What Kind of Insurance Do I Need for a Used Car Dealership?
- Nate Jones, CPCU, ARM, CLCS, AU
- 33 minutes ago
- 2 min read
Running a used car dealership involves risks that can impact your business finances if left unprotected. From accidents on your lot to inventory damage, insurance is essential for both compliance and safeguarding your investment. But what kind of insurance do you actually need?
This guide explains the key insurance policies every used car dealership owner should consider, along with tips for getting the best coverage through Wexford Insurance.
Essential Insurance Coverages for Used Car Dealership
Garage liability insurance is one of the most important coverages for dealerships. It protects your business from:
Bodily injury to customers or visitors on your lot
Property damage caused by your operations
Accidents during test drives
DOL coverage protects your inventory — the cars you have on your lot — from:
Theft and vandalism
Fire or natural disasters
Hail, storms, and other accidental damage
Since inventory is often the most valuable asset of a dealership, DOL coverage is essential for financial protection.
Garage keepers coverage provides protection for customer vehicles while they are in your care, such as during:
Test drives
Valet or temporary storage
Servicing and inspections
This coverage complements garage liability insurance, ensuring both your customers and your dealership are protected.
Property insurance covers physical assets like:
Office furniture and computers
Signage and displays
Security systems and equipment
If your property is damaged by fire, theft, or another covered event, this insurance helps you repair or replace your assets quickly.
Most states require workers’ compensation if you have employees. It covers:
Medical expenses for work-related injuries
Lost wages due to temporary disability
Legal costs if an employee sues
Even small dealerships benefit from workers’ compensation to protect both employees and the business.
6. Optional Coverages
Depending on your dealership size and operations, you may also consider:
Business interruption insurance – Protects income if your lot is temporarily unusable
Cyber liability insurance – Protects against data breaches or online threats
Commercial auto insurance – Covers company-owned or dealer vehicles
For detailed coverage options, you can explore resources from the National Independent Automobile Dealers Association (NIADA).
How Wexford Insurance Can Help
Selecting the right insurance coverage can be complicated, but Wexford Insurance specializes in helping used car dealerships find policies tailored to your business. With access to multiple carriers nationwide, we make it easier to:
Compare coverage options
Secure competitive rates
Protect your dealership, inventory, and employees
Final Thoughts
Operating a used car dealership comes with risks, but the right insurance coverage helps protect your business from financial loss. Garage liability, dealers open lot coverage, garage keepers coverage, business property, and workers’ compensation are core policies that safeguard your investment. Optional coverages can further enhance protection based on your unique needs.
With Wexford Insurance, you can find the coverage your dealership needs to operate confidently and focus on growing sales without worrying about unexpected setbacks.
Contact us today.
FAQs
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