Setting Up A Car Dealership? Choose the right insurance for your business

Setting Up A Car Dealership? Choose the right insurance for your business

Setting up a new business is an enormous endeavour and it’s important to make sure everything is done by the book. Whether you’re looking to sell used or new cars, there are rules and regulations to understand, especially around commercial insurance, so do your research. In this article, we will unpack all the different types of commercial insurance for a car dealership to flourish, including commercial liability insurance and combined insurance.

New Car Dealership To-Do List:

• Location: whether you rent or buy a commercial space, make sure you view it in person before signing the contract.
• Liability & Insurance: Make sure you’re covered for any risks to avoid financial loss. We’ll expand more on this below.
• Licence: Apply for a motor trade license and trade license plates from the government, and complete all paperwork and payments in good time.
• Vehicles: Start building up your stock of vehicles, ensuring you have all the paperwork for each one.
• Recruitment: If you’re looking to hire staff, make sure your application and interview process are robust. You’ll need Employers’ Liability Insurance as well.
• Advertising: Get the word out and plan your business launch day.

Types of Commercial Insurance for Car Dealerships

It’s a good idea to look into the different types of commercial insurance services you can access to make sure you have the right level of protection for your business. Specialist car dealership insurance or car sales insurance types are designed to support this kind of business.

Road Risks Insurance

Road Risks insurance is the standard type of insurance for vehicles owned and operated by your business. This basic cover protects against third-party claims.

Commercial Liability Insurance

All businesses are open to claims from the public, employees and customers if there is reasonable cause. Compensation claims can be made for damage to property or personal injury that occurs at your premises and can cost a business thousands unless you have the appropriate liability insurance in place. Commercial liability insurance policies can cover three types of liability.

Public Liability Insurance

This covers costs if a member of the public sues you for property damage or personal injury that takes place on your business premises, for example, trips, slips and falls. While it is important to have a robust health and safety policy in place, accidents do happen. Public liability insurance covers legal costs if the case goes to court, and can help provide compensation for injured parties.

Employer’s liability insurance

If you have any employees, whether full or part-time, you are legally required to have a minimum of £5 million cover provided by Employers’ Liability Insurance. This protection pays compensation for accidents that occur at work, and not having enough cover could lead to prosecution and fines.

Product liability insurance

Especially if you are selling used cars, product liability insurance could be a serious protection. This type of commercial insurance covers your business against claims that arise due to faults in the product, parts or defective workmanship.

Premises and Contents Insurance

This kind of insurance covers your commercial building and any inventory, equipment and belongings on the premises against damage from fire, flooding or theft. The cost of replacing stolen vehicles can be enough to put your company in the red, but if you are properly insured, your policy will cover the expense.

Demonstration Cover

It’s likely your customers will want to take vehicles out for a test drive before they commit to the purchase, and offering this can increase your sales. Standard vehicle insurance will not cover demonstrations, however, but with specialised demonstration cover, you’ll be insured to pay for any third-party incidents that may occur.

Will I need trade plates for my business?

As a car dealer, trade licence plates can save you paperwork and money. Trade plates are vehicle licence plates for use on vehicles before they are sold. By displaying trade license plates on a vehicle, your staff and customers can drive the vehicle for purposes of test drives or other certain purposes, without the need for registration and road tax.

How Much Does Commercial Insurance Cost for a Car Dealership?

There are many parts your Commercial insurance could comprise. Our commercial insurance services can help make sure you get the best possible deal for your business.
Factors which will affect the cost of commercial insurance for a new car dealership include:

• Location
• Size of dealership
• Track record
• Employee drivers
• Regularity of Staff Training
• Security

The number and types of policies you take out will also impact the cost. It is a good idea to choose combined policies, as these often award a discount compared to taking each policy out individually.

Commercial Combined Insurance

Our insurance brokers work with commercial insurance providers across the marketplace to find the best deals available for our customers. We take all the details of your business and search the market to ensure you don’t miss out on the most appropriate commercial insurance policy for your car dealership. Explore our motor trade insurance offers and get in touch to see how much you could save.