# Motor trade insurance in Germany: trade plates, test drives and customer cars > If you run a car dealership or a garage in Germany, you drive vehicles every day that are not registered or do not belong to you. Ordinary business liability barely helps here, because it excludes damage to customer cars in your care and anything to do with driving. Motor trade insurance (Kfz-Handel- und Handwerksversicherung) fills that gap with motor liability and own damage cover for red plates, test drives and vehicles in your custody. Quelle/Source: https://www.nammert.com/en/insurance-broker-motor-trade-insurance.php Updated: 2026-11-06 ## Does a dealer or garage in Germany need its own motor insurance? For red trade plates, yes. The registration office will not issue a 06 plate without motor third party liability, and the application asks for an eVB number, the electronic insurance confirmation. Own damage cover (Kasko) for customer cars and your stock is optional, but almost every business needs it, because business liability usually does not pay for damage to vehicles you repair, move or test drive. Many policies are based on special conditions for the motor trade, with the standard motor terms (AKB) applying alongside. ## At a glance - **Compulsory?:** Motor liability yes, if you use red plates; own damage cover optional - **Red trade plate:** 06 number under § 41 FZV for inspection, test and transfer drives - **Legal minimum:** EUR 7.5 million for bodily injury in motor liability - **Who can get a 06 plate:** reliable manufacturers, parts makers, garages and dealers, not private individuals - **Policy wording:** motor trade special conditions, with the standard AKB applying where they are silent ## Red trade plates: what they allow and what they do not The red 06 plate lets you drive unregistered vehicles on public roads for three purposes set out in § 41 of the German Vehicle Registration Ordinance (FZV): inspection by an approved examiner, test drives and transfers. The registration office only issues it to reliable vehicle manufacturers, parts manufacturers, garages and dealers, and checks your trade registration and a certificate of good conduct among other documents. Each plate comes with a special logbook in which every vehicle driven on it gets its own page. The rules are tight. The plate is for your own business only, you must keep a record of the drives, and misuse is an administrative offence. Handing a car to a prospective buyer for several days is not allowed: the Administrative Court of Bayreuth ruled exactly that in 2021 (B 1 K 20.1441). Stretching the rules risks a fine and an argument with your insurer. ## Why business liability is not enough for customer cars Business liability (Betriebshaftpflicht) pays for injury and property damage to third parties. For a motor business it has two built in limits: damage caused by using a motor vehicle belongs to motor liability, and damage to vehicles you are working on or keeping is normally excluded. If a customer's car slides off the lift or is dented while being moved around the yard, a garage without extra cover often pays for it itself. Motor trade insurance is designed for exactly this. It combines motor liability for red plate drives and customer vehicles with own damage cover for cars left with you for repair, valeting or sale, and for your own stock. How far custody cover reaches, for example to cars that are merely parked overnight, differs from one policy to the next. ## Test drives with prospective buyers When a customer test drives a car from your stock, the motor liability of the red plate or of the registered demonstrator pays for damage to others. Damage to the car itself stays with you unless you have own damage cover or can recover it from the driver. A written test drive agreement, a copy of the ID, a licence check and a clear rule on the excess are essential. Then there is the buyer who never comes back. Whether the policy treats this as theft or as uninsured misappropriation depends on the wording, and insurers differ widely. It is worth reading that clause before you sign. ## Stock on the forecourt and short term plates A forecourt full of cars is exposed to hail, storm and vandalism hitting many vehicles at once. Own damage cover for stock usually has a limit per vehicle and per site, and the premium is often based on average stock value or the number of plates. For occasional drives without a red plate there is the short term plate under § 42 FZV, which also needs its own insurance confirmation. If you move cars regularly, a red plate on an annual policy is usually simpler, because liability and own damage cover then follow the same rules for every drive. ## What is covered - Motor liability for drives on red 06 plates - Liability on test and transfer drives with customer vehicles, depending on the policy - Own damage cover for customer cars in your custody for repair, valeting or sale - Own damage cover for your vehicle stock on site - Damage while moving vehicles around the yard - Hail, storm, fire and theft affecting parked stock, under partial cover - Accidents on test drives with prospective buyers, under comprehensive cover - Transfers to customers and to the roadworthiness test ## What is not covered - Faulty repairs and putting them right, which is warranty - Private use of the red plate or lending it to others - Wear and tear and pure operating damage to the vehicle, depending on the policy - Misappropriation by a prospective buyer, unless specifically included - Vehicles that are only parked and not being worked on, in basic policies - Deliberately caused damage ## Who needs it - New and used car dealers - Independent and franchised garages - Body shops, paint shops and tyre businesses with customer cars on site - Valeting and smart repair businesses - Manufacturers and converters moving vehicles before registration ## Who does not need it - Parts traders without red plates who never drive or keep other people's vehicles ## What it costs The premium follows the business, not a single car. A small used car dealer with one red plate and a dealership with a large stock and its own workshop are worlds apart. Meaningful figures need the number of plates, stock value and workshop turnover. **What drives the premium:** - Number of red plates and type of vehicles, for example cars, vans or motorcycles - Average value of your stock and the maximum value per vehicle - Scope of own damage cover for customer cars and stock - Workshop turnover or number of staff - Site security such as fencing, lighting and CCTV - Excess and claims history _We do not publish sample premiums, because the range between a small trader and a large dealership makes any single figure misleading. Your premium is fixed only in the quote we obtain for you._ ## The policy levels on the market - **Liability for red plates only:** Motor liability for red plate drives. Meets the condition for getting the plates, but leaves every bit of damage to the car being driven uncovered. - **Liability plus partial cover:** Adds fire, theft, hail, storm and glass for stock and customer cars in custody. Suits dealers whose biggest risk stands on the forecourt. - **Liability plus comprehensive cover:** Adds accident damage on test and transfer drives, while moving cars and in the workshop. The usual scope for dealerships and garages with customer traffic. ## How to recognise a good policy | Criterion | Minimum standard | Strong policy | Why it matters | | --- | --- | --- | --- | | Customer cars in custody | only while being repaired | also parked before and after the job, including open air sites | Many losses happen in the yard overnight, not on the lift. | | Misappropriation on test drives | excluded | included where ID and licence were checked | The buyer who does not return is the most expensive single loss in car trading. | | Maximum value per vehicle | fixed amount sized for average cars | matched to the most expensive vehicles in stock and in the workshop | A luxury car in your custody can otherwise exceed the limit. | | Liability limit | statutory minimum amounts | well above the minimums, with a high limit per injured person | A serious injury on a test drive can exceed the legal minimums. | | Gross negligence | insurer may reduce payment | waiver of the reduction in own damage cover | A key left in a car on the forecourt happens quickly. | | Operating damage | excluded | loading, unloading and manoeuvring damage included | Bumps while moving cars around the workshop are among the most common losses. | | Permitted drivers | staff only | staff and prospective buyers on test drives | Otherwise there is a gap on the test drive that only shows when something goes wrong. | ## Insurers on the German market Motor trade insurance in Germany is mainly written by motor insurers with a commercial book, often based on special conditions the German insurance association GDV publishes as a model. The list describes the German market; it says nothing about which insurers we work with. - **Allianz**: motor trade policy combining liability and own damage for several vehicles - **Württembergische**: part of the W&W group, dedicated offer for motor trade and garages - **Alte Leipziger**: publishes its own special conditions for the motor trade - **Dialog**: specialist insurer in the Generali group with a motor trade concept, broker distribution - **NÜRNBERGER**: motor insurer with commercial business, sold through agents and brokers 106 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Kraftfahrzeug-Haftpflicht, Kraftfahrzeug-Kasko). Source: BaFin company database, 2026-09-18; EU insurers without a German office excluded. ## Typical claims and who pays - **Customer car slides off the lift** (four to five figures, depending on the car): Damage to a car being worked on is custody damage. Business liability and liability only red plate cover do not pay; comprehensive cover for customer cars does. - **Test driver rear ends another car** (damage to the other car and to yours): The other driver is paid from the red plate's motor liability. Damage to your stock car is only paid by comprehensive cover. - **Hailstorm over the forecourt** (often five or six figures for the whole site): Hail falls under partial cover. Without own damage cover for stock, the dealer pays for every dent; with it, up to the agreed site limit. - **Test driver never comes back** (value of the car): Whether this counts as theft or misappropriation is down to the wording. Strong policies include it, often only if ID and licence were checked. - **Mechanic scrapes car on the door** (around EUR 1,000 to 5,000): Moving a car around your site is custody damage. Basic policies only cover time on the lift, strong ones the whole yard. - **Brakes fitted wrong, job redone** (labour and parts for the redo): Redoing your own work is warranty. No policy pays for it; at most, consequential damage to other property or people is covered. ## Myth or truth - „You cannot get a red plate without motor liability insurance." ✔ True, the application for a 06 plate requires an eVB number. Liability is a precondition; own damage cover stays optional. - „I can let a buyer keep the car over the weekend on my red plate." ✘ False, the Administrative Court of Bayreuth ruled that leaving a car with a buyer for several days is not allowed. The plate is only for business inspection, test and transfer drives. - „If a customer car falls off the lift, business liability pays." ✘ False, damage to vehicles being worked on or kept is normally excluded there. You need own damage cover under a motor trade policy. - „A private collector can get a red 06 plate." ✘ False, 06 plates are only issued to reliable manufacturers, parts makers, garages and dealers. - „No insurer pays to redo a faulty repair." ✔ True, putting the work right is warranty. At most, damage it causes to other property or people is covered. ## Common mistakes - Relying on business liability when a customer car falls off the lift - Buying liability for the red plate only and forgetting own damage cover - Letting buyers test drive without checking ID and licence - Using the red plate privately or lending it to friends - Not raising the per vehicle limit when more expensive cars join the stock - Not keeping a record of red plate drives ## FAQ ### Who can get a red 06 trade plate in Germany? Only reliable vehicle manufacturers, parts manufacturers, garages and dealers. The registration office typically asks for your trade registration, a certificate of good conduct, a commercial register extract for companies and the eVB number of your motor liability insurer. Private individuals cannot get a 06 plate. ### Can a customer test drive alone on a red plate? A test drive is a business drive and therefore allowed. Leaving the car with a buyer for several days is not, as the Administrative Court of Bayreuth decided in 2021. For cover, it also matters whether the customer counts as a permitted driver under the policy. ### Does business liability pay for damage to a customer car? Usually not. Damage to vehicles you are working on or keeping, and damage caused by driving, is excluded there. Motor trade insurance with own damage cover for vehicles in custody is designed for this. ### Is a faulty repair covered? No. Putting your own work right is warranty and a business risk. Consequential damage, for example to the car after the repair while it is still in your workshop, may be covered depending on the policy. ### What is the difference between a red plate and a short term plate? The red 06 plate is for motor businesses and is reused for many vehicles (§ 41 FZV). The short term plate under § 42 FZV covers one vehicle for a few days. Both need motor liability insurance. ### What liability limit makes sense? German law requires at least EUR 7.5 million for bodily injury in motor liability. A limit well above that, with a high amount per injured person, is sensible, because on test drives people drive cars they do not know. ### Are cars on the forecourt covered overnight? Under partial cover against hail, storm, fire and theft, if they belong to the insured stock or are customer cars in your custody. Some policies require site security or set a limit for the whole site. ### Why use a broker in Germany? Because policies differ on custody, misappropriation, permitted drivers and limits, and these points only show when there is a loss. The wording is in German; we compare it, check it against your business and support you when something happens. ## Legal basis and sources - [Insurance Contract Act (VVG, German)](https://www.gesetze-im-internet.de/vvg_2008/) - [BaFin company database (licensed insurers)](https://portal.mvp.bafin.de/database/InstInfo/) ## Request quotes We obtain quotes and come back with a comparison, free of charge. You can write in English. https://www.nammert.com/en/insurance-broker-motor-trade-insurance.php#anfrage --- Your broker: Norman Nammert, trading as NAMMERT. Insurance broker licensed under section 34d(1) of the German Trade Regulation Act. Broker register no. D-C08Q-TOSD4-37. NAMMERT Assekuradeur GmbH is a separate company. It does not arrange your contract. NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.