How to Cut Costs for Young Drivers’ Motor Trade Insurance

Insurance for motor traders under 25 doesn’t have to be expensive. Generally, less experienced drivers pay more for insurance and have fewer options. Those entering the motor trade industry can find it difficult to get enough cover for the realities of this work. If you’re starting your own motor trade business before you turn 25, getting a good deal on young motor trade insurance can be a huge help. Because motor traders drive customer vehicles and work with the public, it’s important to have the right cover in place for all eventualities. The right price can make a world of difference. Here’s our advice for finding cheap young traders’ insurance.

Don’t Assume Third Party Is The Cheapest

Third-party Road Risk insurance is a legal requirement for all motor traders in the UK. This level covers compensation for injury to others or repairs for their property. It’s the basic level of insurance in both private and trade situations.

However, basic isn’t always the cheapest option, and comprehensive cover may be cheaper for young drivers, so it’s worth checking. Even though comprehensive cover pays out for more situations, it can be cheaper than third-party when you are under 25 because of supply and demand. Insurers know that most young drivers will take out third-party only on the assumption that it is cheap. This group is considered high-risk, and will likely make more claims than others, so the premiums go up to cover the insurers’ costs. This price rise doesn’t always translate to young drivers’ comprehensive insurance, so it pays to check for cheaper options.

Plan Ahead

Even if the monthly premiums are higher, comprehensive insurance can end up saving you money in the long term. If an accident occurs and you only have third-party insurance, the car you were driving is not covered, even if it’s a customer’s vehicle. You would have to pay for repairs to that vehicle out of your pocket. It only has to happen once for you to be spending the money you potentially saved by only having third-party cover.

Set The Excess At A Level You Can Afford

The excess on your insurance policy is the amount that you need to pay before your insurer will cover the remainder of the cost. For example: a mechanic is moving a customer’s car, and accidentally backs into a pole. They have comprehensive motor trade insurance. The cost of repairing the rear panel is £500, and their insurance excess is £250. The mechanic must pay £250 and the insurer pays the other £250. If the excess is £400, the insurance only pays £100. Your insurer will name a compulsory excess, which is the minimum and can’t be changed. There is also a voluntary excess, so-called because you can choose the amount. If you need to make a claim, you pay both the compulsory and voluntary excess.

You don’t have to set a voluntary excess, but doing so makes your motor trade insurance cheaper, so it’s worth thinking about what you can afford to put aside for repairs. Your voluntary excess must be at an affordable level for your business. Too high, and any claims can make huge holes in your cash flow and the business will suffer. Setting your excess too low, however, will lead to a more expensive premium. There’s a balance to strike between what you can afford and what cuts costs.

Add a Responsible 2nd Driver to Cut Costs

Having another driver who is over 25 on your motor trade insurance can build the confidence of your insurer. The other driver must be involved in the business, and it helps if they are over 25. However, if they are under 25, this will likely increase the premium.

Define the types of vehicles you work on

By telling your insurer what types of vehicles you work on, they can be more accurate with their predictions of the cost of potential claims. If you work on luxury cars, for example, claims for repairs or replacements that are your fault will be much more costly than claims for a Transit Van. If your potential claims value is lower than average, your premium will come down.

 Check For Scheme Discounts For Your Trade

Certain trades can get discounts with our motor trade insurance schemes. These vary greatly from year to year, to find out if your business meets the criteria, it’s best to contact a Motor Trade Insurance Broker like Nash Warren.

 Never Auto-Renew. Loyalty Is Expensive

When the policy period is over, you’ll likely get a letter or an email notifying you of the renewal. This will show you the new policy details, and the new premium. You’ll notice the new price is often higher than you were initially paying. The company will argue that this is due to inflation, however, it’s also a case of paying for convenience. This is why working with a motor trade insurance broker like Nash Warren can become beneficial. Each year we can scan the market of insurers, sourcing the best possible quote options available and offering you tailored advice on the right cover to keep your business protected.

Renewing Trade Insurance 23 Days Ahead Might Save A Lot

If you want your insurance to start immediately, the price is higher again. According to the Money Saving Expert, Martin Lewis, the average car insurance policy renewal is cheapest on the 23rd day before the initial policy expires. It gets more expensive the closer to the renewal date you get, even if you have a no-claims bonus.

Lewis doesn’t track the same data for motor trade insurance, but the price patterns generally follow. Check insurance prices 29-23 days before your renewal date and you’ll likely get a better deal than your current insurer would offer on the day.

Finally: No Claims

A long-standing no-claims history lowers your motor trade insurance premium. This is common knowledge, but it applies to those under 25 and it applies to motor traders. You can transfer your private car no-claims to prove to insurers that you’re a responsible driver, which will bring down your costs.

Accidents mean you could lose that no claims history and find your premium increasing rather than decreasing. Many insurance companies now offer a no-claims protection service to keep this from happening, so look into this when you take out insurance.

What Cover Options Are Available For Motor Traders Under 25?

If you’re under 25, you need to find motor trade insurance that works for your business. Here are some of the options.

Road Risk Insurance:

The road risk insurance policy specifies only the driver and is not particular to any one vehicle. This means that you are covered to drive any vehicles you own in connection with your trade and drive customer vehicles, for example, to check repairs or move them from one place to another. Road risk cover often ensures up to the trade value of the vehicle. Consider how many vehicles you need to insure as part of your business operations.

Motor Trade Combined Insurance:

Motor trade combined insurance is a combination of Road risk insurance and other forms of coverage. Sometimes called Traders’ Combined Insurance, this is specifically designed for larger motor trade businesses to cover the many assets and investments you need to run. The policy may include:

• Business Premises Cover
• Vehicle Stock Cover
• Tools & Equipment Cover
• Demonstration Cover
• Product Liability
• Money Cover
• Engineering Inspection Cover
• Management liability Insurance
• MOT loss of licence cover
• Business Interruption cover

Why Choose Nash Warren For Young Drivers Motor Trade Insurance?

Our fully qualified staff are always at hand to assist you with your enquiry ensuring that we continue to provide a personal touch whilst having an excellent market presence. Whilst we use tried and tested methods, our revolutionary insurance is fresh and simple.

We firmly believe that the key to our ongoing success is our dedication to ensuring that we provide our clients with the very best guidance on all of their insurance requirements. Find out how much you could save on Young Motor Traders Insurance.