Drivers making deliveries for items sold on Facebook Marketplace, Vinted and similar platforms could be invalidating their car insurance, experts have warned.
Concerns have been raised that motorists using personal vehicles for regular deliveries of items from buying and selling sites may be unknowingly breaching their insurance terms.
Recent industry estimates suggest that over a quarter of shoppers are using Facebook Marketplace to buy second-hand goods.
However, those making regular sales on these platforms could find themselves driving uninsured if their activities qualify as “trading” under HMRC definitions.
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Drivers are being warned of a car insurance issue stemming from their use of Vinted or Facebook Marketplace
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Standard car insurance policies typically don’t cover journeys made for commercial purposes.
Any delivery driving falls into HMRC’s definition of “trading” means that any accidents or damage occurring during these journeys won’t be covered.
This means many drivers making what they consider innocent side hustle deliveries could actually be on the road without valid insurance.
The issue affects those regularly selling and delivering items through platforms like eBay, Gumtree and Facebook Marketplace.
Without the proper policy in place, drivers could face significant financial consequences if involved in an accident while making deliveries.
Alicia Hempsted, car insurance expert at MoneySuperMarket, explains: “Hobbyist delivery driving falls into a grey area; many drivers may not realise that using their cars for regular deliveries could impact their insurance.
“Because the rules aren’t outlined explicitly in insurance documents, there may be some room for interpretation between insurers and policyholders.”
Hempsted warns that drivers selling and delivering items in a way that could be defined as “trading” may not be covered on journeys to customers or storage facilities.
“If you use your vehicle for delivery driving in a way that qualifies as ‘trading,’ you must update your car insurance policy to ‘business use’ to make sure you are properly covered,” she added.
While HMRC’s definition of “trading” can provide guidance, insurers may have varying criteria for determining when business insurance is required.
HMRC defines “trading” activity as seeking profit by actively buying items with the view to selling, having regular or frequent sales, or trading goods quickly after acquiring them.
Selling goods that have been purchased with the explicit intention to sell, rather than inherited or gifted items, also qualifies as trading.
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HMRC rules could see car insurance policies voided
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Many insurance policies include a key clause requiring disclosure of any significant changes in vehicle use.
If an insurer discovers a car has been used for commercial deliveries without notification, they may void the policy entirely, leaving drivers completely unprotected.
