03 December 2024
27 Tips on how to get cheaper motor trade insurance
6 minutes
Wondering how to get cheap motor trade insurance? This essential coverage is designed to protect your business, the vehicles you work on, and your staff and customers, but it doesn’t have to break the bank. The following tips will help you find the right kind of insurance to suit your budget.
Let’s get started.
How to save on motor trade insurance: 27 tips
Not all of the tips below will apply to your unique situation, but it’s worth going through them carefully and evaluating those that are relevant. Combining a few different ideas will almost certainly help to reduce the premiums you pay.
Structuring your policy
- Choose the right level of coverage
The level of coverage you choose will always affect your premiums. So, which type of motor insurance is cheapest? Road risk insurance is often the most affordable, as it only covers you for the road aspects of running a motor-related business. On the other hand, combined motor trade insurance, which includes both road risk insurance and liability insurance, is more comprehensive but also more expensive.
If you need comprehensive coverage, you can try and reduce your fees by avoiding unnecessary extras. Consider what your business really needs and remove add-ons that don’t apply. You can always include them in future as your business grows.
- Pull your policies together
Packaging different types of coverage into one policy is often more cost-effective than maintaining separate policies. So if, in addition to your combined road risk and liability insurance, you also need premises or tools insurance, speak to your insurer or broker about placing them under one umbrella policy.
- Opt for a higher excess
Increasing your voluntary excess often lowers the premiums you pay. However, it’s important that you can comfortably manage to pay this excess if you need to make a claim. Be sure to run the numbers beforehand.
- Pay annually
While monthly payments might seem convenient, paying your premium annually often results in significant savings. Insurers typically charge interest on monthly instalments.
- Build your no-claims bonus
A strong no-claims bonus can dramatically reduce your premiums over time. As far as possible, do your best to maintain a clean claims history.
- Keep your claims to a minimum
As part of building up your no-claims bonus, be conscious of not claiming for small issues that you can afford to repair or replace yourself. Regular claims are also likely to increase the excess you pay.
Organising your business
- Demonstrate your experience
Insurers generally offer better rates to established businesses with proven track records. If you’ve been working in the industry for a while, make sure you discuss your relevant experience with your insurer when you take out your policy.
- Conduct regular risk assessments
Conduct and document regular risk assessments of your business operations. Being able to show this information to your insurer will reassure them that you handle risk management professionally.
- Obtain professional accreditations
Consider applying for industry accreditations or joining organisations that are relevant to your business. These credentials can demonstrate that you’re invested in the long-term future and success of your business, and can potentially reduce your premiums.
- Build strong insurer relationships
Maintain good communication with your insurer or broker. Strong relationships can lead to better terms and more flexible coverage options.
- Maintain a good credit rating
Keep your business credit rating healthy. Some insurers will investigate your credit score when calculating your premium.
Managing your vehicles
- Limit the value of the vehicles you work on
Are you working on high-performance, luxury, rare, or classic vehicles? If not, setting a reasonable maximum value for the vehicles you work on can reduce your premiums. Speak to your insurer about a range that’s reasonable for you.
- Limit your mileage options
Consider a limited mileage policy if you’re unlikely to be spending extended periods of time on the road for business purposes. If you provide valet services, for example, you probably won’t travel as much as someone who provides roadside assistance. Informing your insurer of your road exposure can lower your premiums.
- Keep accurate vehicle records
Maintain detailed documentation of all the vehicles under your care, including condition reports and photos. This organised approach once again demonstrates your professionalism to insurers, and can be useful if you ever have to sort out any disputes.
- Consider installing telematics
For road risks coverage, consider installing telematics into your vehicles. This technology proves to insurers that you and your staff are driving your cars safely and responsibly, which can reduce your premiums.
Securing your premises and vehicles
- Choose your business’s location carefully
If you’re only just starting your business, or you’re relocating to a new spot, consider the area’s crime statistics and environmental risks carefully. Running your business from a high-crime area, or where there have been floods or subsidence problems in the past, can negatively impact your insurance premiums.
- Maintain your premises
Keep your business premises in good repair. A well-maintained property suggests that it’s being run professionally and can positively influence how your insurer calculates your fees.
- Improve your on-site security
Well-lit, secure premises typically qualify for lower insurance rates. Install perimeter fencing, security lighting, CCTV, and reinforced doors. Having immobilisers and alarm systems on the cars you will likely help, too. Of course, this isn’t only important for your insurance costs, but for the safety of your vehicles and staff as well.
- Ensure your vehicles are stored safely
Wherever possible, store the vehicles you own and the vehicles you work on in secure, off-road locations.
Managing your staff
- Select your drivers carefully
Take the time to carefully vet the staff who work for you. Do your best to ensure that they have clean licences and extensive experience. Your insurer will definitely assess this as part of their evaluation processes.
- Conduct regular licence checks
Implement regular driving licence checks for all staff. This not only helps to ensure that your staff don’t have penalties you’re unaware of, but also demonstrates proactive risk management to your insurer.
- Implement age restrictions
Consider implementing minimum age requirements for the staff who drive your cars. Excluding new drivers can reduce your premiums substantially.
- Introduce staff training programmes
Regular staff training, including guidance on security protocols, safe driving, and vehicle handling, shows insurers that you take the safety of your staff and vehicles seriously.
Prioritising policy administration
- Make accurate declarations
Always be honest and accurate in your insurance declarations. Incorrect information could invalidate your coverage and lead to higher premiums in the future. Depending on the severity of the incorrect information you supply, some insurers may refuse to insure you.
- Shop around annually
Don't automatically renew your insurance with your current insurer — allowing your insurance to roll over can often trap you into higher premiums. Compare quotes from multiple providers, ensuring you're comparing like-for-like coverage, before deciding on the right option for you.
- Regularly review your policy
Review your policy regularly to ensure it still matches your business needs. Take the time to go through it carefully, removing any unnecessary coverage and adjusting any limits.
- Use specialist brokers
Work with experienced brokers who have a good track record and specialise in motor trade insurance. Their expertise and market relationships can often help you secure better rates.
What is the average cost of motor trade insurance?
Motor trade insurance costs can vary significantly depending on a number of key factors, including:
- The type of business you run (mechanic, car dealer, valet service, etc.)
- The types of vehicles you work on
- The level of cover your need (road risks only or a combined policy)
- Your claims history
- Your years of experience in the trade
- The number of employees who need coverage
- The location of your business
- The size of your premises
- The security measures you have in place
- Your annual turnover
As you might imagine, small, home-based businesses will pay significantly less than large dealerships, which makes it very difficult to provide an average cost. For the most accurate pricing, source several quotes from multiple insurers, weighing up what works best given your needs and the budget you have available.
Quickfire summary
There are many ways to lower your motor trade insurance. While implementing some of the strategies outlined above might require an initial investment of time and sometimes money, the long-term savings on your insurance premiums can make them well worthwhile. Remember to regularly review and adjust your approach as your business evolves.
For further help, contact Howden. Our team of industry experts specialise in comparing and sourcing many motor trade insurance policies based on the information our clients provide us. We can also offer insurance insights, giving you a clearer and better understanding of how your policy could benefit you and your business. Give us a call on 0330 008 4960 or get a quote today.
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