How to prove you're a legitimate motor trader

By Road Runner

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In the competitive world of vehicle sales and servicing, proving you’re a legitimate motor trader is essential – not just for building trust with customers, but also for staying compliant with insurers and regulators. Whether you’re operating from a forecourt or trading part-time from home, having the right documentation and insurance in place is key to demonstrating your credibility.

Why proof of trade is important

Being able to show proof of trade is more than just a formality. It’s often required when applying for or renewing motor trade insurance, especially if you’re seeking road risk cover. Insurers need to verify that you’re actively involved in the motor trade to ensure you’re eligible for a motor trade policy. Without sufficient proof, you risk having your policy declined, cancelled, or voided – leaving you exposed legally and financially.

Key documents you need

To prove you’re a legitimate motor trader, you’ll need to maintain and present a range of documents. These typically include:

Sales invoices – showing vehicles bought and sold under your business name
Purchase receipts – for vehicles or parts acquired for resale or repair
Stock lists – detailing current vehicles in your possession for trade
Service records – if you offer repairs or maintenance services
Business bank statements – showing transactions related to motor trade activity
Advertising records – such as online listings, printed ads for vehicles/services, or a presence on social media

These documents help demonstrate consistent trading activity, which is crucial for satisfying insurers and regulatory bodies.

Templates and examples

Using standardised templates can make your documentation more professional and easier to manage. Here are a few examples:

Vehicle purchase invoice template: Includes buyer/seller details, vehicle information (make, model, VIN), price, and date
Sales receipt template: Confirms the sale of a vehicle, including payment method and warranty terms
Stock inventory sheet: Lists all vehicles in stock, their condition, acquisition date, and expected sale price
Service log template: Tracks repairs or maintenance performed, including parts used and labour hours

These templates not only help with organisation. but also serve as reliable motor trade policy proof when requested by insurers.

Tips for maintaining accurate records

To ensure your records are always up to date and compliant:

Go digital: Use accounting or inventory software to track transactions and stock
Keep everything dated: Dates help establish a clear timeline of trading activity
Back up regularly: Store copies of documents both physically and digitally
Be consistent: Use the same format for invoices and receipts to avoid confusion
Review monthly: Set aside time to audit your records and ensure nothing is missing

Final thoughts

Proving you’re a legitimate motor trader isn’t just about ticking boxes – it’s about protecting your business and building trust. With the right proof of trade and motor trade insurance documentation, you’ll remain well-positioned to operate confidently and legally. Whether you’re applying for road risk cover or expanding your operations, solid records are your best ally.

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Get expert advice on motor traders insurance with Road Runner today.

Need help getting your documents in order or finding the right motor trade insurance? Contact Road Runner today to ensure you have the right motor trade policy proof and coverage to keep your business moving forward.

You can get a quote here or call us on 03301 00 87 20.

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Road Runner is a trading name of Howden UK Brokers Limited, which is authorised and regulated by the Financial Conduct Authority No. 307663. Registered in England and Wales under company registration number 02831010. Registered Office: One Creechurch Place, London, EC3A 5AF. Calls may be monitored and recorded for quality assurance purposes.