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Trade plates are an invaluable tool for many motor trade businesses, because they allow the company to move vehicles from one location to another without having to register or tax them.

However, some motor traders’ policies don’t include trade plate cover as standard, so it’s important that you carefully compare policies and check what’s included and excluded on each one in order to find one that offers trade plate insurance at a fair price.

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Trade Plate Insurance: a straightforward guide

What are trade plates?

Trade plates let you move cars that are unregistered and untaxed. Using trade plates saves you from sorting out tax and ownership details for cars that are temporarily in your care, which means they can save car dealerships and other motor trade businesses a lot of time, money and effort.

Why do I need trade plates insurance?

Motor trade plates can only be used in certain situations – and you’ll need trade plate insurance before you can legally drive a car with trade plates on public roads.

If you’re in the motor trade and drive or move vehicles on public roads without taxing or registering them first, then you’re likely to need both trades plates and trade plate insurance. For example, if you’re a:

• Car dealer
• Vehicle tester
• Scrap or salvage business
• Business that collects or delivers vehicles

How to get trade plates

You can only get trade plates from the DVLA (Driver and Vehicle Licensing Agency). To apply, you’ll need to be a registered company and give the DVLA your Companies House registration number. You’ll also need proof of public liability insurance and your motortrade certificate.

Your insurer will need to know the details of any vehicle trade plates you have so they can be passed on to the Motor Insurance Database (MID). In most cases, your provider will do this for you but it’s worth double checking this.

The rules around trade plates are strict and anyone found misusing them could face a £5,000 fine or even a jail sentence.

Click here to find out how much trade plates cost and how to apply for them.

What risks does trade plate insurance cover?

Trade plate insurance protects motor trade businesses against the risk of an accident or claim when they drive unregistered and untaxed vehicles on public roads.

If your standard motor trade insurance policy includes trade plate cover as standard it’s possible this might be third party only, in which case you’d only be covered against the cost of damage to a third party’s vehicle or property.

However, most insurance providers should allow you to increase your cover to third party, fire and theft or fully comprehensive, which would mean the vehicle you’re driving could also be covered.

Does trade plate insurance cover ‘social, domestic and pleasure’ use?

No, a car with trade plates can’t legally be used for ‘social, domestic and pleasure’ – in fact, not only would this invalidate the vehicle’s trade plate insurance, but the driver could also face a £5,000 fine and a criminal conviction.

How much does trade plate insurance cost?

It’s hard to give an average cost for trade plate insurance because these policies are usually tailored to your specific business needs. To work out the cost of your policy, insurers will consider:

• The type of business you own
• The number of people you employ
• Where your business is located
• The type of cover and add-ons you need
• The amount of cover you want

How can I lower the cost of trade plate insurance?

It’s important to make sure you’re covered for all the risks you face but you can cut the cost of cover by:

• Using Quotezone.co.uk to compare trade plate policies from a range of providers
• Paying for your policy on an annual rather than a monthly basis
• Not taking out more cover than your business needs
• Only adding named drivers that are over the age of 25 and have clean driving records
• Increasing your voluntary excess