They might be cheap, but Chinese cars may carry an expensive catch for UK buyers

Chinese cars already account for 10 per cent of all new cars sold in the UK but new research from evo’s parent company Carwow indicates that buyers are facing major hurdles when it comes to getting car insurance for these new vehicles. 

Many of the UK’s top 10 insurance companies proved unwilling to offer quotes for a sample of top-selling Chinese cars, including models from BYD, Jaecoo, Xpeng and Skywell. Where quotes were offered, they proved significantly more expensive than for similar models from established UK market brands.

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Customers attracted by competitive pricing on the flood of new market entrants from China are having the savings they’ve made on list price eaten into by these higher insurance costs, not to mention the difficulty in finding a willing insurer in the first place. 

The details of the research are stark. Carwow researchers attempted to get quotes from Admiral, Aviva, Direct Line, Hastings, LV, AXA. Ageas, AA, esure and Allianz for eight different cars. The four Chinese cars were the Jaecoo 7, Xpeng G6, Skywell BE11 and BYD Seal U, then there was a control group of four well established alternatives - VW’s Tiguan, Kia’s EV3, Peugeot’s E-3008 and Toyota’s RAV4. 

In the case of the Skywell BE11, only one of the 10 insurance companies could provide a quote despite the car having been on sale in the UK for just short of two years. The quote provided by esure was for £2203 while the same company offered equivalent insurance for the Peugeot 3008 at £655. Only one of the 10 insurance companies would not provide a quote on the 3008 and the average price was £838. The results were similar across the board, painting a clear picture that Chinese cars are significantly more difficult to insure than models from more established brands, and more expensive. 

The problem results from uncertainty within the insurance companies around new brands and models arriving from China. Questions around parts availability, reparability and long-term reliability have understandably made insurers more cautious about covering these less familiar cars. LV Insurance, owned by Allianz, said that it does not yet provide insurance for the Xpeng G6, BYD Seal U, and Skywell BE11 as it’s still evaluating the risks associated with these models.

Things are likely to improve as Chinese brands become more established in the UK and build up their aftersales support networks but buyers considering Chinese cars today should go into their purchases with their eyes open. The Chinese brands themselves are aware of the issue and many offer manufacturer-backed insurance schemes to help keep costs down for customers. 

Carwow’s director of editorial, Iain Reid, said:  ‘It’s a problem with the UK insurance industry struggling to keep pace with a rapidly changing market. Every wave of new manufacturers, from Japanese brands in the past to today’s Chinese entrants, has faced the same challenge.

‘More new brands have entered the market in the past 18 months than in the previous 20 years combined, most of them from China. Unfamiliar specifications, higher repair costs and limited data may challenge insurers, but those pressures are being passed directly to drivers through higher prices – and that needs to change.’