For more on this part of the insurance industry:
Automotive dealerships insurance is a specialised policy designed to protect businesses that sell, lease, or service vehicles.
Just one event, like a fire wiping out inventory or a legal dispute over a mis-sold car, can lead to huge losses. That’s why insurance is a must for stability and legal protection.
The UK saw almost two million new car sales in 2023, with dealerships handling high-value stock daily. But these businesses may struggle with unique risks, from damage to vehicles in stock to liability claims from customers and employees.
A major car dealership in Manchester was hit by a cyberattack in 2024 which exposed thousands of customer financial records.
Without cyber liability under a tailored automotive dealerships insurance plan, the business faced millions in fines and compensation costs.
By 2025, EV numbers will hit over 1.6 million and drive demand for specialised insurance. More dealerships are selling online as well which requires digital-friendly policies.
Subscription services are also rising. This makes flexible insurance for automotive dealerships essential. Brokers must also address emerging risks, such as:
New car technology, like self-driving features, creates uncertainty in liability risks. Undisclosed commissions in car financing are also legal issues to focus on as they can lead to costly claims.
The key businesses that need this insurance include:
With so much at stake, automotive dealerships insurance can save businesses a lot of money when things go wrong.
The two most important types are motor trade insurance and employers' liability insurance.
Motor trade insurance covers vehicles for sale or in the dealership’s care, including test drives. Employers' liability insurance is legally required to shield staff from work-related injuries or illnesses.
Dealerships should consider extra coverage for added protection:
A complete automotive dealerships insurance plan can help dealerships manage hazards and keep operations running efficiently.
Car dealers in the UK need motor trade insurance to legally drive customer vehicles. This covers cars in their possession, including those for repair or sale. It also allows them to drive these vehicles on public roads.
Yes, many dealerships provide drive-away insurance. This gives customers temporary cover when they buy a car. This allows them to drive their new vehicle while arranging their own policy.
A small independent dealership may need £50,000 to £100,000 to start. A larger franchised dealership can cost hundreds of thousands.
This operation will require funds for premises, vehicle stock, licences, and automotive dealerships insurance. Costs will vary, but securing enough capital is critical to cover these expenses.
No formal qualifications are required to own a dealership in the UK. But experience in sales, business management, and knowledge of the automotive industry can help. Many dealers also take courses in motor trade law and finance to improve their skills.
Third-party insurance is the legal minimum required to drive a car. It covers damage to other people’s vehicles and property but not the driver’s own car.
Drivers wanting more protection can choose third-party, fire and theft or comprehensive insurance. These cover damage to their own vehicle as well.
