Risk Management is a key issue for Motor Traders

motor trade insurance - key fob

Good risk management prevents disruption to business, and can also have a big impact on insurance costs.

In order to run a successful motor trade business, it’s vital to maintain your most important assets—your vehicles. Whether they are located in the forecourt, the garage or the workshop, consider this guidance to keep your vehicles safe and secure:

Preventing theft:

Vehicles are probably the single most popular target of crime because they are valuable and relatively easy to steal and dispose of. To put the brakes on vehicle theft, try the following prevention tips.

  • Make it clear that your premises are secure and not an easy target. The best way to do this is by installing security devices such as CCTV cameras, security alarms and security lighting. Make sure these are very visible to provide a deterrent.

  • Ensure the physical security of your site is tight. Make sure locks, shutters and gates to parking facilities are adequate. Key security is also important –keys should be kept in a suitable safe when not being used.

The security of your premises and stock will be a key consideration for insurance underwriters in determining whether they will provide a quote, and what the premium will be. If you’re a part-time motor trader parking your stock on the street, then your premium will be higher than a motor trader who can store vehicles in a secure and locked garage.

Similarly, if you’re a mobile mechanic who has to store tools in a vehicle overnight, the more secure that vehicle is, the lower your premium will be. Immobilisers, trackers and alarms installed on your mobile mechanic vehicle as well as where that vehicle is kept will help reduce your insurance premium.

Training staff

One of the best ways to protect your vehicles is to implement a proper employee vetting system and training programme within your workforce. Be wary of any job applicants with a criminal history or limited experience. Always ensure staff members possess the appropriate education, competencies and licence for their job role. Be sure to train all staff members involved in the operation of on-site vehicles on these topics:

  • How to assess the vehicle for health and safety concerns or defects
  • Required safe driving practices (e.g. not using a mobile phone while driving, wearing a seatbelt and not exceeding the speed limit)
  • Locations and routes that are acceptable for vehicle operation
  • How to respond to an emergency situation (e.g. accidents or breakdowns)

Conducting test drives

It’s crucial that employees responsible for test drive operations review the customer’s licence, ensuring it’s not expired or fake, record the customer’s insurance details and contact information, require the customer to provide the keys to their personal vehicle or a credit card as collateral, and run a background check if needed. In addition:

  • Make sure that the vehicle has enough fuel and that all systems are functioning properly. Inform the customer of all relevant safety and operation procedures.
  • Establish a set route nearby the property where the customer can perform a test drive, and have an employee travel in the passenger seat of the vehicle. Be sure this employee is licensed, competent and equipped with a mobile phone in case of an emergency.

Vehicle technology

In an era of constantly evolving technology, it’s important to routinely train staff on significant changes to prevent vehicle misuse, breakdowns or advanced forms of theft.

Be sure to only allow competent staff to operate new technology or vehicle systems, such as hybrid or electric cars. Also, consider equipping your vehicles with an on-board diagnostics port lockable device for maximum protection. 

Investing in risk management will help ensure your business runs smoothly, helps present a professional impression to your customers, and demonstrates to underwriters that your business is a good risk and deserving of a competitive premium.