Car Sales Yards Insurance

Car sales yards sit at the heart of New Zealand's used vehicle market. According to MBIE data, New Zealand has thousands of registered motor vehicle traders, the majority of whom operate as independent used car retailers. These businesses range in size from sole operators selling a handful of vehicles per year to established yards carrying 100 or more vehicles on-site at any time.

Vehicle Stock — Your Primary Exposure

For any car sales yard, vehicle stock is the dominant insurance concern. Stock cover protects the vehicles you own against fire, theft, storm, and accidental damage while they're on your premises. Getting the sum insured right matters — it should reflect the total replacement value of your stock at any point in the year, including peak periods when your yard may be fuller than average.

Used car yards face specific stock risks that differ from new vehicle dealerships: older vehicles may be more susceptible to mechanical failures that create liability issues, vehicles may have undisclosed history or condition issues, and import yards face the additional complexity of pre-compliance stock that has a different valuation profile than fully compliant vehicles.

Road Risk — Trade Plates and Test Drives

All car sales yards need road risk cover for driving vehicles on NZ roads in connection with the business. This includes test drives with customers, collecting vehicles from auctions or private sellers, trade plate movements, and taking vehicles for warrant of fitness inspections or pre-sale mechanical checks. Road risk can be written on a third-party-only basis (minimum required by law) or comprehensive (recommended for yards with newer or higher-value stock).

Public Liability — Customer Visits

Car sales yards are busy public environments. Customers walk your forecourt, inspect vehicles, climb in and out of cars, and test drive with you. Public liability insurance covers your legal liability for personal injury to customers or members of the public on your premises, and for damage to third-party property arising from your business activities. Slip and fall claims on a wet forecourt, or a gate blowing open onto a neighbouring property, are the kinds of incidents that public liability is designed to cover.

Consumer Guarantees Act — Your Ongoing Exposure

Under the Consumer Guarantees Act 2003, vehicles sold to consumers must be of acceptable quality — fit for purpose, free from defects, and durable. Even if you sell vehicles "as is", the CGA gives buyers rights of recourse if a vehicle fails within a reasonable time. Professional indemnity and product liability cover helps protect against claims brought by buyers after sale. Given the Motor Vehicle Disputes Tribunal's accessibility to consumers, claims are not uncommon — and even successfully defending a claim costs legal fees.

Warranty Products and MBI

Many car sales yards offer or sell Mechanical Breakdown Insurance (MBI) or warranty products as part of the sale. If you distribute or sell these products, you may have additional obligations — speak to your broker about how your motor trade policy interacts with any warranty products you offer.