Help with self drive hire company start up question please

[zed4]

Hello,

I have a slight predicament which I'd like some advice with please.

In March I will be launching a self drive sports car hire company, we're currently finalising insurance (just waiting for the last quote to come in), after which we will need to organise a credit card machine, finalise our terms and conditions and sort out order pads with T&Cs etc. Still lots to do!

Now, I've been asked by customers on a few occasions whether the cars are ready to rent now. The short answer is no, they're not. They're only insured for me to drive and we don't have any facilities to take a deposit. But I've had an enquiry today from somebody who is desperate for a sports car for their wedding in two weeks. They want to hire the Caterham to run from the church to the reception, just a few metres away.

The customer has stated that he is a motor trader and has motor trade insurance which will cover the car, but of course it will only cover it up to a trade value, and not it's true retail value.

So, any ideas? Does anyone know of a day insurance company which will cover the car for its full value? It's a Caterham and most day insure companies won't quote. Or should I risk it with his motor trader insurance and compile some terms and conditions stating that he must pay the shortfall in the event of a claim?

The second problem is that once I start receiving payments and turning over money, I need to inform the tax office, which we're not yet ready for. We are a registered limited company, but we've not yet started trading.

Thanks for any help and advice.

Dan

[LordHaveMurci]

Not worth the hassle surely?

[Birdster]

Just an idea, but how about a 'loan' of the vehicle. Free advertising? Helps with the payment side of things/tax and the trader has to insure the vehicle. Would that work?

[essayer]

No way would I risk it. Start your business and run it to your own agenda, not somebody else's.

[Rich1973]

Do you have an Allegro on the books yet?

[ismellburning]

My understanding is that motor trader insurance covers the trader on all cars *if* he's driving them in connection with his business.

I.e. delivering to a client, collecting a car to sell, picking up/delivering a car from/to a mechanic or whatever.

So he probably wouldn't be covered for a wedding, no. Your best bet - if you can charge him enough for it to be worth it - will be to read his insurance docs rather than take his word for it.

As said before, worth the faff? All well and good getting him to agree to pay any shortfall in insured value if there's a scrape but what if he writes if off and goes bankrupt etc?

[markmullen]

ismellburning said:

My understanding is that motor trader insurance covers the trader on all cars *if* he's driving them in connection with his business.

It depends on the policy, most I've used have covered SDP and commuting in addition to business.

[xRIEx]

Add him as a temporary named driver to your existing personal policy?

Just keep any mention of 'hire and reward' very quiet, behind closed doors, not on public Internet forums, etc. etc.

[northwest monkey]

markmullen said:

It depends on the policy, most I've used have covered SDP and commuting in addition to business.

There was a fella on Traffic Cops (or similar) the other week who had (legitimate) trade insurance. He was stopped by the Police as the car flagged up on ANPR (no insurance). They asked him where he was going and he got all bolshy and said he was on his way to Manchester for a night out - the Police phoned his insurance company and they said as it was unrelated to his motor trade business he wasn't covered. They seized the car from him and waved him goodbye. Ended up with a fine and points. To be honest, if he'd not been an arse about it, the copper would have probably waved him on his way, but the point is, it wasn't covered under his trade insurance.

It's a bit like fully comp policies - a lot say you're covered to drive other cars, but a lot don't.

[markmullen]

northwest monkey said:

markmullen said:

It depends on the policy, most I've used have covered SDP and commuting in addition to business.

There was a fella on Traffic Cops (or similar) the other week who had (legitimate) trade insurance. He was stopped by the Police as the car flagged up on ANPR (no insurance). They asked him where he was going and he got all bolshy and said he was on his way to Manchester for a night out - the Police phoned his insurance company and they said as it was unrelated to his motor trade business he wasn't covered. They seized the car from him and waved him goodbye. Ended up with a fine and points. To be honest, if he'd not been an arse about it, the copper would have probably waved him on his way, but the point is, it wasn't covered under his trade insurance.

It's a bit like fully comp policies - a lot say you're covered to drive other cars, but a lot don't.

That may well be true for his particular policy but I have a certificate in front of me which specifically includes SDP and commuting in addition to motor trade business.

[xRIEx]

markmullen said:

That may well be true for his particular policy but I have a certificate in front of me which specifically includes SDP and commuting in addition to motor trade business.

Is that covering only vehicles owned by you, or customers' vehicles as well? That info would be detailed in the policy schedule though, highly doubtful it would be listed on the certificate.

[markmullen]

xRIEx said:

markmullen said:

That may well be true for his particular policy but I have a certificate in front of me which specifically includes SDP and commuting in addition to motor trade business.

Is that covering only vehicles owned by you, or customers' vehicles as well? That info would be detailed in the policy schedule though, highly doubtful it would be listed on the certificate.

1. Description of the vehicle
"Any motor vehicle the property of the Policyholder, or in the custody or control of the Policyholder"

6. Limitations as to use
"T13 For motor trade purposes
T14 For tuition or official driving test
T15 For social domestic and pleasure purposes provided that the vehicle is not hired by the driver
T19 For demonstration purposes (including use by the purchaser or prospective purchaser for business and social, domestic and pleasure purposes) "

[northwest monkey]

markmullen said:

1. Description of the vehicle
"Any motor vehicle the property of the Policyholder, or in the custody or control of the Policyholder"

6. Limitations as to use
"T13 For motor trade purposes
T14 For tuition or official driving test
T15 For social domestic and pleasure purposes provided that the vehicle is not hired by the driver
T19 For demonstration purposes (including use by the purchaser or prospective purchaser for business and social, domestic and pleasure purposes) "

So that's a no to the OP then.

[markmullen]

northwest monkey said:

So that's a no to the OP then.

On our policy but his could well be very different.

Without sight of the OP's client's policy no one can advise one way or the other.

[xRIEx]

markmullen said:

xRIEx said:

markmullen said:

That may well be true for his particular policy but I have a certificate in front of me which specifically includes SDP and commuting in addition to motor trade business.

Is that covering only vehicles owned by you, or customers' vehicles as well? That info would be detailed in the policy schedule though, highly doubtful it would be listed on the certificate.

1. Description of the vehicle
"Any motor vehicle the property of the Policyholder, or in the custody or control of the Policyholder"

6. Limitations as to use
"T13 For motor trade purposes
T14 For tuition or official driving test
T15 For social domestic and pleasure purposes provided that the vehicle is not hired by the driver
T19 For demonstration purposes (including use by the purchaser or prospective purchaser for business and social, domestic and pleasure purposes) "

That's text from the motor cert; I wouldn't bet an IN10 on it without checking the full wordings of those endorsements (e.g. T19 expressly states Class 1).

As another example, a certificate may say "Any driver over 25 on instruction of the policyholder" or something like that and "Any motor vehicle the property of the Policyholder, or in the custody or control of the Policyholder", but it doesn't mention that Joe Bloggs is restricted to vehicles of ABI group 25 and under because he's got 9 points for speeding; that information would be included in the schedule.



In fact, I've just run a quote through my test system for Any Driver over 25 and the resulting certificate (from RSA) says:

Any Driver
Provided that the person driving holds a licence to drive the vehicle or has held and is not disqualified from holding or obtaining
such a licence.

The "over 25" part is on the schedule.

[Qwert1e]

zed4 said:

In March I will be launching a self drive sports car hire company,

By November it's likely to be dead.

• All your customers will want the same car on the same few summer weekends of the year.
• The cars will get ragged and/or damaged.
• When the cars are in the workshop you can't rent them out, leading to no income and angry customers.
• No-one will want the cars from Monday to Thursday, especially between October and April.

Think very hard before you put your cash into this.

[Qwert1e]

markmullen said:

That may well be true for his particular policy but I have a certificate in front of me which specifically includes SDP and commuting in addition to motor trade business.

I think people may be confusing the insurance with "trade plates" - which definitely can't be used for anything other than "trade".

[Muzzer79]

Qwert1e said:

zed4 said:

In March I will be launching a self drive sports car hire company,

By November it's likely to be dead.

• All your customers will want the same car on the same few summer weekends of the year.
• The cars will get ragged and/or damaged.
• When the cars are in the workshop you can't rent them out, leading to no income and angry customers.
• No-one will want the cars from Monday to Thursday, especially between October and April.

Think very hard before you put your cash into this.

Stop holding back - just tell him how you think it is

To the OP, just tell this guy No. Too much potential for problems unless he's paying way over the odds.

It's tempting as a starter to get you going, but if you're not ready, you're not ready.

[Searider]

If he can show that he has at least third party cover - which is all that's legally required then just take a security deposit to cover the value of the vehicle?

OR

Just wait until you are ready!

Dan,

Are you keeping the day job? Or will this be full time?

[KTF]

Coming soon the 'I lent my car to a motor trader for a wedding and he stacked it thread'...