What Is a Motor Trader?

A motor trader is someone who works in the motor trade, which means they work with cars, bikes, vans or any other type of vehicle. This can be anything from repairing vehicles, selling vehicles, moving vehicle to cleaning vehicles. A motor trader could also be known as a mechanic if they fix & repair cars, or they could be referred to as a car salesperson is they sell cars, or if they just replace old, worn or damaged tyres on a car then they may simply be known as a tyre fitter. A motor trader doesn’t have to have one sole discipline, they may offer multiple motor trade services including fixing and then selling on vehicles.

Why Does a Motor Trader Need Insurance?

Motor traders operating in the United Kingdom will need a Motor Trade insurance policy, and not a standard business insurance policy, for the same reason that any regular motorist would need an auto insurance policy, so that they can legally drive vehicles on UK roads. Although not all motor traders will need to, the majority will, whether it be for testing and diagnosing problems, demonstrating their stock, or picking up and delivering cars to and from customers. The exception to this is typically any valeter operating from their own premises, however if they owned their own vehicle it would benefit them to get it insured on their motor trader policy instead of having separate auto insurance and business policies.

What’s the Difference Between Auto Insurance and Motor Trade Insurance?

A regular auto insurance or Car insurance policy typically covers an individual and members of their family to drive one car, unless they have a multicar or family fleet policy, in which case it can cover several cars within the household. A Motor Trade insurance policy however allows the insured to drive multiple cars that they may use for their motor trade business, plus the cars brought to them by the customers to fix, clean, move/store or sell. The motor trader also has the ability to add and remove cars to and from their policy through an easy to use online portal, meaning they can make sure any new vehicles they get are quickly covered by their insurance. A Motor Trade policy also includes the option to insure other aspects of the business that the motor trader may deem important, including things like the premises they operate from (as long as it’s not their home), and stock they hold, tools and equipment, and various liability covers such as Public Liability and Employers’ Liability.

Why Doesn’t a Motor Trader Have Business Insurance?

While some insurance elements from a business insurance policy can also be found in a Combined Motor Trade insurance policy, it does not have the crucial aspect of covering both the cars and the business which are typically required for a motor trade policy. A motor trade policy should be seen as a combination of Business insurance and auto insurance, with added ‘motor trade specific’ elements to the cover. A motor trader may well take out a business insurance policy if they do not intend to drive on the road, however if they did have a car they would need a separate auto insurance policy, and would probably not be allowed to drive it for business purposes relating to their motor trade occupation.


Hopefully, what we’ve learnt in this article about being a motor trader and how auto insurance works for a motor trader, and why they don’t have regular Business insurance. Hopefully if you now plan to enter the motor trade industry as someone in the car sales business or maybe you hope to become a mechanic, you now have sufficient knowledge of the insurance policy you would need to make sure you are correctly insured instead of blindly taking out a Business insurance policy and leaving yourself potentially under covered, or not covered at all!