Trade plates for the motor industry: Everything you need to know

Red and white reg plates for the motor industry.

Trade plates are the red numbers on a white background that you’ll sometimes see alongside a vehicle’s original reg plates. But what do trade plates cover? What are they used for? And do you need them for your vehicle? 

Here, we take an in-depth look at the current trade plate rules in the UK. We’ll cover the reasons why a vehicle might be driving with trade plates, who needs them, and how to use them correctly.

What are trade plates for?

Trade plates (sometimes called trade licence plates or temporary number plates) are a tool used by businesses in the motor trading industry. They’re issued by the DVLA, which handles a combined 90 million records of drivers and vehicles in the UK and also collects Vehicle Excise Duty (VED). VED is also known as road tax, and it’s the reason behind the trade plates system. 

Trade number plates are a solution for motor traders and other motor trade businesses that keep vehicles for a short time before selling them on. Vehicle owners must pay car tax to own a vehicle legally in the UK and to drive on the public highway. Trade plate licences let motor traders cover this cost without having to calculate the car tax or get a Statutory Off Road Notice (SORN) for every vehicle they’re in charge of. This is useful as they may only be the legal keeper for a few days or weeks. 

A trade plate is a sign the business has paid a licence fee to the DVLA. This licence lets them move the vehicle around while it’s temporarily in their possession. 

This means trade plates are only used by people who work in motor trading, including:

  • Vehicle manufacturers
  • Car dealers
  • Trailer dealers
  • Mechanics and other businesses that repair or customise vehicles
  • Vehicle testers 
  • Valets

If you’re a private car owner, you’ll never have to worry about ordering, paying for, or displaying trade plates on your car. Likewise, if you’re selling your car privately, you won’t need a trade plate. In this case, the important thing to check is that anyone who comes to try your car out is insured to drive it. Check they have driving other cars (DOC) insurance before they take a test drive. 

Can you drive around on trade plates? 

Just as trade plates can only be used by motor traders and associated businesses, you can only drive around on them if it’s for an approved business purpose. The DVLA’s list of business purposes includes travelling to and from places where a vehicle will be:

  • Stored before it’s put up for sale, including garages and auction houses
  • Transported, including to stations, airports, and harbours
  • Repaired, repainted, or valeted — interestingly, this does not include car washes
  • Tested or inspected, usually including public weighbridges
  • Broken up or dismantled

Motor industry professionals can also drive on trade plates when they’re:

  • Trialling or testing the vehicle for someone who’s interested in buying or promoting the car
  • Demonstrating the vehicle before handing it over to the buyer
  • Delivering the vehicle to the buyer, ideally to the place where it will be stored until it’s registered and taxed in their name

If you’re driving on a trade plate, and you can’t prove it’s for one of these reasons, you could be fined up to £5,000. For example, if a motor dealer used a car on trade plates to drive home in the evening, they’d be committing an offence and could run into serious problems. 

How to get trade plates

Still wondering how to apply for trade plates? If you work in the motor trade industry and you need to transport a vehicle you own temporarily, you’ll start by filling in a trade plate application form. You’ll explain what your business does and why you need a trade plate. You’ll also include your business history, including your address and details of any previous trade plate licences, as well as payment details, of course.

There are different forms for applying for trade plates, which you can download and send to your local DVLA office:

  • The VTL301 for your first trade licence plate 
  • The VTL318 to renew a trade plate
  • The VTL310 to apply for a duplicate or replacement plate 

You can only get trade plates for cars that are roadworthy, insured, and have a valid MOT if they need one. To confirm this, you’ll include a copy of your motor trade insurance certificate when you send the paperwork to the DVLA. It’s really important the name on the certificate matches the one on your trade plate application exactly. 

How much does it cost to get a trade plate? 

Trade plate costs vary depending on when you apply for them. This is because you’re buying the licence to use the DVLA-issued plate, and the licence period always runs for six or 12 calendar months from 1 January to either 30 June or 31 December. 

For example, if you apply in January, you’ll buy a six or 12-month licence. You can then apply to have some of your money refunded if you no longer need the trade plate later in the year. But if you apply in September, you’re buying into an ongoing licence year. Then you’ll pay for the remaining three months of the current calendar year, then renew your licence for a further six or 12 months if you’re still going to need the trade plate after the new year. 

So, how much are trade plates? At the time of writing, a 12-month trade plate licence costs £165, or £111 for bicycles and tricycles. A six-month licence, which expires at the end of June, costs £90.75 or £61.05. You can find out the most up-to-date pricing information on the DVLA website

If you don’t need the plate for the full six or 12 months, you can use the VTL308 form to apply for a tax refund (also called a “refund of duty paid”) for the months you paid for but didn’t use. Or, if you don’t apply to renew the licence, the DVLA will cancel it automatically. If you apply for a refund, you’ll also have to surrender the plate and send it back to the DVLA. 

Once your trade plates arrive, you’ll have to fit them to the vehicle. It’s common to see trade plates displayed on the dashboard or parcel shelf, but this is technically against the regulations. According to the DVLA, trade plates have to be:

  • On the front and back of the vehicle 
  • On the outside of the vehicle, as opposed to behind the windscreen
  • Easily readable from 20m 
  • Not covering the registration number on the existing plates

And for motorcycles, the plates are displayed on the back. In this case, they can cover the existing plate. 

Am I insured to drive a car with trade plates? 

Cars with a set of trade plates still need to have valid insurance — after all, you can’t tax a car without insurance in the UK. This means if you work in the motor industry, or if you’re a customer and you want to take a test drive, you should be insured to drive. 

Car dealers will usually have a motor trade insurance policy or trade plate insurance that covers their vehicles while they’re being tested or transported. As well as this, your car insurance cover might include driving other cars (called DOC cover). You can also take out temporary car insurance to cover you while you do the test drive. The most important thing is to make sure you have a minimum of third-party cover before you set off, even if the vehicle has trade plates. 

Motor trade plates: A quick summary

Trade plates are a handy solution that makes sure vehicles are taxed even when they’re up for sale, being modified or valeted, or when they’re being transported over long distances. Without them, people who work in motor trading would spend a lot more of their time calculating the road tax for all the cars and motorbikes temporarily in their possession, or applying for refunds once the vehicles sold. 

Unless you work in the industry, you won’t have to apply for trade plates, pay for them, or fit them to your car. The main issues to check before you drive on public roads are whether the plates are displayed correctly, and whether you have the right kind of car insurance to cover you during a test drive. 

For temporary car insurance, or to insure your new car, get a quote from the experts at Howden today

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