The Covid19 pandemic, by its very nature, has been bad news for a lot of people. A group especially hardest hit were motor traders. Especially for entrepreneurs who were not seemingly covered entirely by the Government's Furlough scheme. That said, being part time means you were either in full time education, had a full time job or were semi-retired so your part time motor trading business may have faltered for a short while but your basic income / benefits were secured in part. Life did not halt entirely for full time car dealerships with premises, though not considered essential businesses, they were able to offer service plans and repairs. This did not prevent the British car industry as a whole losing £22 billion pounds in turnover while closed to sales however. Bike shops were considered essential. Yet the fact the majority of the population were advised to use SORN on their own vehicles as Lockdown ensued, meant people were simply not needing to purchase a car even via click and collect.
Insurance premiums did drop for the majority of traders but did the pandemic have the same impact on part-time motor trade insurance? The answer is yes. Falling the most since 2015. Lockdown for those months meant no individual could travel outside their area unless it was considered essential. Buying a car was not as worthy as shopping for food. Effectively the part time dealers buying and selling cars were restricted to purchasing cars without viewing or test driving. Impossible. One person who did drive 100 miles to do so was taken to court and fined.
Working from home car traders were stuck with purchased vehicles on their property, which is still not covered by home insurance. Customer visitations were not possible due to the Covid bubble rules and social distancing measures. Insurers would have needed to address this by allowing reduced coverage for certain liabilities. If furlough money was enough then a swathe of policy particulars could be dropped. Indemnity insurance suspended, liability insurance cancelled, demonstration cover and other added options such as all road risks removed.
Undoubtedly some part time motor traders would have used this time to work on vehicles they had purchased but would have also been limited in their ability to test drive - other than retaining trade plate registration and visiting the shops. The process of buying and selling cars was therefore paused for this duration both at dealerships and part time trader's home addresses.
12th April 2021 saw lockdown restrictions eased in England. With Wales, Scotland and Northern Ireland being able to issue their own guidance. A lot of part time motor traders will need to get their policy particulars up to date and while their current insurance providers have been most helpful, now is probably the best time to switch motor trade insurance and see if there are better deals being offered. Insurers are hungry for business.
If a driver has convictions or points the this can lead to additional issues getting cover, part time traders looking to start buying and selling cars again - firstly selling their old stock that was in play before lockdown was enforced, should contact a specialist motor trade insurance broker to re-engage their policy and find out if there is a cheaper policy or discounts available. SORN will need to be removed from the Motor Insurance Database (MID), indemnity, breakdown recovery, windscreen recovery, third party fire and theft and all road risks will need to be either reactivated or purchased with a new policy.
The good news is it will take a while for monthly and annual premiums to reach a peak again. As trading picks up, more people return to normal clogging up roads. It is inevitable that collisions, thefts, damage and parts failures will occur and start to rise again. While social distancing is still recommended and that you restrict distance travelled, Freedom Day for England is very much car flipping day too.
You can take affirmative action to improve your situation by focusing on what’s in your control. Your goal should be to show insurers that your convictions are in the past, and that they don’t apply to you anymore.
Below are a few actions you can take to try to lower your insurance premium:
Emerging from months of restrictions is going to see many people struggle to adjust. A quick run down of the aspects you need to ensure are in place both within your policy and general part time motor trader business are as follows:
1. Before you do anything, ring your motor trade insurer and reactivate all prior policy particulars. Drivers with drink drive DR10 bans will alter the situation. Make sure you are still covered for all road risks, work indemnity and product liability. Select comprehensive, fire and theft or Third Party only.
Reactivate Demonstration cover and Vehicle sales insurance and any Employer's insurance if bringing staff back in. On a side note, be sure to cancel furlough payments if not needed. Get any changes in writing and ask the insurer to send the newly updated policy immediately as proof the changes were made as requested. Get more information and compare full and part time traders polices here.
2. Or switch motor trade insurance provider to find a better deal. Seek out a specialist motor trade broker.
3. If you have not driven your SORN vehicles or maintained them for these lockdown months, start procedures to ensure you'll pass any delayed MOT certification. Shifting your stock is a priority so you can buy used cars that will undoubtedly now be being sold at a higher volume due to a stall in the market.
4. Restart marketing efforts, re-engage with your buyer network and start scouting for new used car deals. While furlough held together a lot of people's income, there may be more bargains than before the pandemic hit.
Overall, most part time motor traders and car dealerships in London will survive this lockdown period. Should another lockdown emerge in the coming Winter, it is probably best to start planning now just in case. Keep stock levels relative to how you foresee the ability to repair, revamp and flip. Remember also that to retain trade plates and not to see your motor trade insurance policy cancelled, that you still need to own / sell a certain amount of cars in any given period.