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Starting a Motor Trade Business When You’re under 25

Starting a Motor Trade Business when you’re under 25 is possible, but there are a few restrictions and qualification required. If you decide to proceed make sure you have under 25's trader insurance that provides comprehensive cover.To help those of you interested in this business sector we have created this helpful resource page.

What are the qualifications to legally open and operate a Motor Trade Business in the UK?

  • Each owner has had to have a UK driver’s license for a minimum of 1 year prior to opening a motor trade business.
  • Because of the above qualification UK citizens must be at minimum of 18 years of age.
  • EU Driver’s licenses holder can open a motor trade business after having residency in the UK for a minimum of 3 years.
  • Because of the above qualification EU citizens must be at minimum of 21 years of age.

Why does the motor trade insurance cost more for owners under the age of 25?

  • Drivers under the age of 25 are classified as high risk so the premiums are higher.
  • The highest premiums are for owners 21 year of age and younger. Not all insurance companies will offer this type of insurance.
  • Owners 22 and 23 years of age are the next highest costs for premiums again due to the elevated risks associated with drivers of those ages.
  • If even one employee is under the age of 25, the costs of the premium are higher due to the associated higher risk factor.

What types of vehicles can a person under the age of 25 sell and still have motor trade insurance coverage?

  • Small inexpensive vehicles with small displacement engines.
  • Small cars used by families equipped with security devices.
  • Customer vehicles that are only being repaired.

An owner of the motor trade company under the age of 25 cannot be covered for all types of vehicles due to the high risk factors.

What vehicles cannot be covered?

  • Luxury vehicles.
  • Vehicles with large engine displacement.
  • Sports cars.
  • Exotic cars.
  • Race cars.
  • Most large trucks and lorries

Who would not be approved for a motor trade insurance policy?

  • Anyone with a history of making excessive claims on other insurance policies.
  • Anyone with a criminal conviction.

How can you reduce the cost of your premiums?

  • Make no claims and get a no claim bonus upon renewal of the policy.
  • Hire staff that is over the age of 25.
  • Have security devices on the premises that can include CCTV cameras and security lights.
  • Hire staff that has good driving records

This helpful resource page can assist you on who can be covered and what can be covered when you are starting a Motor Trade Business when you’re under 25 years of age. If you have any questions or wish to take out a policy our friendly insurance brokers can assist you in finding the right coverage for your business in a budget you can afford.

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