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Is part-time motor trade insurance cheaper?

4 minutes

If you’re weighing up your insurance options as a motor trade professional, you might be wondering, “Is part-time motor trade insurance cheaper than full-time insurance?” Here, we look into the insurance implications of running your motor trade business on a part or full-time basis. 

Let’s get started.

How much is motor trade insurance in the UK?

Standard motor trade insurance is designed to protect anyone operating in the motor trade industry, including car dealers, mechanics, restorers, and rental agents. Like other forms of insurance, how much you pay will depend on a number of factors, including:

  • The size and nature of your business, including whether you provide services, sales or both
  • The location of your premises, and whether you operate from a commercial property or from your home
  • Your claims history
  • The number of people you employ, including part-time staff, contractors, and volunteers
  • The number of people named in your policy
  • The ages of these drivers
  • The type and value of vehicles you work with
  • Any required add-ons, such as business interruption insurance, liability insurance, or demonstration cover

Read more: How much is motor trade insurance?

Is part-time motor trade insurance cheaper than full-time insurance?

Before we look into the cost of part-time insurance, let’s define it. What is part-time car business insurance?

If you operate your motor trade business in a part-time capacity, this means it’s not your full-time occupation. It could be work you undertake for a few hours a day or week, only occasionally, or as a side business or hobby.

Part-time car business insurance, or part-time motor trade insurance, is a specialised type of coverage designed to provide protection for these part-time activities. It caters to a wide variety of part-time car professionals, including weekend car sellers, part-time mechanics and auto technicians, seasonal vehicle traders, and hobbyist car restorers. These policies typically cover the vehicles your business owns, your customers’ vehicles while they’re in your possession, third-party liability, and tools and equipment. 

So, is it cheaper?

Generally, yes, part-time insurance is usually more affordable than full-time motor trade insurance. But the exact cost difference can vary from policy to policy and from insurer to insurer. Part-time motor trade insurance is often less expensive because:

  • You have a lower risk exposure: As a part-time trader, you spend less time on your business activities, and insurers will generally consider you a lower insurance risk as a result.
  • Your coverage might be limited: Part-time policies may have restrictions on the number of vehicles covered or the hours you’re permitted to work. 
  • Your liability is reduced: With fewer transactions and less time spent working, your liability is lowered.

But there are exceptions. Not every insurer offers a part-time policy, which can reduce how competitive these prices can be. And some insurers have minimum premiums in place that will apply regardless of whether you run your business on a part or full-time basis. 

It’s also possible that your individual circumstances — including where you live, your driving history, and the types of vehicles you work with — might raise your premiums instead.

The only way to know for sure is to compare quotes from multiple providers to find the best deal for your unique circumstances. You could also ask an experienced broker to help.

What's the difference between part-time and full-time motor trade insurance?

Part-time policies are designed to suit smaller, occasional traders who don’t make a full-time living out of their motor trading activities. Full-time policies, on the other hand, cater for larger operations with higher traffic and turnover. The policies for these two types of work differ in a number of key ways:

  • Eligibility criteria: Part-time policies tend to have stricter eligibility requirements to ensure that you’re genuinely operating your business on a part-time basis.
  • Coverage hours: Part-time insurance typically covers your business activities for a limited number of hours per week, while full-time policies provide round-the-clock protection.
  • Vehicle limits: Your part-time policy is likely to restrict the number of vehicles it covers at any given time. Full-time policies will generally allow for you to work on more vehicles simultaneously.
  • Flexibility: Part-time policies may offer more flexible terms to accommodate different work patterns. But they might have some restrictions on the types of business activities they permit.
  • Additional coverage: Full-time policies often include or offer more comprehensive add-ons like business interruption coverage or larger liability limits. 

Whether your business is scaling down or ramping up, make sure you speak to your insurer about how these changes are likely to affect your insurance. The most important thing is that your business activities are properly protected.

Do I need part-time motor trade insurance if I only sell a few cars a year?

It's possible to sell a car or two in your private capacity without having dedicated trade insurance. But if you're doing it regularly for profit, even at a low volume, it's a good idea to have part-time insurance in place. Both the DVLA and HMRC will consider you a motor trader if you’re earning an income off your motor trading activities. 

Under the Road Traffic Act, it's also illegal to use a car on public roads without proper insurance. And regular car insurance doesn't cover vehicles you're selling as part of a business activity, which means that motor trade insurance is your best bet. 

Part-time motor trade insurance also covers important areas that personal car insurance doesn't, including test drives, vehicle storage, and potential claims against your business or employees.

Quickfire summary

Part-time motor trade insurance is generally cheaper than full-time insurance. Because you’ll inevitably work fewer hours and likely handle fewer vehicles than a full-time business, insurers will generally consider you a lower insurance risk.

However, you might have to shop around for the right part-time insurance policy. Part-time motor trade insurance isn’t offered by every insurance provider, and many insurers charge minimum premiums for their policies, whether you work part time or not. 

Contact several insurers as you search for the plan that’s right for you, or speak to the team at Howden. Our wide range of motor trade insurance policies can be adapted to protect you and your unique motor trade business. Get a quote today.

Also read:

MORE MOTOR TRADE INSURANCE GUIDES

Part-time Motor Trade Insurance FAQs

Can I drive any car with motor trade insurance?

Unfortunately, no, you can’t drive any car simply because you have motor trade insurance in place. While this type of insurance does give you permission to drive a number of different vehicles, there are exclusions. For example, you might find that your insurance doesn’t cover you for high-value or high-performance cars. You should be able to drive cars that are owned by you, your business, or your customers, provided they aren’t excluded in the fine print outlined in your policy.

Does engine size make insurance more expensive?

Typically, cars with larger engines are more expensive to insure than cars with smaller engines. Insurers often view cars with bigger engines as higher risk because they're generally more powerful, potentially faster, and statistically more likely to be involved in accidents. These vehicles are also usually more expensive to repair or replace. 

That said, engine size is just one factor among many that your insurer is going to consider. Other factors like your age, driving history, location, and the car's overall value and safety features also influence your insurance premiums. 

Can I get part-time motor trade insurance if I have points on my licence?

Yes, you can typically get part-time motor trade insurance with points on your licence, but it may be more expensive and potentially more difficult to obtain. Insurance providers will consider the nature and number of your points, how recent they are, and your overall driving history before deciding whether you’re eligible. Minor offences might have a minimal impact, while more serious violations could increase your premiums or limit your options. 


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