Motor trade wiki

Trade plates

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

Trade plates are registration plates issued with a DVLA trade licence that let a motor trader or vehicle tester use an unlicensed vehicle on the road for limited trade purposes. They are not insurance, which is a common and costly misunderstanding.

Part of: Motor trade insurance

In short

A trade licence, issued by DVLA under the Vehicle Excise and Registration Act 1994, lets a motor trader or vehicle tester use one vehicle at a time on the road without the vehicle itself being taxed, for purposes set out in the Road Vehicles (Registration and Licensing) Regulations 2002. Permitted uses include testing, test drives for prospective buyers, delivery and moving vehicles between premises. Plates cannot be used for general carriage of goods or passengers for hire or reward. The vehicle must still be roadworthy and insured.

Legal basis

Trade licences are created by the Vehicle Excise and Registration Act 1994. Section 12 limits the holder to using no more than one vehicle at any one time under the licence, and only for purposes prescribed by regulations. The detailed rules are in Part VII of the Road Vehicles (Registration and Licensing) Regulations 2002 and Schedule 6, which set conditions on the licence and list the permitted purposes.

Who can hold trade plates

DVLA's VTL301 application form says motor dealers, motor traders and vehicle testers can apply, meaning businesses that sell, manufacture or repair vehicles, or test other people's vehicles on public roads. Businesses that only collect or deliver vehicles qualify only if that is their sole activity or they also manufacture or repair vehicles. What counts as a motor trader more generally is covered in motor trader.

Permitted purposes and restrictions

Under Schedule 6, permitted purposes include:

Testing or trials of the vehicle or its equipment.
A test or trial for the benefit of a prospective purchaser.
Delivering a vehicle to where the purchaser intends to keep it, and demonstrating it at handover.
Moving vehicles between premises, to workshops, auctions, storage or testing.

VTL301 says plates must not be split across vehicles, used by another person, displayed on parked vehicles, or used on a vehicle registered in the holder's name (except a manufacturer's research and development vehicles). Goods may be carried only in limited cases, such as a test load. Misuse can lead to an excise penalty under section 34 of level 3 on the standard scale or five times the duty chargeable, whichever is greater.

Trade plates and insurance

A trade licence deals with vehicle tax and registration. It does not insure anyone. Section 143 of the Road Traffic Act 1988 still requires insurance for use on a road, and VTL301 says vehicles used on trade plates must be roadworthy, insured and have a valid MOT or MOT exemption. The application asks for a copy of a motor trade insurance certificate in the applicant's name.

A road risks policy usually provides that insurance, subject to its terms on drivers and use. See also compulsory motor insurance.

Sources

Frequently asked

Do trade plates mean the vehicle is insured?

No. Trade plates relate to vehicle tax and registration. The vehicle still needs insurance under the Road Traffic Act 1988, usually through a motor trade road risks policy, and DVLA's application asks for a motor trade insurance certificate.

Can I use trade plates on my own car?

Generally no. DVLA's VTL301 form says you cannot use a trade plate on a vehicle registered in your name, with an exception for manufacturers' research and development vehicles. Trade plates are for vehicles in the trade.

Can a customer test drive a car on trade plates?

The 2002 Regulations list a test or trial for the benefit of a prospective purchaser as a permitted purpose. The vehicle must still be insured for that driver, and some motor trade policies restrict who may drive on trade plates.

Can I use one set of trade plates on two vehicles at once?

No. Section 12 of the Vehicle Excise and Registration Act 1994 limits use to one vehicle at any one time, and DVLA says a set of plates must not be split across vehicles.

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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.