Motor trade insurance: a cost-saving guide

Motor traders may be in for lean times ahead. According to forecasts published by the Society of Motor Manufacturers and Traders (SMMT) on the 1^st of November 2017, new car registrations in 2018 are expected to peak at 2.426 million vehicles – which is 5.4% down on the output for 2017 (itself a reduction on the previous year).

If the estimated decline in motor manufacturing proves accurate – which is by no means certain – motor traders may be faced with a prolonged squeeze on profits. In a story dated the 7^th of December 2017, Motor Trade News claimed that the average dealer had experienced losses of some £2,000 in operating profits in October of that year.

Saving money on essential overheads – such as your motor traders’ insurance – is likely to be the order of the day. So, here are some money-saving tips and suggestions:

Motor trade insurance brokers

• although there is a multitude of potential sources, you are likely to find that specialist motor trade insurance brokers offer policies carefully tailored to your specific needs and circumstances and at a keenly competitive market rate;

Drivers

• an essential feature of motor trade insurance for any car dealer is the ability for any of your staff to drive any vehicle (yours or your customers’) in the course of your business;
• saving money on your insurance, therefore, involves keeping your list of named drivers accurately up to date – so that all relevant employees are included, but not those who no longer need the cover or are former employees;

Insuring your premises, vehicles and equipment

• insurance for motor traders may also extend to the premises used by your business, your vehicles (and those owned by your customers), together with the tools and machines on which your workshops depend;
• save money on your insurance by making sure that the total sums insured are sufficient to cover the risks (and the possible need for complete reinstatement of replacement) without overinsuring these critical assets;

Public liability insurance

• a risk often overlooked, but may prove to be an expensive oversight or a false economy if you fail to arrange sufficient indemnity is public liability insurance;
• this component of your motor traders’ insurance protects you against claims made by customers, visitors to your premises, neighbours and even passing members of the public who may have been injured or had their property lost or damaged in the course of your business activities;
• it may include customers’ losses alleged to have been caused by your defective workmanship;
• claims – especially if someone is injured – may be very substantial and it is common for any motor trading business to arrange at least £1 million of cover, and large-scale dealers to have £5 million or even £10 million of indemnity;
• ensuring you have the level of cover appropriate to your scale of operations may save you money;

Employers’ liability

• if you have any employees – drivers, sales or administrative staff – the law demands that you have a minimum of £5 million employers liability insurance;
• save yourself possible fines of £2,500 a day by ensuring that your motor traders’ insurance includes sufficient employers, liability cover.

Specialist motor trade insurance brokers may provide advice and guidance on each of these elements of cover while ensuring that the competitive rates they offer also help you to save money.