Motor trade insurance is a specialist category of business insurance designed for businesses that deal with vehicles commercially — whether that's selling them, repairing them, modifying them, or driving them on behalf of others. In New Zealand, the motor trade sector employs tens of thousands of people across approximately 4,000 MTA-member businesses and thousands of independent operators. Yet motor trade insurance remains poorly understood, even by experienced operators who have been in the industry for years.
What is Motor Trade Insurance?
Motor trade insurance is an umbrella term for a package of insurance covers that address the specific risks faced by businesses operating in the automotive sector. Unlike a standard business insurance package — which might cover your building, contents and liability — a motor trade policy addresses the unique exposures of the industry:
Who Needs Motor Trade Insurance?
If your business involves vehicles in a commercial capacity, you need motor trade insurance. This includes:
Car Dealers — whether you're a franchise showroom selling new Toyotas or a small yard selling 10–20 Japanese imports a month, vehicle stock, road risk and public liability are essential.
Mechanics and Repair Garages — with 2,251 MTA-member repairers in NZ, mechanical workshops are the most common motor trade business. Customer vehicle cover, professional indemnity and tools cover are the core requirements.
Auto Electricians — increasingly critical as EVs and hybrids require specialist electrical knowledge. Professional indemnity is particularly important given the long-tail nature of electrical fault claims.
Panel Beaters — spray booths create significant fire risk; professional indemnity is essential in an industry where insurers scrutinise repair quality closely.
Tyre Dealers — product and public liability is critical, given that incorrect tyre fitting or specification can have fatal consequences.
Mobile Mechanics — a growing category, requiring portable cover for tools, public liability for third-party property damage, and road risk for driving customer vehicles.
Vehicle Importers — marine cargo cover for in-transit vehicles, plus yard stock cover and dealer liability.
The Core Covers in a Motor Trade Policy
1. Road Risk Cover
The legal and financial right to drive vehicles in connection with your business — test drives, auction pickups, delivery runs. Without road risk, every vehicle you drive on NZ roads is uninsured for third-party damage.
2. Vehicle Stock Cover
Covers your stock of vehicles on premises against fire, theft, storm and accidental damage. For a dealer carrying $500,000 in stock, this is the most financially critical cover in the policy.
3. Customer Vehicles Cover
Protects your legal liability for loss or damage to customers' vehicles while they're in your care, custody or control. Essential for workshops, panel beaters, and any business that takes in customer vehicles.
4. Public and Product Liability
Covers third-party injury and property damage claims arising from your business operations. Also covers product liability for vehicles and parts you have sold that cause harm.
5. Professional Indemnity
Covers financial loss claims arising from your professional work — faulty repairs, incorrect advice, WoF errors. Given NZ's strong Consumer Guarantees Act, this is increasingly important for all motor traders.
6. Tools and Equipment Cover
Protects your workshop tools, hoists, diagnostic equipment and other machinery against theft, fire and accidental damage.
7. Property and Premises
Covers your building, fitout and contents against fire, storm, flood and earthquake.
8. Business Interruption
Replaces lost revenue and covers ongoing costs when your business is forced to close due to an insured event.
How Much Does Motor Trade Insurance Cost?
Motor trade insurance premiums vary widely depending on:
As a rough guide:
The best way to get an accurate premium is to speak with a broker experienced in motor trade insurance. They can access specialist markets and tailor coverage to your exact operation.
Key NZ Regulations Motor Traders Must Know
Motor Vehicle Dealers Act 2008 — dealers must be registered with MBIE. Appropriate insurance is part of operating as a registered dealer.
Consumer Guarantees Act 2003 — services must be carried out with reasonable care and skill. Repair workshops face direct liability under this Act when work falls short.
Health and Safety at Work Act 2015 — workshop operators have obligations to maintain safe working environments for staff and visitors.
Fair Trading Act 1986 — misrepresentation of vehicle condition at sale carries significant penalties.
Motor Vehicle Sales Act 2003 — anyone selling six or more vehicles per year must be registered as a motor vehicle trader.
Choosing the Right Motor Trade Broker
Motor trade insurance is a specialist product. Not all general insurance brokers have deep expertise in this sector. When choosing a broker, look for:
Getting Started
Ready to protect your motor trade business? Our independent advisers specialise in NZ motor trade insurance and can compare policies from leading providers to find the right cover at the right price. Complete our quick quote request and we'll be in touch within one business day.