Levels of Motor Trade Cover

Are you wondering what levels of cover you need for your Trade Car insurance policy? It can be difficult to figure out what level of Motor Trade insurance cover is suitable for your business, or you may need to stick to a strict budget for your Motor Trade insurance and need to know the options for your budget. You may also need to consider looking at a Combined Motor Trade insurance policy, if the size of your motor trade business requires it. Below we look at the three basic levels of cover available to motor traders looking for a Road Risk Motor Trade insurance policy.

Third Party Only (TPO)

A Third Party Only level of cover is the minimum level of Motor Trade insurance needed to satisfy the legal requirement. It’s a very limited level of cover and is only really suitable for those looking for Car insurance on a very limited budget, or those looking for Car insurance but are being quoted high, unaffordable prices. Third Party Only wouldn’t be a good option for Trade Car insurance as it only covers you when driving, and that cover is limited to damage to other vehicles if you’re involved in a crash. This means there wouldn’t be much of a difference between regular Car insurance and Motor Trade insurance.

Third Party, Fire and Theft (TPFT)

Only a level above Third Party Only, this level of cover would be better for someone looking for Motor Trade insurance. It offers the added protection of theft and damage, so if your vehicle is stolen or damaged then you will be covered for that. However, in terms of Motor Trade insurance this usually only applies to your personal vehicles, and may not apply to customer vehicles or any stock vehicles. As it’s still a Third Party policy it means that if you’re involved in a crash that’s your fault, the vehicle you’re driving, whether it’s a customer vehicle or your own personal vehicle, won’t be covered. Whilst this level of cover has added protection over a Third Party Only policy, it’s still not ideal for someone looking for Traders insurance.


This is the level of cover you should be going for, within a Motor Trade insurance policy, if you want your vehicles to be fully protected. A Comprehensive level of cover pretty much does what is says on the tin when covering your personal car(s) as part of a Traders insurance policy. This means, in the event of a crash that you’ve caused, you will be covered and should expect your Trade Car insurance company to replace or repair the vehicle you were driving. You’ll also be covered if someone steals your car or damages it, however, just like TPFT, this may only be restricted to the personal car(s) listed on your Traders insurance policy.


When taking out Motor Trade insurance, every trader should seriously consider taking out a Combined Motor Trade insurance policy. What a Combined Traders insurance policy does is combine two aspects of Traders insurance to offer motor traders the best cover possible. It will combine the Car insurance aspect such as Comprehensive cover, with Motor Trade insurance products such as Stock of Vehicles cover. So, a used car seller may have a Trade car insurance policy that combines a Comprehensive level of cover, with Trade Car insurance products such as Demonstration cover and Stock of Vehicles cover creating a good level of protection for the trader’s used car business.


So, when taking out your Motor Trade insurance policy it’s always recommended to go with a level of cover that offers you the best protection. Making sure you have a fully-fledged Traders insurance policy that includes the additional Motor Trade insurance products your specific motor trade business need is important. Of course, if you are on a very tight budget then maybe the Third Party Only level of cover is what you need, however just be warned it won’t cost a lot because it offers a very limited amount of cover and only exists to serve the legal requirement of having Third Party cover to drive on UK roads.