Do I Need Motor Trade Insurance Cover for selling used cars in the UK?

If you sell cars in the UK then you may need some form of insurance cover, whether it’s an insurance policy specifically for motor trading or a regular Motor Car insurance policy. Whether you’re selling vehicles from your drive at home, or you are a dealership with designated premises if you don’t have the correct Motor Car insurance cover for your business then you might be at risk of not being properly covered for motor trading in the United Kingdom, which could result in a loss of business or property. Whatever type of motor trading business you are, you must have the correct Motor Car insurance policy, and if you don’t you may not be properly covered and could end up being out of pocket if you need to make a claim.

You Might Need Motor Car Insurance Cover for Selling Used Cars

Depending on how many cars you sell, you may be eligible for a Motor Trade insurance policy of one kind or another, and this is usually a monthly figure which rules out almost all hobbyists. For example, if every few months you sell your car on for a profit, such as buying a convertible in the winter and selling it in the summer then you would not qualify for a Motor Trading insurance policy. Similarly, if you fix up cars to then sell them on, which you’d want insurance cover for, and only complete a project every few months you also wouldn’t be eligible.

Part Time Motor Trading in the United Kingdom

If you do meet the minimum motor trading requirements highlighted in the paragraph above, and pleas note that minimum requirements may differ from each Motor Trade insurer, then you could be eligible for a Part Time Motor Trading insurance policy for selling used cars. However, this insurance cover is only available for traders who also have another occupation besides motor trading. You may also be counted as someone who needs Part Time Motor Trade insurance if you are retired and are selling used cars to top up your pension.

Full Time Motor Trading in the UK

If you are trading the required number of cars a month then you should be eligible for Motor Trading insurance cover. If you are eligible for an insurance policy for your motor trading business then that doesn’t necessarily mean that you’ll have a dealership. You could be selling used cars full time and still be doing it from your driveway, maybe a farm or even a gated plot on an industrial site with a portacabin as an office. To be classed as undertaking motor trading activities on a full-time basis all you need to be doing is trading a certain number of cars a month.

Insurance Cover for Your Dealership

Following on from the section above, in which the topic being a full-time motor trade in the UK is discussed, we’ll be discussing insurance cover for a dealership. An insurance policy for a dealership in the United Kingdom is going to be a lot more complex than an insurance policy for a full-time trader that operates from their driveway. This is because a dealership will need insurance cover for a number of additional things such as the dealership building itself. A dealership selling used cars is more likely to have employees working for it than someone who sells cars from their farm, therefore Employers’ Liability insurance will be required.


The more advanced your motor trade activities become, then the more advanced your insurance policy for selling used cars should become too. A trader operating from just their driveway, who meets the minimum requirements for an insurance policy for a part time motor trading may only need the basic Motor Car insurance cover that comes with a Motor Trade insurance policy, in addition to Demonstration cover to allow prospective customers to test drive a vehicle. However, as their business grows, then their insurance policy will need to reflect said growth,which could mean adding things like Stock of Vehicles cover to their insurance policy. To conclude, not one insurance policy for motor trading in the United Kingdom is like another, so always make sure you get the right one to suit your business and the activities you carry out.