motor trader insurance

After getting ridiculous renewal quotes for my car, spouse car and a bike TPFT (£1900) despite only having a theft claim and being hit by an insured driver I decided to look at getting a part time traders policy which I was quoted £670TPFT including bikes!!. In effect I think I have been forced into trading cars part time.

I still know main dealer salesman that can get hold of part exchanges and sell them to me at trade +£50. I simply ring other traders and describe the cars and get underwrites above this figure (maybe £50-£100 profit on each one). I tell the trader if the car comes in it will be 10 days time. I then take a stab at selling it private to make more money. If I dont sell it private I take the small profit by selling to the trader. simplez.

I described this to numerous trader insurance brokers who said this classed as a part time trader and would insure me under a traders policy saving me 1300quid. also my car, spouse car and bike covered for social domestic pleasure and commuting to work. when i buy a car i just have to inform them if i have the car over 14 days so they can be logged on the MID database. I just need to keep a record of receipts and a book to show profit made on each car etc.

Im guessing I have to declare this to HMRC so they can tax me on the small profit i make. when do i do this? now or end of tax year??? this is 1st time i have ever been self employed so dont really know what to do. My main job is a self employed part time solar salesman, and a part time self employed supply teacher after september so i presume 1 accountant can do all the tax returns at the same time for all 3 jobs right?????

are there any other factors i need to consider as i dont want to commit insurance fraud and want everything to be above board. but it seems logical that if i am saving £1200 on insurance and making a few quid from buying and selling cars then its a no brainer, right??? or is there something i have missed?

insurance is lunacy!!!! i have been forced into buying and selling cars!!

thanks
when the tide goes out we shall see who has been swimming naked
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Replies

  • edited 13 August 2011 at 9:27PM
    Sally_ASally_A Forumite
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    edited 13 August 2011 at 9:27PM
    ...and if you have a bump the insurers may demand Proof of Trading.

    They will also insist that any vehicles have a pre sale check over by a bone fide garage, with paperwork to back it up.

    Total losses may only be settled at trade prices which will be at least a third under what you expect to get.

    If you do get into selling cars, you'd be mad not to have Public Liability, in fact I wouldn't sell you a policy unless you did.

    May I ask who the insurer is please? Seems cheap....too cheap.

    And forgot to mention, you will have to prove that your own vehicles are an asset of your car sales business. If you are using the vehicles for selling solar panels you will need additional business use.
  • Sally_A wrote: »
    ...and if you have a bump the insurers may demand Proof of Trading.

    would receipts/ photocopies of v5s of cars bought and sold be enough?

    They will also insist that any vehicles have a pre sale check over by a bone fide garage, with paperwork to back it up.

    if i trade to another trader I am guessing thats their job before they retail to mr customer?

    Total losses may only be settled at trade prices which will be at least a third under what you expect to get.

    that is fine as with the cars I drive (older cars) the increase in premium if i was to claim, and the £250 excess I would never claim anyway if they got stolen on a private policy. I am fed up of paying £1900 for insurance that is worthless to me, so may as well pay £670 for the same thing.

    If you do get into selling cars, you'd be mad not to have Public Liability, in fact I wouldn't sell you a policy unless you did.

    could you tell me why i need this please? in what circumstances would i need this?

    May I ask who the insurer is please? Seems cheap....too cheap.

    if you search google 'motor trader insurance' the top 2 or 3 from there. i havnt even really shopped around yet either.

    And forgot to mention, you will have to prove that your own vehicles are an asset of your car sales business.
    how would i do this?

    If you are using the vehicles for selling solar panels you will need additional business use.
    commute to single place of work to do this.

    thanks
    when the tide goes out we shall see who has been swimming naked
  • Sally_ASally_A Forumite
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    Quote:
    Originally Posted by Sally A viewpost.gif
    ...and if you have a bump the insurers may demand Proof of Trading.

    would receipts/ photocopies of v5s of cars bought and sold be enough?

    It would be a start, but they may also demand sight of your books, purchase invoices and sales receipts.

    They will also insist that any vehicles have a pre sale check over by a bone fide garage, with paperwork to back it up.

    if i trade to another trader I am guessing thats their job before they retail to mr customer?

    You mentioned you may sell direct to the public.

    Total losses may only be settled at trade prices which will be at least a third under what you expect to get.

    that is fine as with the cars I drive (older cars) the increase in premium if i was to claim, and the £250 excess I would never claim anyway if they got stolen on a private policy. I am fed up of paying £1900 for insurance that is worthless to me, so may as well pay £670 for the same thing.

    If you do get into selling cars, you'd be mad not to have Public Liability, in fact I wouldn't sell you a policy unless you did.

    could you tell me why i need this please? in what circumstances would i need this?

    If you sell a defective vehicle which results in injury or damage, as seller, it could fall back on you, and even if you are found not liable, it's good to have an insurer to defend your corner.

    May I ask who the insurer is please? Seems cheap....too cheap.

    if you search google 'motor trader insurance' the top 2 or 3 from there. i havnt even really shopped around yet either.

    Make sure you get a fully contract certain quote, things to watch out for are vehicles parked on the drive at home - some policies are purely Road Risks only, look for basis of settlement, look for the Conditions ie your part of the bargain, and read the Exclusions (in fact read the Exclusions twice).

    And forgot to mention, you will have to prove that your own vehicles are an asset of your car sales business.
    how would i do this?

    As you will be a sole trader I'm guessing, just make sure they know your own vehicles are your personal assets, not a lot of the cheaper insurers will do this, and they expect to see a paper trail for your own vehicles going through the books.

    If you are using the vehicles for selling solar panels you will need additional business use.


    commute to single place of work to do this.

    Should be OK with this.

    thanks

    Another thing to bear in mind is the new Continuous Insurance Enforcement, a vehicle has to be insured and taxed, or SORN'd, it's unlikely that the main dealer will give you a vehicle with more than one months tax on it. Some of the cheap end of the insurers may do the MID for you but charge you for each update.

    If you sell to a member of the public, and say the gearbox goes - they will be knocking on your door for either a full refund, or repair - could be costly - they might also be after you for loss of use or demand a hire car if you are found to be at fault - believe me, the general public expect the earth from Motor Traders; and will rip you to bits with Sale of Goods Act etc. You could potentially be left with a very expensive lemon sitting on your drive.

    If I was your broker I'd also talk you through the benefits of Commercial Legal Expenses to deal with any contractural disputes that may arise - even if you don't use it you would still have a Legal Helpline.

    Sorry to be all doom and gloom, but for your own financial security, it goes a lot deeper than saving £1300.


  • SystemSystem Forumite, Community Admin
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    Would traders insurance cover your spouse for their car? I would think it would only cover employees; so you could no longer be a sole trader if your spouse needs to drive a vehicle.
  • !!!!!! wrote: »
    Would traders insurance cover your spouse for their car? I would think it would only cover employees; so you could no longer be a sole trader if your spouse needs to drive a vehicle.

    yes, and apparently I just notify the insurer who updates the MID database so the police wont be pulling her every 2 minutes as the registration will flash up as insured.

    Sally A. I think the trading to the trader option is better than the liability risks from the public. I do know all too well how much they expect from dealers/traders!!

    thanks
    when the tide goes out we shall see who has been swimming naked
  • SystemSystem Forumite, Community Admin
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    So I take it that you own the partner's vehicle and not the partner?
  • vaiovaio Forumite
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    !!!!!! wrote: »
    Would traders insurance cover your spouse for their car? I would think it would only cover employees; so you could no longer be a sole trader if your spouse needs to drive a vehicle.

    I think sole traders can have employees and its use in this context means “not a limited company” rather than “one bloke working by himself”.
  • Sally_ASally_A Forumite
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    Just please be very, very careful. Insurers that do the low rated online Motor Trade Insurance will look for reasons not to pay, rather than a broker will look for reasons why they should pay.

    I don't want to cause a fuss, but lets just say this is how our well loved Alternative Caravan Club members, and cash for crash scammers manage to make themselves just a little bit legal. The online questions are so flakey, it should always go in favour of the customer when taken to the Ombudsman in the event of a claim. But is also another reason why Tradex rates have almost doubled (along with their £13m payout in Guernsey).
  • Sally_ASally_A Forumite
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    vaio wrote: »
    I think sole traders can have employees and its use in this context means “not a limited company” rather than “one bloke working by himself”.

    Yes they can, but he hasn't got employees, otherwise there's EL to consider (another £300 please - kerching!), immediate family do not count as compulsory EL.
  • vaiovaio Forumite
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    Sally_A wrote: »
    Yes they can, but he hasn't got employees, otherwise there's EL to consider (another £300 please - kerching!), immediate family do not count as compulsory EL.

    That was sort of my point, an employee of a sole trader could be covered by the motor insurance and as a spouse wouldn’t need the liability insurance
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