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Motor trade insurance
Part-time motor trade insurance is a motor trade policy, usually road risks only, for people who buy, sell, repair or deliver vehicles alongside another job or from home. It matters because a private car policy is not built for trading, and the gap tends to show up after an accident or a police stop.
Part of: Motor trade insurance
In short
There is no legal category of "part-time" motor trader. If you buy vehicles to sell, repair other people's vehicles for money or move vehicles as a business, insurers will usually treat you as a motor trader, however few hours you work. Most part-time traders need a road risks policy that insures them to drive vehicles connected with the trade. Insurers ask for evidence that you genuinely trade, your main occupation, turnover, drivers and where vehicles are kept. Cover is always subject to the insurer's acceptance and the policy terms.
There is no legal category called a part-time motor trader. The law looks at what you do, not how many hours you spend doing it. For vehicle licensing, section 62(1) of the Vehicle Excise and Registration Act 1994 defines a motor trader as a manufacturer or repairer of, or dealer in, vehicles. Regulation 35 of the Road Vehicles (Registration and Licensing) Regulations 2002 adds businesses that modify or valet vehicles. Neither definition depends on whether you trade full time.
For tax, HMRC applies the "badges of trade" set out in its Business Income Manual at BIM20205, including a profit-seeking motive, the number of transactions, work done on an asset to make it easier to sell and a short gap between buying and selling. HMRC's selling online information sheet says you are probably trading if you sell goods you bought intending to sell for a profit. Someone who buys a few cars a year, tidies them up and sells them on is likely to show several of these signs.
Insurers take a similar practical view: if you buy to sell, repair for payment or move vehicles as a business, you are usually a motor trader for insurance purposes. Our guide to how many cars you can sell before you are a motor trader covers the tax and consumer law side, and the motor trader definition gives a short version.
A private car policy is written for social, domestic and pleasure use, sometimes with commuting or business use added. Private policies commonly exclude use in connection with the motor trade, and "driving other cars" extensions, where they still exist, are usually third party only and limited to private use. A car you have just bought to sell is unlikely to be insured simply because you hold a policy on your own car.
The consequences can be serious. Section 143 of the Road Traffic Act 1988 makes it an offence to use a motor vehicle on a road or other public place without insurance that meets the Act's requirements, or to cause or permit someone else to do so. GOV.UK says police could give you a fixed penalty of £300 and 6 penalty points for driving a vehicle you are not insured to drive, and a court can impose an unlimited fine and disqualification. Police can also seize a vehicle they believe is uninsured under section 165A.
Continuous insurance enforcement is a separate rule. GOV.UK's uninsured vehicles guidance says vehicles registered "in trade" with DVLA, or between registered keepers, are excluded, but vehicles you keep for your own use are not. That exclusion from continuous insurance enforcement does not insure anyone to drive the car.
Most part-time and home-based traders start with a road risks only policy. The usual building blocks are below; wording varies between insurers, so treat this as a list of questions to ask.
| Section | What it usually covers | What to check |
|---|---|---|
| Road risks, third party only | Your legal liability to other people when driving vehicles used in your trade | Damage to the vehicle you are driving is not covered |
| Road risks, third party, fire and theft | Adds fire and theft of vehicles you are using in the trade | Theft cover usually depends on key and security conditions |
| Road risks, comprehensive | Adds accidental damage to the vehicle being driven, subject to the excess | Many policies set a maximum value for any one vehicle |
| Customers' vehicles | Commonly included while driven for trade purposes, such as a road test after a repair | Whether your level of cover applies to customers' cars as well as your own stock |
| Trade plates | Use of vehicles under a DVLA trade licence where the policy allows it | DVLA asks for a copy of a motor trade insurance certificate with the application |
| Optional extras | Public liability, tools, vehicles kept at home, legal expenses | None of these is automatic on a road risks policy |
If you later take on a unit, staff or a larger stock, a combined motor trade policy may suit better.
A home-based trader is harder for an underwriter to picture than a dealer with a forecourt, so expect more questions, not fewer:
Motor trade policies are business insurance, so section 3 of the Insurance Act 2015 applies. Before the contract is entered into you must make a fair presentation of the risk, which means disclosing every material circumstance you know or ought to know, or at least enough to put a prudent insurer on notice that it needs to ask more. Leaving out a second driver, a conviction or the fact that you do repairs as well as sales can reduce or defeat a claim. Read more on the fair presentation duty.
Our page on motor trade insurance without premises covers storage and security questions in more depth.
A self-employed electrician buys three or four cars a year at auction, fixes minor faults and sells them online, driving each home on the assumption that his private policy covers him. On the way back from an auction he clips a parked van. If his private policy does not extend to that car or that use, he may have no cover for the van owner's claim and could face prosecution under section 143. The road risks gap scenario walks through a similar case.
Apex arranges motor trade road risks cover for part-time and home-based traders. A broker reads your enquiry and comes back with options, and there is no fee for a quote. Any cover is subject to the insurer's acceptance and the policy terms. To quote, we need to know what the business does, your address and any premises, who drives (ages, licences and points), turnover, vehicle values (your own stock and customers' vehicles) and claims history. Start on our motor trade insurance page.
Often, yes. Many road risks policies are written for part-time and home-based traders, but acceptance is never automatic. Insurers usually want evidence that you genuinely trade, such as purchase and sale records, and they ask about your main occupation, turnover, drivers, claims and where vehicles are kept overnight. Any cover is subject to the insurer's acceptance and the policy terms.
Usually not. Private car policies commonly exclude use connected with the motor trade, and driving other cars extensions, where offered at all, tend to be third party only and limited to private use. Driving without valid insurance is an offence under section 143 of the Road Traffic Act 1988, so arrange cover before you collect the first vehicle.
If you are trading, probably. HMRC guidance currently says you must tell it if your gross trading income in a tax year is more than the £1,000 trading allowance. The government announced in March 2025 that this reporting threshold will rise to £3,000 during this Parliament.
Not as a business in England and Wales. Section 3 of the Clean Neighbourhoods and Environment Act 2005 makes it an offence to leave two or more vehicles parked within 500 metres of each other on a road where they are exposed or advertised for sale, unless you prove you were not acting for a business of selling motor vehicles.
Only if the policy allows it. Many part-time policies are written for named drivers only, and some restrict social use. Your partner usually needs to be named, with their age, licence details, points and claims disclosed, before they drive any vehicle under the policy.
Tell us what your business does, who drives, your premises and vehicle values. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Start a motor trade enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
