can your company afford to accept that risk in any case? It’s far preferable to have adequate insurance coverage in place to safeguard yourself and your clients.

What age can you get traders insurance?

AGE. The majority of motor trade insurance companies will only cover traders who are 25 years old or older. Younger drivers can be insured on the policy’s vehicles as supplementary drivers, but not as the policyholder.

How do I become a registered car trader UK?

Car sellers aren’t required to be enthusiastic about automobiles. The most critical thing, as strange as it may sound, is that you have a business sense and a keen eye for a good offer.

Starting a vehicle dealership can also be one of the most cost-effective solutions for entrepreneurs, since you can operate as a sole trader from home without having to acquire a business location. If you wish to expand your business, you can buy your own forecourt, form a limited company, and hire employees. In short, becoming a car dealer could be a terrific alternative for anyone who thinks they have what it takes to identify a good deal and turn it into a profitable business.

Know the market

You don’t have to be a total petrolhead, which is correct, but you do need to understand the market. A property developer, for example, doesn’t need to know how to manage the perfect home, but he or she does need to know which types of properties would provide the highest profit.

Make sure you’re up to date on the current car market, taking into account any upcoming changes that may have an impact on sales. The 2030 electric switchover, for example, may be a long way off, but London’s ULEZ is already in effect, and auto dealerships must adjust their inventory to meet the demand for zero or low emission vehicles.

You’ll need to stay on top of changes, which are always occurring. Used car prices are currently reaching all-time highs in 2021, for example, due to a lack of new automobile production. If you somehow missed that crucial piece of information, you’ll soon find out when your consumers begin to shop around for significantly more reasonably priced dealers who have responded to the market.

Know how to sell a car

We’re not simply talking about knowing how to charm a customer. Cars are purchased for a variety of reasons, but the following are some of the most common:

All of these factors influence the ultimate price, therefore you should understand how to value an automobile properly. However, there are more aspects to consider than the ones stated above. While you may think you’ve found a pricing that exactly satisfies these five criteria, there are a number of factors that could force you to rearrange your numbers, including:

A convertible, for example, will sell far better in the summer than it will in the winter. If you reside in a student town, the demand for a car naturally increases when students come in September for the start of the new academic year. Any developments in your area, such as clean air zones, should also be considered. Low-emission and electric vehicles may become necessary for local drivers as a result of these factors. So, whatever price strategy you develop, it must be able to respond to changes and compete with competitors.

Write a business plan

Most businesses must spend money to make money, and auto dealerships are no exception. You won’t be able to sell anything if you don’t have any stock, therefore you’ll have to spend money on cars. This is not a situation where you should go by hunch. Automobile dealerships benefit from modest upfront costs, but every firm must carefully balance its books to be in the black.

When writing your business plan, be particular to your industry, such as vehicle sales. When opposed to, say, owning a neighborhood café, there are a few additional considerations. These are some of them:

Even if your car dealership business is nothing more than you selling vehicles from your home and your stock comprises of a single used automobile, these are things you’ll need to think about from the start.

Choosing a company model is another important aspect of your business plan. Operating as a solo trader may appear to be the best option at first. This means you can run your business under your own name and file a self-assessment tax return with HMRC. As your firm grows, you may want to consider forming a limited company, which will provide you more control by explicitly separating your business and personal money. A limited corporation, on the other hand, necessitates extra paperwork and annual financial reports to Companies House.

Get permission from the council

Selling vehicles from your own house is a simple method to begin your career as a car dealer. However, you must also consider where your vehicle will be parked. If you have space on your driveway, that’s OK; but, if you need to park it on the street while you wait to sell the car, you’ll need to check with the city to see if there is a limit on how many automobiles you may park. It’s also a good idea to check with your neighbors, as there may be restrictions on how many cars you can have or what you can do with them if you live on a private estate (i.e. no carrying out large repair works in communal areas).

Get accredited

Because car mechanics don’t often have the finest reputations, you’ll need the documents to back it up if you want to be viewed as a trustworthy professional. When it comes to purchasing and selling cars, clients can appeal to the Motor Ombudsman to get any issues resolved. By demonstrating that you are accredited with them, you are demonstrating that your company is committed to providing a fair and reliable service. You’ll also have access to support in the event of a disagreement, as well as a profile page to raise awareness of your company and its commitment to providing honest service.

Get insured

It’s one thing to have auto insurance for the car you drive, but if you’re going to be buying a bunch of cars, you’ll need to make sure they’re all insured. There are various types of motor trade insurance, each of which covers different aspects:

  • Comprehensive coverage protects you from damage caused by another vehicle, fire, and theft, as well as any automobile you’re driving, whether it’s a customer’s or your own work vehicle.
  • Third-party, fire, and theft coverage: Protects against damage caused by other drivers, as well as automobile theft and fire damage.

Keep in mind that unless you specifically add it to your policy, motor trade insurance will not cover your personal vehicle.

In addition to standard car insurance, you should consider liability insurance, which protects you from claims made against you and your business by customers or others. You should also think about the following types of liability insurance:

  • Employers liability insurance is required for any employees you hire and protects them from any injuries they may suffer while on the job.
  • Product liability insurance protects you if a customer sues you for a bad product.
  • Public liability insurance covers the costs of any claims made against you by members of the public, such as if they slip and fall on your business premises.

You’ll need motor trade insurance no matter how tiny your business is, though if you’re not a full-time car dealer, you may get ‘part-time insurance’ that just covers your working hours.

Get trade licence plates

Obviously, it is unreasonable to expect an auto dealership to register and tax each and every vehicle that enters their possession, which is why trade license plates are so important. To apply for trade plates, you must have motor trade insurance.

Your license will be valid for a varying amount of time depending on when you apply. You can renew for 12 or 6 months, however this does not mean 12 or 6 months from the date of your application; rather, it means until the next month’s expiry. As a result, if you apply for a 12-month license in March, your license will only be valid for 10 months because the expiration date is December.

Become familiar with car buying options

You won’t be much of a car salesman if you don’t have an automobile to deal with! You may find automobiles to buy in the same way that you would if you were browsing for a personal vehicle. Looking at online listings and approaching private vendors are examples of this. However, as a vehicle dealer, you may choose to go through car auctions, where only professionals will be shopping for automobiles and where you can expect more business-savvy pricing than from a car owner trying to sell for a high price.

Buy a car

Purchasing a car is simple, but obtaining a high-quality vehicle is more difficult. Before parting with your money, you should always perform a few general checks, including:

  • Make sure the automobile is appropriate for your business and area; if you’re in the country, a Smart car is generally not a profitable option.

Sell the car

Now that you have an automobile, you must sell it. Even if it’s only a simple wax and polish, it’s always a good idea to show it some TLC to truly capture the eyes of potential buyers. Make sure your automobile profile is accurate and complete; if the vehicle has any faults, be sure to note them. Any minor flaws, such as scratches, should be addressed before listing the vehicle, since they may help you sell for a higher price. Make sure all of your shots are clear and show the automobile off to its full potential. A automobile can be sold in a variety of methods, including online classified ads, local newspapers, and even a traditional “for sale” sign in the passenger window.

Remember that when you sell an automobile and take payment in cash, you’re taking a chance. Money laundering and counterfeiting may appear to be something that only happens in movies, but it is very feasible for you to become a victim of these crimes. And it has the potential to derail any small business you want to create. Make sure you have ways to take safe payments, which may necessitate paying a card reader’s monthly service and processing costs.