# Motor Trade Insurance for New Dealers: What Insurers Check

> Why new dealers struggle to get motor trade insurance: one test is about you, the other about your premises. What underwriters check, and what helps.

- Type: Blog article
- Publisher: MYDEALERSHIPVIEW (https://mydealershipview.com)
- Author: MYDEALERSHIPVIEW
- Published: 2026-10-08
- Last updated: 2026-11-01
- Canonical page: https://mydealershipview.com/blogs/motor-trade-insurance-new-dealers

## Getting Motor Trade Insurance as a New Dealer: The Two Questions Every Underwriter Asks

Most people starting out in the trade expect motor trade insurance to be expensive. Fewer expect to be told no, or to be quoted a figure that makes the business plan fall apart before the first car is bought. The reason it catches so many new dealers out is that "motor trade insurance" sounds like one product with one price. In practice an underwriter is answering two separate questions, and you can pass one comfortably while failing the other.

The first question is about you. The second is about where and how you trade. Understanding which one is causing the problem is usually the difference between giving up and finding a workable policy.

## Question one: is this person insurable to drive and trade?

This is the individual side of the risk, and it follows you wherever you trade from.

**Age.** Age bands vary by insurer, but a common pattern is that road risk cover becomes available from 21, while buying and selling cover, premises cover and liability cover generally open from 23. Under 21, getting covered at all can be difficult. A 22 year old can therefore find they're insurable to drive vehicles on the road but not yet to run the business they actually have in mind.

**Driving and criminal record.** Points on a licence don't automatically rule you out, but the type, number and age of the offences all count. Some criminal convictions can make trade cover very hard to obtain, and anything involving fraud usually closes the door entirely.

**Experience.** Insurers want evidence you're genuinely trading, such as invoices, stock records or a business registration. That creates a frustrating loop for someone who hasn't started yet. The usual ways through it are documented experience working in a garage, sales or prep role first, or starting with a narrower policy and building a record.

**Who else will drive.** Most motor trade policies are named driver policies, where each person who can drive is listed and their cover is limited to their actual role in the business. Any driver policies exist, but they are usually offered by specialists, cost considerably more and tend to require an existing motor trade no claims record. Every added driver adds risk and therefore cost.

One trap deserves to be stated plainly. Naming a son, daughter or partner as an employee to get them covered, when they don't genuinely work in the business, is insurance fraud. It can lead to the policy being cancelled or declared void, which is a far bigger problem than the premium you were trying to reduce.

**Dealer takeaway:** if you're being refused or quoted silly money, check whether the issue is you or the business. A clean, experienced driver with a young second driver on the policy may simply be paying for the second driver.

## Question two: is this premises and operation insurable?

This is the side many new dealers don't see coming, because it has nothing to do with how well they drive. It matters as soon as you hold stock somewhere you're responsible for, which is also the point at which a road risk only policy stops being enough and a combined policy starts to make sense.

Underwriters typically want to know:

**Where you trade from.** A separate site and a home address are rated differently, and the postcode's crime and flood risk both feed in.

**How the site is secured.** Boundary walls or palisade fencing, gates, roller shutters, a maintained alarm (especially one monitored by a central station) and CCTV that stores footage off site or can be viewed remotely all count. Higher cover limits usually come with stricter security conditions.

**Where the cars sit overnight.** Inside a unit, in a secured compound and on open ground are three very different risks.

**Where the keys are.** This sounds minor and isn't. Many policies require keys to be kept off site overnight, in a safe or in a proper lock box. Keys left in vehicles or on a hook in the office are a common reason a theft claim runs into trouble.

**What you sell and how the public meets it.** High value and luxury stock is rated differently from older, cheaper cars. A showroom with public access carries more exposure than a closed yard visited by appointment.

**Dealer takeaway:** before you ask for a quote, walk your site as an underwriter would. Fencing, key storage and an alarm are often cheaper to sort than the premium loading for not having them.

## How the answer changes with your stock

The two questions apply to everyone, but the weight shifts with what you sell.

A dealer holding twenty cars at £5,000 to £10,000 has a lot of stock by count but a moderate value per vehicle. The conversation tends to centre on total stock value at the site, general security and how many people need to drive.

A dealer holding six high value performance cars may have the same total value or more, concentrated in far fewer vehicles that are more attractive to thieves. Expect harder questions about where each car is stored, how keys are controlled, whether test drives are accompanied and who is allowed to drive what. Expect the individual question to tighten too, because some insurers restrict younger or less experienced drivers on higher powered vehicles.

Neither profile is harder to insure as a rule. They are hard in different places, and knowing which applies to you makes the conversation with a broker much more productive.

## Part time is a separate test from being a motor trader

Many people begin trading alongside another job, and part time motor trade policies exist for that. They can be cheaper, but they come with stricter eligibility and limits, typically on the hours you trade or the number of vehicles covered at once.

The point that catches people out is that this is the insurer's definition of part time. It is not the same test HMRC and DVLA apply when deciding whether you're trading at all. You can be a motor trader for tax and registration purposes while holding a part time insurance policy. What you can't safely do is grow past the limits of that policy without telling the insurer. If your hours or volumes change, the policy needs to change with them.

## Trade plates and employers' liability: two points to get right early

**Trade plates do not replace insurance.** Any vehicle displaying trade plates must be insured, roadworthy and have a valid MOT or exemption, and plates can only be used for the purposes stated on your licence application. Regular trade plate use can also increase your premium, so declare it accurately. Our [trade glossary](https://mydealershipview.com/blogs/uk-used-car-trade-glossary) covers what trade plates are; the insurance detail is where dealers tend to come unstuck.

**Employers' liability is a legal requirement once you employ staff.** Under the Employers' Liability (Compulsory Insurance) Act 1969, most employers must hold it, and businesses can be fined up to £2,500 for every day they're not properly insured. Public liability isn't legally required, but trading without it, with customers walking around a site full of vehicles, is hard to justify. Our [dealership compliance guide](https://mydealershipview.com/blogs/dealership-compliance-guide) covers the wider set of obligations.

## If you rent your site, read the lease before the policy

When you rent a yard or unit, the landlord usually insures the building and recovers the cost through the rent or service charge. That doesn't cover your stock, your fixtures or your lost income if the site can't be used. Those are yours to arrange, and vehicles held for sale need to be covered specifically rather than assumed to sit under general contents. We cover the detail in who insures what when you rent a yard.” Keep the existing link on “who insures what when you rent a yard **[who insures what when you rent a yard](https://mydealershipview.com/blogs/renting-a-yard-who-insures-what)**.

## Bottom line

A refusal or an unworkable quote is rarely the end of the road. It usually means one of the two questions is failing. If it's the individual question, the answer tends to be time, experience, fewer or different drivers, or a narrower first policy. If it's the premises question, the answer is often physical: security, key control, how cars are stored and what the public can access. Work out which one it is, and you know what to fix.

## You don't have to work this out alone

We work with a network of independent dealers, from £5,000 to £10,000 family stock up to high value performance cars, who are happy to share what they've learned with the dealers we partner with, from setting up a site to the questions insurers ask. Alongside that, we help partners research questions like this one properly and, for new businesses, we provide design specs for branding so the business looks established from the first day.

If you're setting up, [talk to us about partnering with MYDEALERSHIPVIEW](https://mydealershipview.com/partner). For the wider picture of starting out, see our guide to [how to start a used car dealership in the UK](https://mydealershipview.com/blogs/how-to-start-a-used-car-dealership-uk).

_This article is general information, not insurance advice. Policy terms, age limits and eligibility vary between insurers, so check the detail with a broker who specialises in the motor trade._

## FAQs

**Why is motor trade insurance so hard to get as a new dealer?**

Because insurers assess two things: you as a driver and trader (age, record, experience, who else drives) and your premises and operation (location, security, key storage, stock type). New dealers often lack a trading record on the first and haven't yet secured a site to the standard insurers expect on the second.

**Can I get motor trade insurance under 25?**

Often yes, but with limits. A common pattern is road risk cover from 21, with buying and selling, premises and liability cover generally from 23. Under 21 it can be very difficult, and younger drivers usually pay more.

**What is the difference between named driver and any driver motor trade insurance?**

A named driver policy covers only the people listed, each for their role in the business, and is the most common type. An any driver policy lets anyone drive, subject to restrictions, but is usually much more expensive and tends to require an existing motor trade no claims record.

**Do I need combined motor trade insurance or just road risk?**

Road risk covers driving vehicles on the road. Once you hold stock at premises you're responsible for, you'll generally want combined cover, which adds protection for the premises, the stock on it and liability.

**Is part time motor trade insurance cheaper?**

It can be, but it comes with limits on hours or vehicles, and not every insurer offers it. If your trading grows past those limits, tell your insurer.

---
Source: https://mydealershipview.com/blogs/motor-trade-insurance-new-dealers
Index of all pages: https://mydealershipview.com/llms.txt