Many businesses, such as car dealerships, buy and sell cars at a rapid rate, and it is simply not practical for them to go through the plate registration process at the DVLA for every car they own. This is an expensive administrative burden and the vehicles are rarely used on public roads, staying on the forecourt for the majority of the time.

The two main categories of businesses that are eligible for trade license plates are motor traders and vehicle testers. Motor traders are businesses that specialise in selling, manufacturing or repairing vehicles or those who have cars in their possession solely for collection or delivery. Vehicle testers are defined as businesses that use public roads to carry out short term tests, on vehicles that belong to others.

Trade plates can only be used on vehicles, if the vehicle is temporarily in the possession of a business that has the right to use trade plates. As soon as the vehicle is transferred or sold to another party, the trade plates can no longer be used on the vehicle, unless the new owner has a similar license. Vehicles which are part of a trader’s stock are considered under temporary possession, regardless of the period of time that the vehicle spends on the forecourt.

Applying for a trade license is relatively simple and requires form VTL301 to be completed and sent to the DVLA. Licenses are however time-limited, usually lasting only six months before the application needs to be renewed.