Unaccompanied demonstration – are you insured?

As almost any motor trade dealership will know, the law relating to insurance and what’s still colloquially called the “road tax” is complicated.

Recent changes are still being digested too – and just how all this affects insurance cover on unaccompanied demonstration test-drives can be difficult to get one’s head around!

We’ll try to clarify and summarise the position here.

Unaccompanied test drives

Dealerships don’t have a universal policy here. Each one might adopt a different approach including:

  • permitting unaccompanied test drives for potential buyers, already known to the dealer/ dealership;
  • being very relaxed and allowing almost any potential customer to perform a test drive;
  • not permitting unaccompanied test drives under any circumstances;
  • only allowing such testing on demonstrator vehicles for potential new vehicle buyers, while making all pre-owned vehicle testing accompanied;
  • varying what is permitted based upon the type and cost of the vehicle concerned or sometimes based upon their perception of the responsibility and trustworthiness of the potential buyer; etc.

This list is far from exhaustive and it indicates how varied your potential motor trade insurance needs may be, based on your stance.

It can though, become even more complicated due to the variable status of the vehicle under consideration. It may be:

  • unlicensed / licensed;
  • new / used;
  • on existing registration or trade plates;
  • taxed, untaxed or SORN.

What do all these potential combinations mean for a traders car insurance policy?

Insurance implications

It’s perhaps important to re-state the basics:

  • if you own the car or it is in your charge, then you are responsible for ensuring that it is covered by at least the minimum insurance as required by law BEFORE allowing it to be driven on the public highway;
  • you cannot assign your responsibilities away by, for example, claiming that a potential buyer told you that his or her insurance would cover them – you would need to verify that by inspection;
  • it would be an offence to allow a member of the public to take a car for an unaccompanied test drive on trade plates (or borrow it overnight for the same purposes). It would also put at risk elements of any insurance cover you might have.

What does this mean for your traders’ car insurance policy?

Do keep in mind that the only way to specifically answer this would be to consult the detail of your existing policy, and the company your policy is held with, but in essence these are the key considerations:

  • your policy may cover vehicles for demonstrations or test drives but ONLY if accompanied;
  • it’s possible that your motor trade business insurance might cover unaccompanied test drives but that might only apply to vehicles that are on valid plates and taxed (typically a used car scenario);
  • some policies may only permit test drives on new vehicles if they’re on trade plates – that would effectively be a de-facto exclusion of unaccompanied test drives of new unregistered and by definition, untaxed, vehicles;

Summary and action

Some motor trade dealers are very relaxed about test drives whilst others are unaware of how complex the insurance position might be, depending on what they had permitted and the status of the vehicle involved.

Both of those positions might prove to be expensive errors should an accident arise on a test drive.

As a specialist motor trade insurance broker, Aston Scott can help you with your motor trade insurance and to understand the implications of some of the above combinations of circumstances.  Why not call us to find out more on 0330 085045?

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