The Ultimate Resource for License Plates
Trade plates can save you time and money if you are a car dealer. When a vehicle is out on the road for a test drive or inspection, these plates are placed over the original registration. You can legally drive any vehicle in your possession because the need to tax each vehicle has been eliminated.
As a specialist in motor trade insurance, we've put together a guide to help you understand trade plates, including costs, the application process, and more.
What exactly are trade plates?
Motor trade licence plates are a service provided by the DVLA that allows motor industry professionals to save time and money by eliminating the need to tax each vehicle. When you only have a vehicle for a short period of time, it is not cost or time efficient to register it for road tax. When driving on the road, trade plates are only for motor traders and vehicle testers.
Why do traders plates need to be used?
If you work in the automotive industry, you will most likely benefit from trade plates. The following people are eligible for trade plates, according to the DVLA:
- Vehicle dealers, manufacturers, and repairers (including collection and delivery agents)
- Trailer manufacturers
- Valet parking and accessory fitters
- Vehicle testers
Trade plates eliminate the need to tax each vehicle you temporarily own. They are only for use in the motor trade, and you can only use them on one vehicle at a time. The fine for misusing trade plates can reach £5,000 in some cases.
When should you use trade plates?
The DVLA specifies that trade plates should only be used for "business purposes." Among these goals are:
- Accessories and equipment are tested or trialed during manufacture, repair, or modification.
- Going to or from a public weighbridge, or being subjected to an inspection by a person acting on behalf of the Secretary of State
- Testing or trialling for the benefit of a prospective purchaser, or for a person interested in promoting publicity
- It will be delivered to a location where the purchaser will keep it.
- For demonstrating its operation to the purchaser when it is handed over
- For delivering it from one part of the licence holder's premises to another, or for delivering/collecting it from one of your premises to another manufacturer/repairer/dealer.
- Going to or returning from a workshop where the car will be painted, repaired, or valeted (car washes excluded)
- For traveling to/from a manufacturer's, repairer's, or dealer's location where the vehicle will be transported by train, ship, or aircraft.
- For proceeding to/returning from any garage, auction, or any other place the vehicle is stored before or after it is offered for sale
- For traveling to/from a location where it will be tested or inspected
- Leaving/returning from a location where it has been broken up or dismantled
Trade plate regulations
Because you can't use a trade plate on an unroadworthy vehicle, you'll have to transport it to an MOT station if it doesn't have a valid MOT. Vehicles are required by law to be insured, and we provide road risk insurance or motor traders' combined insurance to meet these requirements.
Trade plates are only for use in the motor trade. They should only be used for the purpose specified on your application form, not for personal use in the evenings or on weekends.
Trade plates should only be used in the situations listed above, unless otherwise specified on the DVLA's website. If you intend to stop trading, you must surrender your trade license and request a duty refund.
How to Display License Plates
Trade plates must be displayed vertically, easily visible from 18-22 meters away, and on the inside of the vehicle. Despite popular belief, dealers are not permitted to display license plates behind the windshield. They must be visible from the outside of the vehicle and must not obscure the original registration plate.
You'll need a valid motor trade insurance certificate and a copy of it with your application to get your trade plates. The name on the certificate must match the name on the DVLA application.
Trade plate prices
Trade plates are reasonably priced, depending on when you apply. This is due to the fact that licenses expire on the 30th of June or the 31st of December, so the closer you are to the expiry date, the cheaper the licence will be. You'll likely get trade plate licences for 7-11 months at a time*
Costs vary by month and can be found in full on the DVLA website. The maximum fee for a 12-month license obtained in January is £180 for all vehicles and £101 for bicycles and tricycles. In January, a 6-month license will cost £99/£55. 55
*Prices are correct as of 15 April. 03 2023 Prices are subject to change; please visit the DVLA website for the most recent pricing: https://www.gov.uk/trade-licence-plates/apply
Obtaining a trade plate
To obtain trade plates, you must first apply for a trade plate license. When you get your license, you'll get your plates. You must apply by downloading a form and sending it to the DVLA. The form you require is determined by your status, as there is one for those obtaining their first trade license as well as those renewing or replacing theirs. The following forms are available:
- VTL301 for your first trade license application
- VTL318 to renew your business license
- VTL308 to surrender your trade license (duty refund)
- VTL310 is used to request a duplicate or replacement trade license (or plates).
With your application, you must include a copy of your Motor Trader's Insurance Certificate. Remember that you can apply at any time, but the cost is determined by how long the licence is valid in comparison to the 30th of June and 31st of December cut-off dates.
The maximum validity period is 12 months, starting with a January application and ending on December 31st.
Gallagher can help you protect yourself.
That's it—a guide to obtaining a trade plate license and protecting yourself from road tax issues as a motor trader. If you want to help protect yourself from liability claims and keep your customers, employees, and personal assets safe, contact our motor trade insurance today.
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