IGA News

MOT test extension: The impact on garages and insurance

MOT test extension: The impact on garages and insurance

31 March 2021

The exceptional circumstances during the coronavirus pandemic last year have created a headache for service and repair garages this year.

The automatic six-month extension to MOTs, running from 30th March – 1st August 2020, generated a backlog of tests. With fewer cars on the road during the first lockdown period, and parts shortages, garage owners could only sit and wait for the return of more business when MOT testing resumed in August.

Of course, demand for work surged, particularly as the first extensions expired in October. Not only were garages seeing vehicles for MOT you would normally have seen earlier in the year, you also had to deal with cars that were due for MOT during autumn and winter.

Fast forward 12 months from the government’s announcement of the first lockdown and the start of MOT extensions, and there is a problem for garages. Just as the latest (and hopefully last) lockdown eases and many more vehicles hit the road again, there are far fewer MOTs due – which means less (legal) need for customers to visit garages.

How can a gap in trade – which is set to recur annually, if not addressed – be filled with business? And how does this impact on insurance for you and your customers?

Here are five things you can do to keep business coming in:

1. Remind customers of their legal obligation to have an MOT – and how it affects their insurance.

In addition to the automatic extension to MOTs last year, many people have been isolating or shielding. A combination of people unable to leave their homes and potential confusion around the rules means some motorists will have seen their MOTs expire. This includes vehicles that were declared SORN during lockdown.

As these vehicles hit the road again, their first port of call should be your garage. Without an up-to-date MOT, insurance is invalid – and while insurers have been pragmatic in applying the rules over the last 12 months, they are less likely to be forgiving as ‘normal life’ resumes. This could even lead to problems obtaining motor insurance in the future.

Make sure any customers with an overdue MOT are contacted and visit your garage now – not only to avoid a hefty fine if they return to the roads, but also to avoid invalidating their insurance.

2. Getting scheduled services booked during Spring and Summer.

Many cars will not have been out on the road for months. This could lead motorists to believe that maintenance is less of a priority. They haven’t been out on the road, so what could go wrong?

The answer to the question, of course, is plenty! Oil changes, filter changes, fluid levels, unlubricated joints, worn tyres, drained batteries, seized components… none of these things can be ignored.

And, if a breakdown occurs due to lack of maintenance or servicing (which is the vehicle owner’s responsibility), then a motor insurance policy can be rendered invalid. There is more likelihood of this happening if a vehicle has not received its scheduled service.

Remind vehicle owners that service intervals are set not just on mileage covered, but also on a time basis – usually every year or every two years, depending on the vehicle.

Encouraging people to service their cars right now serves a dual purpose: maintaining them means they are less likely to suffer issues, which means they are also more likely to pass their MOT when it is due. That should make the process of MOT testing easier for you later in the year, with less potential issues at the time of testing.

3. Broaden the types of vehicle you service.

Your bread and butter may be maintaining personal cars, but commercial vehicles have been out on the roads all year round. Couriers have never been busier, for example, with online shopping picking up pace as people have been largely confined to their homes.

You can take advantage of this by servicing more commercial vehicles. These vehicles will have seen the most use over the last year, so are more likely to need service or repair.

Make sure your motor trade road risks policy covers you to drive different types of vehicles. And if you’re thinking of servicing and driving larger vehicles, make sure your driving licence permits it, too.

4. Selling vehicles.

Motor trade insurers sometimes allow for an element of sales in a service and repair business. With used car values holding up well and demand still high, this is worth considering. It may not be the main focus of your business, but it could prove useful to keep things ticking over in quieter times.

With coronavirus social distancing restrictions still in place, ensuring vehicles are fully sanitised before anybody carries out a test drive is vital. Test drives need to be conducted on an unaccompanied basis for safety reasons. Check with your insurance broker that your motor trade road risks policy allows this, and the conditions needed for this extension to your cover. Make sure that unaccompanied demonstration cover is in place before handing over the keys to a vehicle, and that you have performed the relevant security checks and procedures to ensure the vehicle is returned safely.

5. Get MOT tests done early.

Encouraging customers to get their MOT done up to a month before it is due can help you to spread your workload more evenly, bringing forward test schedules.

As we all know, an MOT only says that a vehicle is road legal when it passes its test. Between MOT test dates, any number of things can go wrong that could severely impact the safety or operation of vehicles. An early MOT can offer motorists time to sort out anything that might be wrong.

Remind vehicle owners their MOT’s expiry anniversary remains the same, so they will still be able to book in for renewal at the same time next year.

Flexibility is the key to keeping business coming in. You might offer customers promotional deals on their servicing, promote your garage on social media, or offer ‘recommend a friend’ discounts to existing customers. However, doing the basics above will ensure your calendar remains busy. And making sure both your business and your customers maintain valid insurance benefits everybody, helping to keep our roads safe in the months and years ahead.

Gallagher are pleased to advise that they have arranged inclusion of MOT Loss of Licence cover as standard for any RMI member with an authorised MOT test centre taking out an Allianz insurance package. This is available to RMI/IGA members when you purchase an Allianz Motor Trade Policy from Gallagher via the RMI. The Loss of MOT Licence cover is included in addition to the enhanced Gallagher/RMI Allianz policy wording already offered to members.

Certain Allianz T&C’s apply, please contact the RMI or Gallagher for full details.