Insurance for car dealers. Like in any other business enterprise, it is a way of ensuring your business is protected from certain risks associated with everyday operations. It is a given that businesses are exposed to a certain level or type of risk, and it is crucial to put measures in place to mitigate it. And as we discussed in another blog article, insurance remains a handy financial risk management tool whereby the insured transfers the risk of potential financial loss to the insurance company in exchange for monetary compensation known as the premium.

As a car dealer, whether you are into the sale of Nigerian used, imported (popularly called Tokunbo), brand new cars, or a combination of these car types, it is needless to say you must have one insurance policy or the other. And if you are wondering why this article is just the right one for you.

From the moment of importing the car to the transit period to your car stand, or even when parked at your car lot or it is test driven by a potential customer, the chances that something could go wrong that expose your business to financial losses are there. Therefore as a business owner looking to maximise your profits and grow your business, insurance is highly recommended. 

Some of the most common risks that car dealers face in Nigeria include:

1. Car theft: Having a tracker installed in all cars in your stand is recommended but may not be the most optimal for various reasons. Getting an insurance policy covers theft and other aspects of your business, where having only a tracker may not be enough.

2. Carjacking: Certain car types in Nigeria are more exposed to this risk. For example, cars used for car-hailing services. Having insurance as a car dealer cannot be overemphasised.

3. Collision: Despite the mandatory law in Nigeria about the minimum insurance for every vehicle on Nigerian roads to have at least third-party motor insurance cover, we know that some drivers still don’t have one. Your insurer can help you cover damages/loss suffered during a collision if the driver at fault does not have insurance coverage or flees the accident scene.

Now that we have established the importance of having insurance for your car dealer business, the optimal insurance plan should be comprehensive to cover the different risks that your day-to-day business activity exposes you to. Therefore, it is critical to ask questions about insurance for car dealers, such as motor trade insurance, from an insurance policy provider if you don’t already have one. Motor trade insurance is an insurance policy for those operating a business that deals with the purchase, sale, repair, or maintenance of cars. Its coverage typically covers your vehicles, staff, and business premises. However, it is up to you to determine the right level of cover for your business. Your car dealership type, business size, and operations will inform the insurance policy that is best suited for you as a car dealer.

Ultimately, it is crucial that as you carry out your business, you have insurance for car dealers to help mitigate risk and protect your business from loss or damage.

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If you have questions relating to your insurance policies and do not understand the technical jargons, we can assist you with a FREE POLICY REVIEW to ascertain the level of cover you have and how to achieve more with your insurance policy. We are just a chat away on WhatsApp.

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