The month of September is eagerly anticipated by both consumers and those in the motor trade business with the arrival of the seasons’ new marques. It’s a bellwether for the state of the new car industry in the UK.

Along with motor dealerships, there is also one motor trade sector that is particularly flourishing around this time of year, namely scrap dealers and breakers yards, both of which operate at the finite stage of a vehicles’ life but offer lucrative opportunities just the same.

If you’re considering scrap dealership as a motor trade career than it’s also worthwhile exploring the myriad of motor trade insurance options available to keep you compliant.

Why Scrap a Car?

It is a sobering fact that when you own a vehicle, its value depreciates year upon year. Vehicles that are between 10-20 years old with high mileage tend lose their value and end up as near-worthless scrap.

Maybe it’s a Category D write off (this is a level of damage used by insurance companies to describe vehicles they have written off). A Cat D vehicle will have suffered damage in its lifetime, probably the result of an accident. It could also be because it’s way too old and not compliant with Euro 6 emission standards.

Whatever the reason, those in the motor trade will at some point come across scrap dealers or breakers yards.

Here Are Some General Housekeeping Points

•      All reputable scrap metal merchants and breakers yards must be licensed by a local authority. Recently the UK Environment Agency joined forces with eBay to stop illegal vehicle breakers.

•      The amount you’ll make can vary according to location, but in 2013 it was disclosed that Sydenham Scrap Metal yard in south London turned over £7million a year.

Motor Trade Insurance Options

Both scrap dealers and breakers yards offer significant challenges not normally experienced in other sectors of the motor trade. Scrappage or car breaking is usually undertaken at a single site and can often be dangerous or hazardous both to personnel and to the environment.

Aside from the general noise, there is often the application of power tools for stripping lucrative parts from vehicles, general health and safety considerations and environmental compliances that need to be adhered to.  Ensuring you have the correct insurance is vital if you are to avoid the pitfalls.

If you are running a scrap dealership or a breakers yard from a business premises, you will definitely need road risk insurance, liability and property/ equipment cover. Remember that your business could be at risk if you do not have the correct insurance.

Scrap dealer or breakers yard insurance needs to include road risk together with public and employers’ liability (if you have employees) to cover you for the collection, movement, sales, recovery and storage of vehicles. Many scrap dealers offer collection and transport to site, so it’s worth considering cover for your own vehicles and also for movement of customers’ vehicles whilst they’re towed, transported and worked on at your business premises.

For a scrap dealer or breakers yard, your equipment is your livelihood so it pays to have as much insurance cover as you can afford against equipment breakdown failure and theft; all things that will impact the way you conduct your business.

At Tradex we have been insuring breakers yards since the sixties so we understand the nature of your business.