How much does motor trade insurance cost for 21-year-olds?

If you’re taking out Motor Trade Insurance at 21, you’ll need a Young Motor Traders’ policy. This can be a challenge. To find affordable options, most 21-year-olds in the motor trade work for someone else to gain experience. Benefit from the policy being in their employers’ name. However, it’s not impossible. For those starting on their own, young traders’ insurance can be tricky to find at a good premium. Our advisers can help get the right insurance at the right price for your business.

What type of car insurance do I need at 21 years old?

When driving at 21, insurance can be costly, and many people try to save money. Only Third-party car insurance is required by law in the UK. This only covers the repairs to another person’s vehicle or compensation for their injuries. Third-party-only insurance (TPO) won’t pay for repairs to your vehicle or the cost of replacing it if it is stolen.

As well, TPO insurance for under-25s is sometimes more expensive than a comprehensive policy, because insurers pay for a lot of claims on these policies. We recommended taking out the best policy which best mitigates the most risks associated with your business and won’t leave your business in jeopardy should you need to make a  claim.

Motor Trade vs Basic Car Insurance

We specialise in motor trade insurance, and often people come to us with no idea of the difference between car insurance and motor trade. Here’s a quick explanation to make sure you’re in the right place.

While vehicle or car insurance insures you to drive your personal car, motor trade insurance covers named drivers within your business to drive multiple cars and vehicles in connection with the trade. These might be customer cars you’re repairing, valeting, or collecting. If you sell vehicles, it protects you when driving the “For sale Vehicle” when collecting from a garage or auction and returning to your trading premises.

Anyone can get basic car insurance, but only motor trade businesses can take out motor trade insurance policies, this can be done on a full or part-time basis depending on the nature of involvement.

 Does motor trade insurance get cheaper when you turn 21?

Like car insurance, motor trade insurance is cheaper the more reliable the driver is deemed to be. Usually, premiums come down a lot after drivers turn 25, but before you turn 21 it’s unlikely you’ll be considered for a traders’ policy.

 Young motor trade insurance is available for traders under 25. However, different age brackets will find varying options available. For all under 25s, car insurance and trade insurance are often more expensive than for over 25s, due to the general inexperience of the age group.

You only need to take out a motor trade insurance policy if you are the business owner, or if you are self-employed. Many people find working for someone else for a few years gives them valuable industry experience and saves money in the long run.

What Cover Options Are Available For Young Motor Traders?

Under 25, motor trade insurance options may be limited, as not all insurers offer this kind of cover to young people. That is not to say there are no options out there, however. Let’s look at some of the types of trade insurance young people can take out.

Road Risk Only Insurance

This is the minimum cover required for motor trade. You will need road risk insurance if you need to move vehicles which you don’t own, such as customer cars for valet, service or repair, or cars you’re selling. Motor trade road risk insurance does not cover vehicles you own, vehicles necessary for your business to run, such as a mobile repair van, or employers’ or public liability.

Like many other insurance policies, road risk insurance has different levels:

• Third-party only: which covers damage or injury to property or individuals other than yourself and the vehicle you were driving at the time of the accident.
• Third-party, fire and theft: which covers the above, as well as the cost of recovering or replacing vehicles in your possession after theft or fire.
• Comprehensive road risks insurance: all of the above, as well as covering damage to customer vehicles in your care and personal injury claims.

Motor Trade Combined:

As we said above, you generally need to be over 23 to take out combined motor trade insurance. This combines your road risk insurance with other types of policy your business may need, depending on the size and nature of your operations.

Combined policies blend your road risk insurance with other commercial policies such as:

• Premises cover
• Tools and Equipment
• Employers liability
• Public liability
• Loss of MOT license
• And more.

Find more information on Motor Trade Combined Insurance here.

What factors will affect my motor trade premium when I turn 21?

Factors that have an impact on trade insurance prices are related to risk and the potential cost of a claim. Anything that could be expensive for the insurer will lead to higher premiums.

Business Type

Motor traders working with expensive or luxury cars will have higher premiums than those working on older or lower-value vehicles. Whether you’re selling new or second-hand vehicles, providing valet parking, or repairing vehicles, the kinds of cars you working with will impact your premium.

Where You Operate

If you trade from home, then, subject to cover being agreed, the vehicles will also be covered from your residential address. If you trade from a business premises, you may need to purchase premises cover or other policy types in addition to your Road Risk policy to ensure you are adequately covered. In most cases, these are not available until you are 23.

Claims History

Just like your regular car insurance, you’ll benefit from a no-claims discount, which improves year-on-year. This is because years without claims diminish the risk of insuring your business. If you’ve made previous insurance claims, you will likely have to pay more for motor trade insurance as you are considered a greater risk. This also goes for any employees you want to name as a driver on the insurance. They’ll be a risk factor.

Driving Record

Similarly, driving convictions can have you seen as high risk and may negatively affect your premium. There are levels to this: a single speeding fine isn’t likely to have too much effect, but over six points, convictions for driving without insurance or alcohol-related driving offences will leave you with a high motor trade premium. Again, this also applies to employees if you plan to have them drive vehicles.

How can 21-year-olds get cheaper motor trade insurance?

To get the best deal on young traders’ insurance, you can take these steps:

• Protect your no-claims bonus: some insurers will take your personal vehicle insurance record into account when assessing you for motor trade insurance.
• Use your good driving record: a clean license and driving record should have a positive impact on your trade premium.

You can look into how your premium would be affected with another driver on the policy. Potential savings would depend on the age, role and record of that driver. In some cases, adding drivers can increase your premium, so it’s not a foolproof method.

Choose Nash Warren For Young Traders Insurance

Getting young traders’ insurance under 25 can be hard work, and making it affordable is difficult. Our expert team look at options from across the market to find the right level of cover. We’re here to support young traders in getting the best possible deals year after year.