Customer vehicles on test drives

For traders regularly moving customer cars, TPFT often looks cheaper initially. One own-damage claim on a customer vehicle during a test drive removes that saving very quickly. This came up repeatedly in 2025, particularly with dealers who had TPFT and assumed accompanied test drives were covered. They aren’t, for own damage.

Vehicle value limits exceeded by performance or import stock

A trader buying standard vehicles at £6,000 to £8,000 may suddenly purchase a £40,000 performance import at auction. If vehicle limits remain unchanged, any claim above the policy limit leaves a significant shortfall. The insurer pays to the limit. The trader funds the rest. This catches people by surprise every time.

Incorrect part-time declarations

Full-time policies and part-time policies are different products. Traders who upgraded activity volume without telling the insurer, or who took a full-time policy while trading part-time, found claims disputed on misrepresentation grounds. Accurate declaration at the start is the only way to avoid this.

Undeclared imports and restricted categories

Traders who handled Japanese imports, grey market vehicles, or performance cars without updating the insurer had claims declined on the basis the vehicle type wasn’t within the declared risk. Not a grey area. Standard policies have explicit category restrictions and value limits that apply per vehicle.

Missing demonstration cover

Several dealers discovered at claim time that demonstration cover wasn’t included as standard on their policy and hadn’t been added as an extension. Accompanying a customer on a test drive without it, and then having the customer cause damage, left them personally liable for the repair.

It depends on your cover level. If you have comprehensive road risk with demonstration cover, yes, damage to the vehicle during an accompanied test drive is covered. If you have TPFT only, no. TPFT doesn't cover accidental own damage, which includes damage to a customer's vehicle in your custody during a test drive. This is one of the most practically significant differences between TPFT and comprehensive for dealers, and it catches people out more than almost anything else.

• →Also check that demonstration cover is specifically included on your policy. It's not always standard. Without it, even comprehensive road risk may not respond to a test drive incident

Yes. Collecting stock from auction is one of the core activities road risk is designed to cover. Vehicles bought at auction and driven home, whether on their own plates or on trade plates if they're untaxed or unregistered, are within the scope of the policy. The vehicle must be within your declared vehicle value limit, and it must be driven for trade purposes, not personal use. If the vehicle's value is higher than your standard limit, notify your broker before collection, not after something goes wrong.

If you're driving vehicles you don't own for the purpose of buying and selling them, yes. The number of cars isn't the determining factor. Whether you're doing it as a commercial activity is. Personal car insurance doesn't cover motor trade activity, regardless of volume. Three cars a year still needs a trade policy, specifically a part-time motor trade policy if you have other employment. Selling cars without any trade insurance cover is driving without valid insurance during those journeys.

For fire and theft, yes, under TPFT or comprehensive road risk, a stock vehicle parked outside your home is typically covered while in your custody. For accidental damage while parked, only comprehensive applies. The 400-metre premises exclusion that appeared in older policies has been removed by most modern providers. If your policy is older, confirm this restriction isn't present. What road risk doesn't cover is the vehicle as static stock, in the same way a commercial property policy would cover stock at a business address. That distinction matters if you're building a stockpile of vehicles.

A part-time motor trade road risk policy. Not a full-time policy. Part-time policies are specifically designed for traders who have primary employment elsewhere and trade on a limited basis, typically fewer than a defined number of vehicles per year. Using a full-time policy when you're part-time is a misrepresentation. Getting a full-time policy and only trading part-time doesn't cause problems, but it does cost more than necessary. The part-time declaration also means your primary employment and that vehicle must be separately insured for non-trade use.

It depends on the insurer and the specific vehicle. Some markets are comfortable insuring traders who handle performance cars or Japanese imports as part of their regular activity. Others restrict or exclude certain categories. Tell the insurer upfront. A claim on a vehicle type you never mentioned is a claim that will be disputed. Specialist motor trade brokers with the right market access will find options that standard comparison routes won't surface.

Yes, it makes a material difference. MT NCD is built on a motor trade policy and is entirely separate from personal car NCD. It runs on its own scale, typically one to six years depending on the insurer, and compounds over time. A trader at year five of clean MT NCD pays significantly less than an equivalent trader at year one. MT NCD is transferable between motor trade insurers with documentation. Making a trade claim affects MT NCD, not your personal car policy. Protecting it, or structuring excesses to avoid small claims affecting it, is worth thinking about properly rather than leaving to chance.

Road risk insurance covers vehicle movement, not static storage. Vehicles sitting at your home address, a yard, or a rented compound are not covered by road risk alone. Under TPFT and comprehensive road risk, theft and fire cover may apply to vehicles while in the trader’s custody, but the specifics depend on the policy wording. For stock sitting at a business address, you need combined cover with stock protection included. This is one of the most common gaps between what traders assume and what their policy actually provides.

Within the limits of your policy, yes. Road risk operates on a “any vehicle in custody or control for trade purposes” basis, not a named-vehicle basis. But there are constraints: the vehicle must be within the agreed value limit on your policy, it must be used for legitimate motor trade purposes, and the driver must be named on the policy. Vehicles outside disclosed categories (high-performance, imports) or above the vehicle value limit create exposure even on a road risk policy.

Yes, but expect higher premiums and a narrower choice of insurer. New ventures lack trading history and MT NCD, which are the primary risk signals underwriters use. Things that help a new trader’s application: a clean personal driving licence, no criminal convictions, documented trade qualifications (IMI, City and Guilds), a clear and modest description of planned activity, and realistic vehicle value limits. Some insurers won’t write new ventures at all, which is why a specialist motor trade broker with access to appropriate markets is important for new starters.

Motor trade NCD (MT NCD) is a no-claims discount built on a motor trade policy. It operates on its own scale, separate from your personal car NCD, and typically runs from one year to five or six years depending on the insurer. Making a claim on your trade policy affects your MT NCD, not your personal car NCD, and vice versa. MT NCD is transferable between motor trade insurers with supporting documentation. A trader who builds five years of MT NCD will see meaningfully lower premiums than an equivalent trader with no MT NCD history. Protecting MT NCD is one of the most commercially valuable long-term insurance decisions a trader can make.

For most established traders, yes. The critical difference between TPFT and comprehensive is accidental damage to vehicles in your custody, including customer cars. A single incident involving a customer’s vehicle that can’t be recovered from the responsible third party can cost more than the premium difference between TPFT and comprehensive for several years. For traders operating on very low vehicle values or dealing in cars worth less than a few hundred pounds, TPFT can be a rational choice. For anyone regularly handling vehicles worth £5,000 or more, or doing accompanied test drives, comprehensive road risk is worth the additional cost.

It depends on the insurer and the specific vehicle. Some markets are comfortable insuring traders who handle performance or prestige cars as part of their regular activity. Others restrict certain categories, particularly grey imports, modified vehicles, or cars above a certain value threshold. The key is disclosure. If your business activity includes these vehicle types, tell the insurer at the outset. Attempting to insure a performance car under a policy that restricts it, or handling an import without disclosing it, creates the conditions for a claim to be disputed or declined. A specialist motor trade broker with access to appropriate markets will find the right product for the vehicle types you handle.