Used Car Dealers Insurance

If you own an auto dealership, there are many thousands of dollars worth of inventory sitting out in the open in your lots. Naturally, you need to insure that inventory to protect it, along with the rest of your business. This post will go over what you need to know when shopping for commercial insurance for a used car dealership.

Why Car Dealer Insurance is Necessary For Used & New Auto Sales Businesses

Whether you are a used or new car dealer, or you sell boats, trailers, farm equipment, or other types of vehicles, you need auto dealer insurance. Picture these scenarios:

• During a test drive, a customer gets into a collision in one of the vehicles you are selling. Commercial auto insurance can cover you.

• A visitor to your dealership slips on your floor after you cleaned it, and is injured. They sue you for their medical bills. Your insurance can help cover these.

• Someone steals or vandalizes one of the vehicles in your lot. You can use car dealer insurance to help pay for repair or replacement.

Types of Insurance For Auto Dealers

Here are some of the most popular types of insurance policies for auto dealerships:

• General liability insurance: This coverage protects you if a third party is injured on your premises, or if their property is damaged.

• Commercial auto insurance: You get this type of insurance to protect your commercial vehicles, including those you are selling, and any others you use for your business. Collision coverage, personal injury protection, and comprehensive coverage are all part of a commercial auto insurance policy. You may want to consider spending extra to ensure you get excellent coverage, including added endorsements.

• Commercial property insurance: An auto dealers liability insurance policy only covers other peoples’ property or injuries. If you want to cover your own commercial property, you need this type of insurance policy as well.

• Business interruption insurance: If you have to close your business temporarily while doing repairs or such for a covered situation, then you can cover some of your lost income with business interruption insurance.

• Business owner’s policy: You can get this type of policy, abbreviated as “BOP,” if you want to combine general liability insurance with commercial property insurance and/or business interruption insurance.

• Errors and omissions coverage: Say you or one of your workers fails to disclose something to a customer, and that customer later claims that the negligence resulted in injuries or damage. Errors and omissions coverage can help you pay legal fees or other costs in these scenarios (including if the accusations are false).

• Workers’ Comp: You need to buy workers’ compensation if you have any employees (even just one). If your workers are injured or get sick on the job, workers’ comp pays medical costs and missed wages.

• Employment Practices Liability Insurance (EPLI): If an employee accuses you of unfair practices (i.e. harassment or wrongful termination), this type of insurance can help you to pay your legal costs.

• Garage keepers liability insurance: Some auto dealerships also own repair shops. What happens if you are repairing a vehicle or storing it for later work, and it gets damaged? Garage liability insurance can provide you with protection.

• Garage liability insurance: This is just general liability insurance for a repair shop. It can pay out if a third party is injured on your premises, and/or their property is damaged.

• Dealer’s open lot insurance: There is a lot that can go wrong with an open lot. Someone might steal or vandalize a vehicle. Or a hail storm could damage the cars sitting out on your open lot. Or they could be damaged by fire, lightning, or any number of other things. You can protect them with open lot insurance.

There may be other types of insurance that you find useful for your dealership as well, but we have covered the basics.

How Much Does Insurance Cost For Car Dealers?

How much your used car dealers insurance coverage needs cost depends on a number of different factors. These include the following.

• How many vehicles you need to insure, and the values of those vehicles. As there can be quite a wide range here, the price range for car dealer insurance also can range considerably. A small dealer selling used Fords is not going to be charged as much as a large dealer selling new Porches.

• The size of your payroll. More employees with higher salaries means more expensive workers’ comp plans.

• The geographical location of your lot, and the specific risk factors for open lots in that area.

• The nature of your commercial property that needs to be insured.

• The presence or absence of a garage on your premises and additional services you may offer.

• If you have a larger deductible, your monthly premiums will be lower. If you choose a smaller deductible, you will have higher monthly premiums.

• Your maximum coverage amount. The higher it is, the pricier the plan will be.

• Whether you have made claims in the past. If you have a claim-free history,  your policies may cost less.

• Some business owners may qualify for discounts based on various factors. You should ask the insurance company whether they have any you might qualify for. Bundling your policies or installing a security system are examples of things that might let you qualify for a discount.

Get Your Quote For Used Car Dealer Insurance Online

To get auto dealership insurance quotes online quickly and easily, we recommend visiting Tivly. Tivly has extensive experience working with used and new car dealers, and can connect you with the strong coverage you need to protect your dealership.