Vehicle Delivery Insurance & Trade Plate Insurance
Car dealerships and auctions can provide numerous opportunities for people interested in running a car transport business. Whether you are looking to transport vehicles on a low loader, trailer or individually with trade plates, all carry a unique set of risks.
With the increase of online vehicle purchasing, there is also a growing demand for transportation over longer distances. Choosing the right type of vehicle transport insurance or trade plate insurance and making sure you have the right licence cover in place will help to keep you safer on the road.
When cars are being delivered within the UK, the most cost-effective option is to have a vehicle driven to its final destination by a transportation company. Whether you are transporting luxury vehicles in an enclosed transporter or single vehicles, you need motor trade insurance to cover the vehicles you are moving against any damage that could occur and liability cover against possible risks to members of the public or your own employees.
What is Vehicle Delivery Insurance?
Vehicle delivery insurance, also known as vehicle transporter insurance, is used by transport businesses to protect themselves should any liability, loss or damage occur whilst vehicles are in transit. This type of specialised insurance often comes under the umbrella of motor trade insurance, with individual cover tailored to the scope of your business.
Who Needs Vehicle Delivery insurance?
Vehicle delivery insurance or trade plate insurance is needed by any business who is involved in the collection and transit of vehicles. Whether you are transporting a single vintage car or multiple vehicles, this type of motor trade insurance will provide protection against road risks as well as coverage for damage and accidents that could occur during the loading and unloading of vehicles.
If driving individual cars, you will also need to invest in trade plates to avoid having to tax and insure the car you are delivering.
Depending on the size of your business, vehicle delivery insurance can include:
• Comprehensive road risks cover for delivery by transporter, trailer or trade plates
• Storage of vehicles
• Freight forwarding or dovetailing your liabilities as a sub-contractor of a National Recovery organisation.
• Vehicles in transit
• Buildings and Contents
• Tools, equipment & stock
• Own vehicle, fleet and speciality lifting gear
• Public and employers’ liability if required
• Spouse and family can be included
• UK/Europe or as cargo worldwide
At Tradex we are able to tailor your policy to ensure you are secure within all aspects of your business.
Setting up Your Business Operations
Depending on the size of your operation, you may be buying and selling cars from home or intend to operate from a business premises. Before you are able to apply for of the licences you will need to operate your company, you will need to have your vehicle delivery insurance in place as well as the depot or premises from which you will operate.
Before choosing the right premises from which to operate your vehicle delivery business, you will need to consider size and location as obviously this is where you will be storing your car transporter or fleet of vehicles. You may also need to have space for the storage of cars during transportation or if you are buying and selling on your premises.
When estimating the space you will need, there will need to be plenty of room for loading and unloading of vehicles, as well as the possibility for future expansion if you intend to remain at the depot for a while.
For your location, you will need to ensure it is in an environmentally acceptable area as well as having quick and easy access to major routes and the motorway for good transport links to your customers.
You will need an operator’s licence (further details below). To apply, you will be asked to supply the address of your proposed depot as well as the numbers of trailers and vehicles you will be keeping on the premises.
To be able to purchase and do an annual renewal of an operating licence for your transport business, there will need to be regular inspections and maintenance with full records that include:
• The transporter/s vehicle details
• A list of all the items to be inspected
• How often and by whom the inspection was carried out
• The results of the inspection including full details and timing of any work carried out
• A declaration that any of the faults found in the inspection have been probably attended to and fixed
Whilst carrying out any checks of the premises, it is also necessary to keep in mind all aspects of health and safety including the principles of load security. If you are dealing in auctioned cars, for example, they are likely to be older and second-hand, giving a higher risk of falling parts.
There needs to be a focus on reducing the risk that a car could pose to employees, the public and other road users both when transporting the vehicles as well as loading and unloading. A load is deemed to be insecure if, in legislation terms, it can be said to be ‘likely to cause danger or nuisance to any person’, or, more seriously ‘is such that it involves a danger of injury to any person’.
Proper load security is therefore essential and any inspections will ensure you have the correct equipment and tie-down straps to prevent any unnecessary accidents, as well as making sure correct health and safety training is carried out for all employees of the company.
Sourcing Your Equipment
Good equipment is crucial, if you want to provide a quality service. Research the number of transporters you will need as well as equipment such as winches, trailers and tie-down straps.
Trucking software or transport management software may also be something you want to consider as it can help to keep track of mileage and fuel, hours spent on the road and mapping the best routes.
It may also help when it comes to your vehicle delivery insurance policy renewal. The more you can demonstrate to your motor trade insurance broker that you and your team are driving safely and within the law including for rest breaks, the more likely they will keep your premiums lower should there be any cause to make a claim or when your policy renews.
Applying for a Trade Licence
As pointed out on the UK government website, there is no automatic right for any business to get a trade licence and only those that can fully comply with the specified criteria will be eligible to become a trade licence holder. To be eligible to apply for a trade licence you must either be a motor dealer, a motor trader or a vehicle tester and will need to read the terms and conditions of your licence before making an application.
When applying for a trade licence, note that they expire on the 30 June or 31 December and you are unable to get a licence for less than six months or more than 12 months at a time (from the month you apply). This means, when you apply for your first licence, it will last for between six and 12 months, depending on when you put in your application. For example, if you apply in September, the trade licence will last for 10 months, so it expires the following June. Once you have a licence, you can renew it for six or 12 months at a time.
Before you are able to send off your completed VTL301 trade licence form, you need to make sure that you have your vehicle delivery insurance in place and be able to provide a copy of your Motor Trade Insurance Certificate with the form. The name on your insurance certificate must match the name on the application form. If you fail to provide a Motor Trade Insurance Certificate, you’ll need to say why and give your Companies House registration number.
At the time of application of your licence, you can also indicate whether you want a set of trade plates. It should take about four weeks to receive a confirmation letter and for your trade plates to arrive, if you application is successful.
Applying for a Vehicle Operator Licence
Check with the DVLA regarding a vehicle operator licence if you are intending to drive a vehicle transporter or truck. As a vehicle transporting business, it is highly likely you will be carrying substantial weight when fully loaded. In the UK, you need an operator’s licence for vehicles over 3.5 tonnes in gross vehicle weight that will be carrying goods.
Applying for an operator’s licence needs to be done through the DVLA. You will find more information on the government website with steps on obtaining the relevant vehicle operator licence. Apply for a vehicle operator licence
To support your application, you will need to send financial evidence to prove that you have sufficient money to run your company and all relevant documents should be in the name of the business that’s applying for the licence.
To apply for a heavy goods vehicle (HGV) operator licence, you will also need to advertise the application in a newspaper local to where you operate your business and then upload a copy of the advert with your application. Failure to advertise your business correctly could result in the licence being turned down.
A goods vehicle operator’s licence will be needed for each traffic area in which you operate. So, if you expand into more than one area of the United Kingdom, you must take this into account. The traffic areas are:
• East of England
• North-East of England
• North-West of England
• West of England
• London and the South-East of England
• West Midlands
• Scotland
• Wales
To find out more about the traffic areas in which you are based and to check you have the right licence in place, email the Office of the Traffic Commissioner: enquiries@otc.gov.uk.
Once you have made your application online, you can expect a decision within seven weeks. There may be delays if you fail to provide all the right supporting documents so it’s good to double check as you don’t want it to prevent you establishing your business as quickly as possible.
Why Might I Need Trade Plates?
If you work in the motor industry, trade plates can save you time and money as you do not need to register and tax every vehicle which is temporarily in your possession. Motor trade plates confirm to the DVLA that a vehicle is being used temporarily for trade purposes.
Without trade plates, you will need to tax and register every vehicle individually before you can take them on public roads. This takes considerable time and money so it’s important to have the trade plates available if you are making deliveries of individual vehicles by road. It is also essential to note that you cannot legally need vehicle delivery and trade plate insurance before you can drive a car with trade plates on public roads.
Tradex’s trade plate insurance is specially designed for delivery drivers who collect and deliver vehicles and for those who have vehicles in their temporary possession for purposes such as testing, demonstrating and trialling. You are able to register all the trade plates you own, which will mean that vehicles bearing your trade plates are insured should they be involved in an accident.
All trade plate numbers will need to be disclosed to your motor trade insurance broker for entry on the Motor Insurance Database or MID. Trade plate insurance cover excludes social, domestic and pleasure vehicle use.
The MID is the central record of all insured vehicles in the UK and is used by the Police and the Driver and Vehicle Licensing Agency (DVLA) to make sure motor insurance laws are upheld. It is important this is regularly updated with your trade plates to prevent any driver being stopped by the police for uninsured driving, which could lead to your vehicle being impounded or the possibility of incurring fines. It could also mean that the vehicle is not covered under your vehicle delivery insurance policy.
What are the Trade Plate Rules?
As discussed, trade plates are strictly for motor trade businesses only. They can only be used on one vehicle at a time, and you cannot keep a trade plated vehicle on the road if it is not in use (unless it has broken down or been in an accident).
Trade plates must also be used for the purpose you write on your trade licence application form. You cannot use them, as an example, for customers to test drive vehicles for sale if you have expressly said it is for delivering vehicles to a customer.
You can only use trade plates on vehicles that:
• Are deemed safe to drive (‘roadworthy’)
• Are fully insured
• Have a valid MOT certificate or are exempt from needing an MOT
Who is Eligible to Apply for Trade Plates?
You can apply for trade licence plates if you are a registered motor dealer, motor trader or vehicle tester. This will mean your motor trade business is offering one or more of the following vehicle services:
• You are selling vehicles
• You manufacture or repair vehicles as part of your business
• You test other people’s vehicles on public roads
If you collect or deliver vehicles, you’ll also be eligible for trade plates as long as either:
• This is the only thing your business does
• You also manufacture or repair vehicles
How Much Do Trade Plates Cost?
The trade plate fee is part of your trade licence. The fee for your trade licence will depend on when the licence starts and how long it is valid. When you initially apply for a trade licence, it can last from 7-11 months, whereas renewal customers will need to buy six- or 12-month licenses.
The cheapest licence available is obviously the six-month licence, which is £99 at the time of writing, and the most expensive is the 12-month at £180. For a full list of up-to-date prices, visit the gov.uk/trade-licence-plates page.
How Should You Display Your Trade Plates?
Trade plates must be displayed in a certain way. This is important as misuse of trade plates can lead to fines of up to £5000 and a possible jail sentence.
· Place them on both the front and back of the vehicle, just the back for motorcycles
· Make them visible and easily readable from a distance of 20 metres
· Always place them on the outside of the vehicle
· You must not cover the existing number plates, front or back, unless it is a motorcycle
Replacing Lost, Stolen or Damaged Plates
If your trade plates are lost or stolen, you must report this immediately to the police. You will need to apply for a full replacement set as it is not possible to buy a single lost, damaged or stolen plate (excluding motorcycles).
If your plates become unreadable due to wear and tear, not due to accidental damage, you may be able to get a replacement set for free. Otherwise, you will need to pay a fee of around £13.50 for a new set.
To apply for a lost set of licence plates, you need to use the form VTL310 to apply for duplicates. If you no longer require your trade plates, you can use form YTL308 to surrender the trade licence and arrange for any refund that may be due.
If your plates have been stolen, you will need to add a crime reference number when filling in the form. If the plates are damaged or faded, you will need to send the full set of plates (including any undamaged plates) to DVLA before they will be able to send out any replacements (Trade licence plates: Replace lost, stolen or damaged plates - GOV.UK (www.gov.uk).
What Happens If I Change My Business Name?
If you decide to make a change to your business name you will need to apply for a completely new trade licence using form VTL301. This means returning your trade plates with the form and if you are applying for a partial refund on any remaining months on your previous licence, you will need to download form VTL308. If you want to change your business name and address at the same time, you will need to send forms VTL301 and VTL308 to DVLA, including your new address details in form VTL301.
Ending Your Trade Licence and Returning Your Trade Plates
There are two ways your trade licence will come to an end:
· Letting your licence expire without renewing it
· Cancelling your licence before it expires, also known as ‘surrendering’ your licence
If you cancel your licence before it expires, you should receive a refund for every full calendar month remaining once the DVLA receives your application form. You can expect to receive a letter from the DVLA warning you that your licence is due to expire. If you do not renew, you will receive a second letter explaining how to proceed.
Vehicles in Transit Insurance (Goods in Transit)
Whilst vehicles in transit insurance is not a legal necessity, damaged caused to any vehicles during transit could prove extremely costly to your business. Clients are trusting you to collect and drop off their vehicles using the greatest level of car and attention. However, despite full safety procedures in place, accidents do happen and it is reassuring for your customers’ to know you are fully insured for all situations.
Vehicles in Transit insurance will cover you should any vehicles, tools or equipment be damaged whilst transporting any cargo to its destination. European cover under CMR convention can also be included in a Tradex policy. It can be tailored to your business depending on whether you personally drive individual vehicles, winch them on or otherwise, and it includes cars, vans and bikes.
Tradex Vehicle Delivery Insurance and Trade Plates
Tradex’s car delivery insurance can be tailored to cover all your business needs with trade plates considered part of your policy. In addition to your road risks cover, we can offer you cover for buying and selling of vehicles, delivery and on-premises storage risks. We also offer social, domestic and pleasure for all your permanently owned vehicles, so you don’t need to take out a separate private insurance policy. Other insurance includes office, premises and storage cover as part of your comprehensive package.