Trade plates

If you have somewhere off-road to keep your cars, you might want to consider investing in a set of trade plates, as it’s cheaper than continually taxing cars that you have in stock.

The current price for a set of plates is £165 a year for cars and light commercials, and to apply for them you need to provide evidence to the DVLA that you trade cars regularly. The process used to be quite arduous and involve submitting receipts and invoices to prove you worked in the motor trade, but the rules have been relaxed somewhat in recent years as too many part-time traders were taking risks.

To apply, you can now download a form from www.dvla.gov.uk and fill it out, but you need to send it in with a hard copy of your motor trade insurance certificate. If you’re a first-time applicant, the DVLA may then contact you to make some enquiries as to the nature of your business, but unless you’re acting under false pretences, this won’t be a problem.

When it’s time to renew your trade plates, you will need to resend your insurance certificate or ‘other evidence of trading’. Also, unlike road tax, trade plates renew annually on January 31, so if you apply mid-year you’ll be charged an amount pro-rata for your first year.

Also, be aware of the trade plate rules. While they mean you can use a car on the road without road tax, there are some strict laws around their use. First, they must be displayed on the exterior of the car (not on the dashboard) and the original plates must also be visible. You can also only use them for ‘trade’ purposes – ie, when taking the car for repairs, moving it from one location to another, delivering it to a customer or using it for a demonstration test-drive. The car must not be parked on a public road with them on display, either.

Finally, while trade plates can be used as a substitute for road tax, it’s a common misconception that you can drive a car on them without an MOT. You can’t, unless it’s to a pre-booked test, a retest or a place of repair.