Seeking Advice on Motor Trade Insurance for Online Car Sales

[SamanFarman]

Hello,

I am seeking advice regarding motor trade insurance for a new online car sales business based in the UK.

About Our Business:

• Business Model: We operate entirely online, with no physical inventory or forecourt. Our service helps customers find vehicles based on their preferences, sourcing cars through BCA and Copart auctions. Once selected, we purchase and deliver the vehicle directly to the customer.
• Scale: We plan to sell up to five vehicles annually, each valued at around £5,000.

Insurance Requirements:We are looking for coverage that includes:

• Road Risk-Only Insurance: Cover for vehicles we drive and deliver to customers, sourced from auctions.
• Vehicle Transportation Insurance: Protection for vehicles in transit.

Additionally, I have a 2-year No Claims Bonus on my personal vehicle, and I’m interested in whether this can be transferred to a business policy or applied in some way.

Questions:

1. Can anyone recommend insurance brokers or providers in the UK who specialise in policies for online dealerships or similar businesses?
2. Are there specific types of insurance that would be essential for our model (online-only, sourcing from BCA and Copart)?
3. How feasible is it to obtain these policies with a 2-year No Claims Bonus for a new business?

Any advice or recommendations would be greatly appreciated. Thank you in advance for your help!

 

[fisicx]

Which brokers have you spoken to so far? There are any numbers of trade insurers for car dealers.

Your personal no-claims bonus is irrelevant.

Maybe @Frank the Insurance guy can help.

 

[WaveJumper]

Yep its going to be a separate policy and you will be starting from scratch as above other than a quick Google @Frank the Insurance guy will probably be able to point you in the right direction

My only other thought is 5 cars a year at 5k does not sound like a lot of profit have you done your sums I suspect the insurance costs will wipe this out pretty quick

 

[fisicx]

My only other thought is 5 cars a year at 5k does not sound like a lot of profit have you done your sums I suspect the insurance costs will wipe this out pretty quick

Good point. Your insurance premiums could easily be greater than your income. I seem to recall a thread where premiums were in excess of £25K.

 

[WaveJumper]

I got a quote for an electric car yesterday £1,200 and thats with 10 years no claims my bloody Porsche only cost £187.00 "yes sir but the price of batteries if you have an accident" I asked if he knew what the going rate for a Porsche engine was just in case I got rear ended ....... no he didn't

 

[Frank the Insurance guy]

Business Model: We operate entirely online, with no physical inventory or forecourt. Our service helps customers find vehicles based on their preferences, sourcing cars through BCA and Copart auctions. Once selected, we purchase and deliver the vehicle directly to the customer.

You need to clarify your business model here. From the above, you are doing more that just helping customers find vehicles...you are selling them a vehicle? What input will your customer have into the exact vehicle you provide (eg. will you be getting them BMW X5 with reg no 123xyz, or just any 2020 Model X5 under £...?)

How much are you going to make on each sale? Can you change your business model to one of a "consultant" - where you charge a fee to help your customer source a vehicle, where they pay for the vehicle directly and pay you a separate fee for sourcing it? You could also arrange transport of the vehicle using a specialist transporter (ie. they have their own insurance). Doing it this way would mean you wouldn't need Motor Trade Insurance!!).

Can anyone recommend insurance brokers or providers in the UK who specialise in policies for online dealerships or similar businesses?

There are a number of specialists out there such as https://www.tradex.com/motor-trade-insurance- a google search will help.

For Car Transporter Insurance, there is a specialist here: https://www.finchinsurance.co.uk/sector/vehicle-transporter-insurance/

However, note that some insurers will not quote until you are an established business with a good claims record!

How feasible is it to obtain these policies with a 2-year No Claims Bonus for a new business?

Sorry, not going to happen. Insurers will not take that into account.