Motor trade insurance

Trade plates: DVLA rules and the insurance you need

Reviewed by the Apex broking team · Last reviewed 2026-10-27

Trade plates are DVLA plates issued with a trade licence, letting motor traders and vehicle testers use vehicles temporarily in their possession on the road for set purposes. They matter because misuse is an offence, and trade plates never insure anything on their own.

Part of: Motor trade insurance

In short

A trade licence, issued by DVLA under section 11 of the Vehicle Excise and Registration Act 1994, lets motor traders and vehicle testers use vehicles temporarily in their possession on public roads for prescribed purposes, such as road tests, delivery to a buyer and trips to a workshop. You cannot use plates on a vehicle registered in your name, on a parked vehicle or for carrying goods, except specified loads. The vehicle must be insured, roadworthy and have a valid MOT or an exemption. DVLA asks for a copy of a motor trade insurance certificate with each application.

The legal basis

Trade plates come from a trade licence under section 11 of the Vehicle Excise and Registration Act 1994. For a motor trader who is not a manufacturer, the licence covers vehicles that are "temporarily in his possession in the course of his business as a motor trader". For a vehicle tester, it covers vehicles submitted for testing. Vehicle excise duty is paid on the licence, so each vehicle does not have to be taxed individually while used under it.

Section 12 limits what the licence allows: one vehicle at a time per licence, only for purposes prescribed by regulations, and no keeping a vehicle on a road when it is not being used there. The detail sits in Part VII of the Road Vehicles (Registration and Licensing) Regulations 2002 and Schedule 6, which sets out the conditions of the licence and the permitted purposes.

Who can apply

Section 11(1) allows a motor trader or vehicle tester to apply, as well as a person who satisfies DVLA that they intend to start business as one. The definitions are in section 62(1):

Motor trader: a manufacturer or repairer of, or dealer in, vehicles. Regulation 35 of the 2002 Regulations adds businesses that modify vehicles, including fitting accessories, and businesses that valet vehicles.
Collection and delivery: a business consisting wholly or mainly of collecting and delivering vehicles is treated as a dealer, provided it does nothing else except manufacturing, repairing or dealing.
Vehicle tester: someone other than a motor trader who regularly, in the course of business, tests other people's vehicles on roads.

The application is made on DVLA form VTL301. DVLA's notes ask for a copy of a motor trade insurance certificate showing motor trade cover, in the same name as the application, and say not to apply more than 10 days before the date you want the licence to start. Duty is payable at the rate DVLA sets, which can change at a Budget. If you are not sure you qualify, our motor trader definition sets out the tests.

What you can use trade plates for

Plates may only be used for the purposes stated on your application. Paragraphs 10 and 11 of Schedule 6 limit a motor trader to business purposes connected with manufacturing, repairing, dealing in, modifying or valeting vehicles. DVLA's VTL301 notes list the permitted uses, which include:

testing or trialling a vehicle, or its accessories or equipment, during or after construction, modification or repair;
a test drive by a likely buyer, including the return journey;
delivering a vehicle to the place where the buyer intends to keep it, and demonstrating it at handover;
moving a vehicle between parts of your premises, or to or from the premises of another manufacturer, repairer or dealer;
travelling to or from a workshop for fitting, painting, repair or valeting (not a drive-through or public hand car wash);
travelling to or from a garage, auction room or other place where vehicles are stored or sold;
travelling to or from a public weighbridge, a place of inspection or testing, or a place for breaking up;
collecting a vehicle under repossession.

Customer test drives are a permitted use, but your policy must also cover the customer as a driver. See test drive and demonstration cover.

What you cannot do

Rule	Source
Use plates on a vehicle registered in your name	DVLA VTL301 notes
Use more than one vehicle at a time on one licence	VERA 1994, s.12(1)
Keep a vehicle on a road when it is not being used, including parking on plates	VERA 1994, s.12(1); VTL301 notes
Carry goods, other than specified loads such as a test load, parts for fitting, or a vehicle used to travel to or from a delivery or collection	VERA 1994, s.12(3); 2002 Regulations, Sch. 6 para 13
Carry passengers, other than people carried in connection with the permitted purpose	2002 Regulations, Sch. 6 para 9
Use a vehicle that is unroadworthy, uninsured or without a valid MOT or exemption	DVLA VTL301 notes; RTA 1988, s.143
Let someone else display your plates, split a set across vehicles, or use altered, damaged or illegible plates	2002 Regulations, Sch. 6 paras 2, 3 and 5; VTL301 notes

Plates go on the front and rear of the vehicle (rear only for motorcycles), outside the vehicle and readable from 20 metres. DVLA's notes give maximum fines of £5,000 for false declarations, fraudulent use or letting someone else use the plates, and £1,000 or five times the duty, whichever is greater, for displaying plates for a purpose that is not permitted.

The insurance you need

A trade licence deals with vehicle excise duty and registration marks. It does not insure anyone. Section 143 of the Road Traffic Act 1988 still requires insurance for using a vehicle on a road or other public place, and GOV.UK says the penalty for driving uninsured can be a £300 fixed penalty and 6 points, or an unlimited fine and disqualification in court.

In practice that means a motor trade policy, usually road risks or the road risks section of a combined policy, that:

covers use under a trade licence, which many motor trade policies do, subject to their terms;
names or describes the person driving, including employees and any customer on a test drive;
covers the type and value of vehicle on the plates;
is in the same name as the trade licence.

Insurers commonly link cover to the permitted purposes, so a journey outside them, such as a personal trip on plates, may leave you uninsured as well as in breach of the licence. See who can drive on a motor trade policy for driver rules.

Common mistakes

Using plates as personal transport. Driving home in a stock car for the evening, or to the shops, is not a permitted purpose.
Leaving a car parked on plates. Section 12 of the 1994 Act does not allow a vehicle to be kept on a road under the licence when it is not in use.
Plates on your own registered car. DVLA says you cannot do this.
Lending plates to another trader. This breaches the licence conditions, and DVLA's notes give a maximum fine of £5,000 for allowing plates to be used by another person.
Carrying passengers or goods. Friends along for the ride, or a boot full of parts for another job, fall outside the rules.
Names that do not match. DVLA's notes say the name on the motor trade insurance certificate must match the name on the application.
Assuming the plates insure the car. They do not. Check the policy covers trade plate use and the driver.

The road risks gap scenario shows how a use outside the policy can play out. Our trade plates definition gives a shorter reference version.

How Apex helps

Apex arranges motor trade road risks and combined policies. Tell us if you use trade plates so the enquiry reflects it. A broker reads your enquiry and comes back with options, and there is no fee for a quote. 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.

Sources

Frequently asked

Can I use trade plates on my own car?

No. DVLA's trade licence guidance says you cannot use a trade plate on a vehicle registered in your name. A trade licence covers vehicles temporarily in your possession in the course of your motor trade business, under section 11 of the Vehicle Excise and Registration Act 1994, not your personal vehicle.

Can I park a car on trade plates?

No. Section 12 of the Vehicle Excise and Registration Act 1994 does not allow a vehicle to be kept on a road under a trade licence when it is not being used there, and DVLA's notes list displaying plates on parked vehicles as not allowed. Keep vehicles off the road between journeys.

Can a customer test drive a car on trade plates?

Yes, a test drive by a likely buyer is a permitted purpose in DVLA's notes. Your motor trade policy must also cover the customer as a driver, and many insurers set conditions, such as licence checks or accompanied drives. Cover is subject to the insurer's acceptance and the policy terms.

Do I need motor trade insurance to apply for trade plates?

DVLA asks for a copy of a motor trade insurance certificate showing motor trade cover, in the same name as the application. If you do not have one, its notes ask you to explain why and give your Companies House registration number. Other types of insurance certificate are not a substitute.

Can I carry passengers on trade plates?

Only people carried in connection with the permitted purpose, such as a prospective buyer on a test drive or someone assessing the vehicle. Schedule 6 to the Road Vehicles (Registration and Licensing) Regulations 2002 excludes carrying any other person, and DVLA lists carrying passengers for hire, reward or personal purposes as not allowed.

Get a motor trade insurance quote

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.

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Apex 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.