What Is Demonstration Cover?
Demonstration cover is a type of insurance clause that can be added to Motor Trade Insurance policies to allow customers to test-drive your stock before they make a purchase.
Demonstrations and test drives help customers get a feel for the vehicle, increasing the chance of a sale. They are also great opportunities for the salesperson to show off features inside the car.
Because third-party insurance is a legal requirement in the UK for all trips, it is important to make sure you have this coverage in place before allowing customers to test-drive vehicles. If your business is very small, or you are selling your own car, but still want to provide test drives, the customer can take out temporary car insurance for as little as 1 hour.
Demonstration Or Test Drive Insurance For Car Dealerships
Car dealerships that wish to provide test drives to customers should get insurance to cover any damage that may occur during the demonstration. Businesses can choose from Accompanied or Unaccompanied demonstration cover, depending on how they wish to conduct test drives.
Accompanied demonstrations have a staff member in the car, ensuring the potential customer drives safely.
Unaccompanied demonstrations are those in which the customer takes the test drive alone and returns the car.
Unaccompanied demonstrations, for obvious reasons, are often more expensive than accompanied demonstrations as the risk is much higher when a member of your business is not present. Unaccompanied test drive insurance is usually taken out by larger motor trade businesses with their own premises for this reason.
How You Can Reduce Risk During an Unaccompanied Test Drive
Unaccompanied test drives became more popular after the COVID-19 pandemic as social distancing was advised to reduce the spread of germs. Now that many people are more conscious of the risks of airborne infection, being able to offer an unaccompanied test drive can support their decision to purchase. There are ways you can reduce the risks with unattended or unaccompanied test drives, including:
- Carrying out DVLA checks on driving licenses and making sure you see a physical license, don’t rely on photocopies.
- Ensuring you have relevant information about the person, such as credit checks, to verify their identity.
- Fitting trade plates to the vehicle as per DVLA advice.
- Sticking to strict paperwork and data-handling protocols
- Making sure you have the correct insurance for unaccompanied test drives.
- Pros and Cons of Demonstration Cover
- Demonstration insurance provides road risks cover for:
- Use of a vehicle for the purposes of a test drive
- Injury to the driver or third parties and their property following an incident or accident
- Theft of the vehicle (in some cases)
Demonstration cover insures the vehicle to a reasonable distance from the business premises. It is wise to check your policy for the exact details of this distance so that you can make sure you can give appropriate guidelines to your sales team. If the car is taken outside of this distance and is damaged, the insurance will not cover it.
Demo Cover For Motor Trade
Demonstration Cover, sometimes called Test Drive Cover or Demo Cover, is an essential part of motor trade insurance for any car dealership wishing to offer customers the chance to ‘drive before you buy’. At Nash Warren, we are experienced in brokering combined motor trade insurance deals for our clients, gaining the right level of coverage at the best price for you. To discuss adding test drive insurance to your motor trade insurance, contact Nash Warren today.
