Used Car Dealer Insurance Cost

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Used car dealers rely on selling expensive vehicles and accessories to generate revenue. As a result, it can be devastating when a vehicle or other equipment is lost, damaged, or stolen. In order to avoid facing income loss or bankruptcy in these circumstances, business owners need used car dealer insurance to protect them against the many unique risks they face on a day to day basis.

Read below to learn about the cost of used car dealer insurance, what it covers, what types of policies you may need, and more.

We'll Cover

  • How much does used car dealer insurance cost?
  • What is used car dealer insurance?
  • What does used car dealer insurance cover?
  • Benefits and risks
  • Business that need auto dealer insurance
  • Tips for buying
  • Types of insurance used car dealers may need
  • FAQ

How Much Does Used Car Dealer Insurance Cost?

The cost of used car dealer insurance depends on many factors, including your claim history, the size of your business, your coverage level, and more.

You can expect the cost of used car dealer insurance to start at:

  • $39/month for General Liability
  • $49/month for General Liability + Property Liability
  • $49/month for Workers’ Compensation + Business Owner’s Policy (BOP)

What Is Used Car Dealer Insurance?

Used car dealer insurance offers coverage to protect auto dealers from incidents that may result in extreme financial loss.

For example, if some of your vehicles are vandalized, an employee steals expensive equipment, or a customer files a claim against your dealership for damages due to a faulty vehicle, your company may be on the hook for the expenses.

To avoid bearing the brunt of these difficulties, it’s important to take out a comprehensive used car dealer insurance policy package that includes important coverage such as workers’ compensation, general liability, product liability, and more, depending on your needs.

What Does Used Car Dealer Insurance Cover?

A typical used car dealership insurance policy will cover:

  • Bodily and personal injury
  • Property damage
  • Loss of income due to robbery, burglary, theft, embezzlement, etc.
  • Stolen business property
  • Vandalism
  • Product liability
  • Medical costs and missed wages for employees injured on the job

Depending on your specific needs and risk factors, your policy may include more or less coverage than described above. Be sure to review your policy closely to fully understand your coverage.

Benefits

Used car dealer insurance offers several advantages, including:

Protect your inventory: Used car dealer insurance will cover you and your company if any of your inventory is lost, damaged, stolen, or vandalized.

Cover legal expenses: If a customer or employee makes a claim against your business, used car dealer insurance will cover legal expenses, including attorney fees and settlements.

Comply with regulations: Workers’ compensation and other insurance policies may be required depending on your state. Used car dealer insurance will help you comply with these regulations as they apply.

Types of Insurance Used Car Dealers May Need

Auto dealers should consider the following policies to ensure they are sufficiently covered:

Business Owner Policy (BOP): A policy package that includes commercial property insurance and general liability insurance. A cost-effective solution for small and mid-sized businesses.

Workers' Compensation Insurance: Covers medical costs, rehabilitation costs, and missed wages for employees who become ill or injured while at work.

Crime insurance: Provides coverage for loss of income due to robbery, theft, burglary, forgery, embezzlement, and similar crimes.

Product Liability Insurance: Protects your business from lawsuits made by customers who are injured or experience other damage caused by a product that you sold to them.

Tips for Buying

Follow these tips to help you find the right used car dealer insurance policy:

Compare quotes: To find the best rates for used car dealer insurance, it’s important to compare quotes from at least three to five different insurance providers.

Identify your risks: There are many different policies that you may or may not need depending on your risk factors. Be sure to carefully review your business risks to determine what level of coverage you need.

Review your policy: Before signing an agreement, review your policy closely to see if it offers sufficient coverage. If not, you may need to purchase additional policies to fill in the gaps.

FAQ

What risks do used car dealers face?
Used car dealers face many unique risks, such as stolen or vandalized vehicles or customer lawsuits due to faulty vehicles. Incidents like these can be very costly without the right coverage.

What is umbrella insurance?
Umbrella insurance refers to a policy package that is designed to fill in the gaps left by your existing policies. These policies are only necessary if your current coverage is not sufficient.

Do used car dealers need workers’ compensation insurance?
Whether or not you are legally required to have workers’ compensation insurance depends on your state laws, so be sure to review your local regulations to find out.

However, whether or not it is legally required, it is always a good idea to have workers’ compensation insurance so that you and your employees are taken care of in case of an accident.

Summary

Used car dealer insurance is designed to protect auto dealers from the unique risks they face on an everyday basis. Without this coverage, used car dealers are left open to financial damages resulting from lawsuits, inventory loss, or other circumstances.

Understanding the cost of used car dealer insurance, what it covers, and what level of coverage you need will help you find the right policy to protect your business.