Car sales yards are among the most common motor trade businesses in New Zealand — and among the most commonly under-insured. Whether you run a small used car operation from a suburban property or a busy forecourt with 50+ vehicles, getting your insurance right protects the business you've built and the customers you serve.
Who Counts as a Car Sales Yard?
A car sales yard is broadly any business that sells vehicles commercially — new or used, from a fixed premises. This includes:
Under the Motor Vehicle Sales Act 2003, you must register as a motor vehicle trader with the Motor Vehicle Traders Register (MVTR) if you sell six or more vehicles per year. Registration is administered by MBIE and carries ongoing compliance obligations — including requirements around vehicle descriptions, disclosure, and buyer rights under the Consumer Guarantees Act.
The Core Coverages Every Car Sales Yard Needs
1. Vehicle Stock Insurance
Your vehicle stock is your largest asset and your biggest insurance priority. Stock cover protects the vehicles you own against:
The sum insured should reflect the total replacement value of your stock at any time — including peak periods when your yard may be at maximum capacity. Underinsurance is a real risk: if your policy covers $300,000 of stock but your yard typically holds $400,000, you carry the shortfall in any total loss.
For Japanese import dealers, stock cover should extend to pre-compliance vehicles held in storage while awaiting entry certification. Confirm with your broker that the policy covers vehicles at all storage locations, not just your primary premises.
2. Road Risk Cover
Road risk is the legal permission to drive vehicles connected with your business on NZ roads. You need it for:
Third-party-only road risk is the minimum required by law, but for yards with newer or higher-value stock, comprehensive road risk is strongly recommended. The cost difference is modest; the gap in protection in the event of a test drive accident is significant.
3. Public Liability
Your forecourt is a public environment — customers walk through it, inspect vehicles, and test sit in cars. Public liability covers your legal liability if:
Commercial landlords almost always require public liability as a lease condition. Minimum limits are typically $1 million, but $2 million or higher is increasingly standard.
What Additional Cover Should Car Sales Yards Consider?
Professional Indemnity and Product Liability
Under the Consumer Guarantees Act 2003, vehicles sold to consumers must be of acceptable quality. Even a vehicle sold "as is" may generate a claim if the buyer can show it was not fit for purpose. Professional indemnity covers:
The Motor Vehicle Disputes Tribunal provides an accessible, low-cost forum for buyers to pursue these claims — which means your exposure to complaints is practical and common, not theoretical.
Business Interruption
If fire, flood, or another insured event forces your yard to close, business interruption cover replaces your lost income and covers ongoing fixed costs — lease, salaries, finance payments — while you rebuild or relocate. For a car yard with significant ongoing stock finance, this protection can be the difference between recovery and closure.
How Much Does Car Sales Yard Insurance Cost?
Premiums vary significantly depending on your stock value, location, claims history, and the security of your premises. As a rough guide:
These are indicative ranges only — your specific premium will depend on your claims history, security systems, and the insurers your broker can access.
The Most Common Coverage Gaps for Car Sales Yards
Based on common claims and broker experience, the gaps most often found in used car yard insurance include:
1. Underinsured stock: The sum insured hasn't been updated as stock values have increased — particularly relevant in the current market where vehicle prices remain elevated.
2. Pre-compliance vehicles not covered: Import dealers who hold pre-compliance stock need to confirm coverage extends to vehicles before entry certification, including at storage locations.
3. No customer vehicles cover: Some yards occasionally take in part-exchange or consigned vehicles from other dealers — if those vehicles are damaged in your care, you need bailee's cover, which is separate from your own stock policy.
4. Road risk limited to named drivers: Some older road risk policies name specific drivers rather than providing blanket cover for any employee or trade driver. If you have staff turnover or use casual drivers, check whether your road risk is blanket cover.
5. CGA liability not addressed: No professional indemnity or product liability cover to respond to Consumer Guarantees Act claims.
Getting all of this right starts with a broker who specialises in motor trade — one who understands the specific risks of a car sales yard and can structure a package that addresses them comprehensively.