Trade Plates: A UK Guide for Car Dealers and Motor Traders

Last updated 29 September 2026.

A car in your stock is usually untaxed. Once a car goes into the trade the previous keeper’s tax is cancelled, so before you or a customer can drive it on a public road you either tax it or put trade plates on it. This guide explains what trade plates are, who can get them, how to apply to DVLA on form VTL301, what they cost, and the rules that catch dealers out: passengers, loads, parked cars and insurance.

This is general guidance based on DVLA’s published rules on GOV.UK and the legislation behind them as of September 2026, not legal advice. Check the linked pages before you rely on a detail, as fees and forms change.

What are trade plates?

Trade plates are number plates DVLA issues under a trade licence, and they let your business drive vehicles it holds without registering and taxing each one. GOV.UK describes them as plates you can use on vehicles your business has “for things like selling, repairing or testing” (GOV.UK: trade licence plates).

The plates carry a registration mark assigned to you, not to a car. You move them from vehicle to vehicle as you need them. The plates themselves stay the property of DVLA, and you must send them back if you stop holding the licence or stop being a motor trader or vehicle tester (Road Vehicles (Registration and Licensing) Regulations 2002, regulation 40).

The legal basis is sections 11 and 12 of the Vehicle Excise and Registration Act 1994. For a dealer, a trade licence covers “all vehicles which are from time to time temporarily in his possession in the course of his business as a motor trader” (VERA 1994, section 11). That wording matters, and we come back to it below.

Who can get trade plates?

You can apply if you are a motor dealer, motor trader or vehicle tester, which DVLA defines as a business that does one or more of these (GOV.UK: trade licence plates):

• sells vehicles
• manufactures or repairs vehicles
• tests other people’s vehicles on public roads

A business that collects or delivers vehicles is also eligible, as long as that is the only thing it does or it also manufactures or repairs vehicles.

You do not have to be trading already. The Act lets DVLA issue a licence to someone who satisfies it that they intend to start business as a motor trader or vehicle tester (VERA 1994, section 11). If you are still setting up, our guide to starting a car sales business puts trade plates alongside the other things you need in place, and the startup cost calculator helps you budget for them.

How to get trade plates from DVLA

You apply by post on form VTL301, “Application for a first trade licence”, with a copy of your motor trade insurance certificate (GOV.UK: apply for a trade licence). There is no online application.

1. Download form VTL301 and its guidance notes, VTL301G, from GOV.UK (GOV.UK: form VTL301).
2. Write down every purpose you will use the plates for. You can only use them for the purposes on the form, so if you only put customer test drives, you cannot use them for deliveries later.
3. Choose the set you need: plates for vehicles plus a set for motorcycles, bicycles or tricycles, plates just for vehicles, or plates just for motorcycles, bicycles or tricycles.
4. Attach a copy of your motor trade insurance certificate. The name on it must match the name on the form. DVLA will not approve the application with any other type of insurance, and it cannot return documents, so never send the original.
5. Pay the licence fee for the number of months you are applying for (see the next section).

If you do not have a motor trade insurance certificate, you have to explain why and give your Companies House registration number.

If the application is approved, DVLA says you should get a confirmation letter and your plates within 4 weeks. For security, they are sent separately. If nothing has arrived after 4 weeks, contact DVLA; the guidance notes give the number as 0300 300 1495, Monday to Friday, 8.30am to 4.30pm (GOV.UK: VTL301G guidance notes).

Need more than one car on the road at once? Each trade licence covers one vehicle at a time (VERA 1994, section 12). Ask DVLA for an additional licence to get another set. It will need a copy of your insurance certificate too.

How much do trade plates cost and how long do they last?

A full 12-month trade licence for vehicles costs £177, and every licence ends on either 30 June or 31 December (GOV.UK: apply for a trade licence). You cannot get a licence for less than 6 months or more than 12, so your first licence runs from the month you apply to the next June or December that gives you at least 6 months.

Month you apply	Licence expires	Months	Vehicles	Bicycles and tricycles
January (6 month)	June	6	£97.35	£68.75
January (12 month)	December	12	£177	£125
February	December	11	£177	£125
March	December	10	£162.25	£114.60
April	December	9	£146	£103.10
May	December	8	£129.80	£91.65
June	December	7	£113.55	£80.20
July	December	6	£97.35	£68.75
August	June	11	£177	£125
September	June	10	£162.25	£114.60
October	June	9	£146	£103.10
November	June	8	£129.80	£91.65
December	June	7	£113.55	£80.20

Rates from GOV.UK as of September 2026. DVLA notes that a different rate may apply if duty rates change in the Budget.

Note that an 11-month licence costs the same as a 12-month one. If you are applying in February or August, there is no saving in waiting.

What you can use trade plates for

You can only use trade plates for the business purposes the law allows, and only for the ones you wrote on your application (GOV.UK: rules for using your trade plates). For a motor trader, the permitted purposes are set out in Schedule 6 to the 2002 Regulations (Road Vehicles (Registration and Licensing) Regulations 2002, Schedule 6). In dealer terms, they include:

• a test drive for a likely buyer, including going to any place for the test drive and coming back
• a test or trial of the vehicle, or its accessories or equipment, during or after construction, modification or repair
• a test drive for someone promoting publicity for the vehicle, such as a journalist
• delivering it to the place where the buyer intends to keep it
• demonstrating how it or its equipment works when you hand it over to the buyer
• moving it between parts of your premises, or to and from the premises of another manufacturer, repairer or dealer
• going to or from a workshop where it is being fitted with a body or equipment, painted, valeted or repaired (DVLA says this does not cover a drive-through or hand car wash open to the public)
• going to or from an auction, garage or other place where vehicles are stored or sold
• going to or from a place where it is to be inspected or tested, or to a public weighbridge
• going to or from a place where it is transported by train, ship or aircraft
• going to a place where it is to be broken up or dismantled

DVLA’s guidance notes also list collecting vehicles under repossession (GOV.UK: VTL301G guidance notes). Vehicle testers can only use the plates for testing vehicles submitted to them, and a manufacturer can also use them on its own vehicles kept solely for research and development.

Whatever the purpose, the vehicle must be roadworthy, insured, and have a valid MOT or be exempt from needing one.

Test drives with customers

A customer test drive is one of the permitted purposes, so trade plates let buyers drive untaxed stock. Put “test drives for prospective purchasers” on your VTL301, check your motor trade policy covers the customer as a driver (and whether they can go unaccompanied), and check their licence before they set off. If the car needs an MOT and does not have one, it cannot go out on trade plates for a test drive.

Delivering cars to customers

Delivering a car to where the buyer will keep it is permitted. So is the handover demonstration. Once the car is registered to its new keeper, they need to tax it before they drive it themselves, as tax does not transfer with a sale (GOV.UK: tax your vehicle). Our guide to putting a car into the trade covers the DVLA side of buying and selling stock.

What you cannot use trade plates for

You cannot use trade plates for anything outside the permitted purposes, and a few everyday habits are offences. DVLA’s guidance notes list these among the things it is an offence to do (GOV.UK: VTL301G guidance notes):

• display trade plates after your licence has expired
• display them on a vehicle registered to you, unless you are a manufacturer using it for development
• display them on a parked vehicle
• display plates that are altered, defaced or damaged, or plates that were not issued by DVLA
• display anything that could be mistaken for a trade plate
• split a set of plates across more than one vehicle
• let another person use your plates
• use them on vehicles carrying passengers for hire, reward, or commercial or personal reasons
• use them for the general carrying of goods

The parked car rule catches people out. The Act says a trade licence does not entitle you to keep a vehicle on a road when it is not being used there (VERA 1994, section 12). Leaving a car on trade plates parked on the street outside your unit overnight is not allowed.

Passengers

You can only carry people who are in the car in connection with the permitted purpose (2002 Regulations, Schedule 6, paragraph 9). A salesperson riding along on a customer’s test drive is fine. Giving a colleague a lift home, or taking the family out at the weekend, is not.

Carrying loads

A car on trade plates cannot carry goods, except for a short list of “specified loads” (VERA 1994, section 12(3)). For a dealer, the useful ones are:

• a load carried only to test or demonstrate the vehicle, which comes back to where it was loaded
• when delivering or collecting, another vehicle used to travel to or from the delivery point, such as a folding scooter for the driver to get back
• parts, accessories or equipment to be fitted to the vehicle, and the tools to fit them, when going to a workshop, auction or transport point
• anything built in or permanently attached

Stock for a customer, tyres for another car or anything for your own use does not count.

Displaying trade plates correctly

Trade plates go on the outside of the vehicle, front and back, readable from 20 metres, and must not cover the car’s existing number plates (GOV.UK: rules for using your trade plates). Motorcycles only need a plate on the back, and that plate can cover the existing one.

Whatever you use to fix them, make sure the plate cannot slip, twist or fold out of sight at speed. A plate propped inside the windscreen does not meet the rule, because it has to be on the outside.

Motor trade insurance for trade plates

You need motor trade insurance to get trade plates, and the car you drive on them has to be insured as well. DVLA will not approve a VTL301 with any other type of insurance (GOV.UK: apply for a trade licence), and it is an offence to use a vehicle on a road without insurance (Road Traffic Act 1988, section 143).

The plates do not insure anything themselves. Before a car goes out, check your policy covers the driver (you, staff or a customer), the use (test drive, delivery or collection) and the car’s value. Our guide to motor trade insurance explains road risks cover, what policies usually exclude and what to ask a broker.

Penalties for misusing trade plates

The maximum fine is £5,000 for a false or misleading application, fraudulently altering or using trade plates, or allowing someone else to use them (GOV.UK: VTL301G guidance notes).

Using trade plates for a purpose that is not permitted carries a maximum fine of £1,000 or five times the vehicle excise duty on the vehicle, whichever is greater. The same penalty applies to using more vehicles at once than you have licences for, or keeping a car on the road when it is not being used (VERA 1994, section 34). A misuse can also leave you uninsured if the journey falls outside your policy.

Renewing, changing and cancelling your trade licence

You renew for 6 months if your licence runs out in June, or 6 or 12 months if it runs out in December (GOV.UK: renew your trade licence). DVLA sends you a letter with instructions before your licence expires. If it does not arrive, or you want to renew early, use form VTL318. You need to send a copy of your current motor trade insurance certificate again.

If you only change your business address, tell DVLA on form VTL310 and keep using your plates. If you change your business name, you need a new licence on form VTL301 and you return your plates with it. You can claim a refund for the months left on the old licence on form VTL308 (GOV.UK: change your business name or address).

To stop, send the plates back to DVLA with form VTL308 if you are cancelling early, or with a letter if the licence has already expired. You get a refund for each full calendar month left once DVLA receives the form, and it cannot be backdated (GOV.UK: end your trade licence).

Lost, stolen or damaged trade plates

Report lost or stolen plates to the police, then apply for a replacement set on form VTL310 (GOV.UK: replace lost, stolen or damaged trade plates). If they were stolen, you need the crime reference number for the form.

You always get a full set. You cannot replace just one plate from a vehicle set, and for damaged or faded plates you have to send the whole set back first.

Replacement set	Fee
Vehicle set and motorcycle, bicycle or tricycle set	£18.00
Vehicle set (excluding motorcycles)	£13.50
Motorcycle, bicycle and tricycle set	£7.00

If plates have become unreadable through no fault of yours, for example they have faded over time, the replacement may be free. If you find an original plate after it has been replaced, you must return it to DVLA (2002 Regulations, regulation 41).

Trade plates or tax each car?

Trade plates suit dealers who regularly need untaxed stock on the road for test drives, deliveries and trips to auctions, prep and MOT centres. The alternative is to register and tax each car before it goes out, which means a separate tax payment for every car you want on the road.

Trade plates make sense when you move several cars a week, customers test drive most of what you sell, or you buy at auction and drive cars back. Taxing an individual car can make more sense for a car you keep and use for a long period, or for driving that is not a permitted trade purpose. One licence also only covers one car at a time, so if two customers want to test drive on a Saturday, you need two licences, or one of the cars has to be taxed.

Common trade plate mistakes

Mistake	What to do instead
Leaving purposes off the VTL301	List every use you need, including test drives and deliveries. You can only use the plates for the purposes on the form.
Sending a non-trade insurance certificate	Send a copy of your motor trade insurance certificate, in the same name as the application.
Test driving a car without an MOT	The car must have a valid MOT or be exempt, as well as being roadworthy and insured.
Parking a car on the street with trade plates on it	Move the car off the road, or tax it if it has to stay there. Keeping a vehicle on a road on trade plates when it is not being used is an offence, and an untaxed car left on the road can be clamped or removed.
Using trade plates on your own car	Plates are for vehicles temporarily in your possession as a trader, not vehicles registered to you.
Splitting a set across two cars	Each set goes on one vehicle. Apply for another licence if you need two cars out at once.
Lending plates to a friend in the trade	Only people using the vehicle for your business under your licence can display them. Lending them carries a fine of up to £5,000.
Missing the renewal letter	Put the June and December expiry dates in your diary and renew on form VTL318 if the letter does not come.

How Haswent helps

Haswent’s DMS helps you keep test drives organised. You can book test drives, viewings and handovers in the diary, in private or shared calendars, and set up resource calendars for things your team shares. You could set up each set of trade plates as a resource, so two people cannot book the same plates for the same time.

Stock management keeps each car's MOT history, costs and paperwork in one place, so you can check a car has a valid MOT before it goes out. For the wider picture of what a dealer needs to be legal, see our guide to the legal requirements for running a used car dealership, or look at the dealer management system. Contact us for a demo.

Sources

• GOV.UK: trade licence plates (overview, apply, rules, renew, replace, change of name or address, and ending your licence)
• GOV.UK: form VTL301, application for a first trade licence
• GOV.UK: VTL301G guidance notes (permitted uses, offences and penalties)
• Vehicle Excise and Registration Act 1994, sections 11, 12 and 34
• Road Vehicles (Registration and Licensing) Regulations 2002, regulations 40 and 41 and Schedule 6
• Road Traffic Act 1988, section 143
• GOV.UK: tax your vehicle

Frequently asked questions