From home car traders - how do they do it? (insurance)

[veevee]

Just wondering how this works. I've come across lots of small car traders trading from home, fine if you have a driveway big enough; but around my area I can think of several places where there are 3 or 4 cars parked at the side of the road with for sale signs on. How are they getting around this tax/insurance-wise? I'd have thought they wouldn't even break even on a traders policy, and does that allow cars to be parked on the road?

[McSam]

I'm interested to hear from anyone with direct experience, but I've heard of traders' policies which would do for that sort of business costing less than a grand.

It's the only legal way of doing it, because the vast majority of insurers won't touch anything connected to the motor trade, which adding a temporary car for the express purpose of selling it on would be.

[Prof Prolapse]

Traders policies aren't as expensive as you may think. I know two blokes that use them simply because it's cheaper than insuring their cars individually. It was under a grand for several cars including highly modified ones.

They needed to sell a certain number of cars a year to qualify but it was only a handful.

No idea what they do about tax.

[stuntmaneddie]

Yep, got a trade policy now, and have had for about 15 years. They're not that expensive. I got one when i was being quoted £2500 to insure an Escort Cosworth, and a trade policy would cover it fully comp for less than £700 !!
Now, as i always have at least 2 cars, i still have one. They do cover you for SDP and road risks for trade purposes, at a basic level. Obviously higher levels are available. They are very wise to this now though, and a lot of policys don't cover Evos/Imprezas/Cosworth or more exotic machinery

[Kentish]

stuntmaneddie said:

Yep, got a trade policy now, and have had for about 15 years. They're not that expensive. I got one when i was being quoted £2500 to insure an Escort Cosworth, and a trade policy would cover it fully comp for less than £700 !!
Now, as i always have at least 2 cars, i still have one. They do cover you for SDP and road risks for trade purposes, at a basic level. Obviously higher levels are available. They are very wise to this now though, and a lot of policys don't cover Evos/Imprezas/Cosworth or more exotic machinery

Do you have to keep telling them what you need to cover (vehicle specifics)?

Or is it a blanket cover all policy (with the exceptions you mentioned of course)?

[xuy]

Is it correct that you are only insured at the trade value of the cars, and not the "retail" replacement cost?

[Vixpy1]

Yep

[graham22]

There are several policies for traders from home. Claims will be settled on trade values as the customers are in the trade(!)

More often insurers will want proof of trading - business bank account/accountants reports etc, whilst not when setting up a policy they will want to see such proof following a claim.

At the end of the day, a traders policy is a tool of the trade, much like HPI subscriptions, machine data updates etc.

I'd be wary about someone having a trade policy to cover several own cars these days, things have moved on.

[ajb85]

veevee said:

Just wondering how this works. I've come across lots of small car traders trading from home, fine if you have a driveway big enough; but around my area I can think of several places where there are 3 or 4 cars parked at the side of the road with for sale signs on. How are they getting around this tax/insurance-wise? I'd have thought they wouldn't even break even on a traders policy, and does that allow cars to be parked on the road?

Regardless of traders' policies, you can't park an untaxed vehicle on the road, so no; a traders' policy does not get round this. Nor can you leave a car parked up with trade plates in the windows, they are to facilitate the movement of vehicles only, untaxed cars have to be kept on private land. I trade from home, and until recently was renting a unit which kept me legit and meant there weren't cars parked outside the house all the time; one sure-fire way to get the neighbour's backs up! Trade policies do include some exclusions, but only if specified by you in order to keep the premium down (i.e, no high performance cars). My cover includes SDP and assisted demonstrations, not bad value at £700 p.a, however this price has never dropped despite accumulating NCB over the years. If you stick to the rule book, cars in your possission must be uploaded to the insurance database, this is done simply by logging into a web based account. Strictly speaking you have two weeks to do this with every car. I have been pulled over a handful of times because the car I'm driving isn't showing as insured on a police ANPR; it's a bit of a grey area really but can always be explained logically - more often than not the car I'm driving is someone else's part exchange, so naturally that car will no longer have insurance, and I can't be expected to carry around my insurance cert with me all the time! Anyway, I digress....

[paintman]

Parked on the public road with 'for sale' signs can be in itself illegal.
"(1)A person is guilty of an offence if at any time—
(a)he leaves two or more motor vehicles parked within 500 metres of each other on a road or roads where they are exposed or advertised for sale, or
(b)he causes two or more motor vehicles to be so left.
(2)A person is not to be convicted of an offence under subsection (1) if he proves to the satisfaction of the court that he was not acting for the purposes of a business of selling motor vehicles."
Clean Neighbourhoods and Environment Act 2005. http://www.legislation.gov.uk/ukpga/2005/16/sectio...

IIRC there was an offence of offering a carriage for sale which could be used against one non-business seller, but I can't remember what it was or under which Act although the Town Police Clauses springs to mind. Can't find it on the net either!