A Motor Trader is an individual whose profession is directly linked with Motor Vehicles. This can range from selling vehicles for a profit, repairing vehicles for its customers, or have a business which is directly engaged in the supply of vehicles, such as car hire or finance vehicles.

A few things to consider when forming a Motor Trade business are as follows:

• Customer portfolio – Just like when forming and starting up any business, the main income is sales revenue and thus survival will come from sales made to clients. Having an established and ready market to enter will help ensure a positive start and a more stable business, which is a great achievement considering 60% of new small start-up businesses fail within the first 3 years. This diverse customer portfolio can be established via many methods, such as growing popularity on social media sites (Facebook, Instagram, Twitter etc), networking with other Motor Traders and creating your own website.
• Creating a website – This is linked with the above point to an extent. Making an easy-to-follow website will attract a wider range of customers. It is important on the website to include all necessary information to satisfy and fulfill the customers needs, such as addresses, contact numbers, services that are offered, prices etc. There are a few brilliant sites to use to make a website (WIX being the most popular), with others such as GoDaddy and Create. Always put yourself in the customers shoes when creating and reviewing your website, as it’ll provide the most accurate representation of what improvements need to be made.
• Insurance Cover – Having substantial insurance cover is a must when forming a Motor Trade business. This ranges from all sorts such as the standard Road Risks cover, to Employers Liability, Public Liability, Goods in Transit cover, Products Liability etc.

If the business employs staff, it is a legal requirement to hold Employers Liability insurance cover with a £10,000,000 indemnity limit. Employers Liability will protect employees of a firm from any sort of injury occurred within the workplace.

Public Liability will most likely to be purchased if there is an active brick & motor store, to protect the public from any fortuitous events from occurring. Property insurance will most likely be purchased if the Trader is conducting its business from a store. This will transfer the risk from the proposer to the insurer of let’s say hypothetically, the store going up in flames or damage caused to the property due to faulty equipment.

Furthermore, the given Motor Trader may well need to hold Products Liability cover, which protects you against the cost of compensation for: personal injuries caused by your faulty product, loss of or damage to property caused by your faulty product, and finally unforeseeable circumstances such as product faults that your quality control system could not identify.

In summary of the insurance cover provided, the level of cover required is heavily dependent on the nature of how the Motor Trader conducts its business. For example, a Motor Trader who only delivers vehicles to clients will most likely needs Road Risks only, whereas a Motor Trader who has a store, employs 8 staff, and repairs vehicles will most likely need Employers Liability (mandatory), Public Liability, Products Liability and Goods in Transit cover.

To conclude, forming a Motor Trade Business is a risk what could very well pay off for the better providing you have all necessary measures such as the mentioned above in place. The Motor Trade business is seeing vast expansion globally and is a very profitable sector, providing you follow correct protocols. Here at Five Islands we specialise in all desires to ensure your Motor Trade business is best suited both to yourself and more importantly your customers.