UK insurers are more hesitant to cover some hybrid and electric vehicles (EVs) from China than cars from other countries, research suggests.
While some drivers can save money by buying cars made in China, they may have more limited options to get insurance than those buying electric, hybrid and petrol cars from Europe, the US and South Korea.
And when policies are available, they can sometimes cost almost twice as much as those for similar petrol vehicles from outside China.
Chinese brands such as BYD, XPeng and Jaecoo have become increasingly common on UK roads. In March this year, the Jaecoo 7 was the UK’s bestselling new car. Nicknamed the “Temu Range Rover”, it comes as a hybrid and a petrol vehicle.
However, figures from sales site Carwow show that sourcing insurance may take some of the sheen off buying a Chinese car. In its survey, half of the requests for quotes were declined.
It took four models – the hybrid Jaecoo 7, the XPeng G6, the BYD Seal U and the Skywell BE11 – and asked five insurers for quotes for a 27-year-old man living in Hampshire.
Axa declined to give quotes on any of the vehicles, while Hastings Direct only offered coverage on the BYD. Direct Line declined two vehicles and Admiral one, while only Aviva offered cover for all, according to Carwow.
Iain Reid of Carwow says that more limited options for cover mean that drivers of Chinese cars have less ability to shop around and get more competitive quotes.
“For some motorists, this could make some models impossible to insure at all,” he says.
“Insurers are still building up repair data, parts supply chains and long-term claims histories for many of these newer models, which is making some providers cautious,” he adds.
The research suggests insuring some EV or hybrid cars will cost a lot more than a similar non-Chinese vehicle with a petrol engine.
The average cost of covering the Jaecoo 7 was £1,103 a year – almost twice what it would cost to cover a Skoda Karoq (£577), an SUV picked by Carwow as a petrol equivalent.
Only Admiral and Aviva would cover the XPeng, at an average cost of £936 a year – well above the figure for the petrol equivalent Hyundai Kona (£639).
Aviva was the only company to offer cover for the Skywell (£685) in the study, but that was more than the premium for a petrol Ford Kuga at £638. Insurance for the BYD vehicle cost an average of £876 compared with £730 for a petrol Kia Sportage.
Stephen Kennedy of the financial information service Defaqto says EVs tend to be more expensive to repair after crashes, and that insurers may not have enough data on the new vehicles to price policies yet.
“It’s a bit of a chicken and egg situation. If they haven’t sold policies for these types of vehicles, they don’t have the data to be able to work out how much they should be charging,” he says.
Reid says that while costs may fall in the future, this is little comfort for the many drivers who are trying to insure their new vehicles now.
“It’s still harder to get insurance quotes for newer Chinese models than for more established European and Japanese alternatives,” he says. “On paper, Chinese cars come in at an average of £901 a year to insure – about £255 more than equivalent petrol models at £646. But the bigger issue isn’t just price; it’s availability.”
Car sales rose in April, with nearly a quarter more sold compared with a year ago. There were large rises in the number of registrations of Chinese brands such as BYD and Jaecoo, according to data from the Society of Motor Manufacturers and Traders (SMMT).
A spokesperson for Hastings Direct says it looks at how straightforward it is to repair a car, how safe it is and what the demand for it is when assessing a quote. It covers some Chinese brands, but “some newer brands are still relatively low‑volume in the UK, and their parts supply chains are still developing”.
Axa, which did not provide any quotes in the Carwow study, says some Chinese brands are new to the market and it does not have enough data to cover them.
According to Aviva, which acquired Direct Line last year, it reviews pricing as more data becomes available.
Admiral says insurance prices have risen over recent years but that it has not increased EV premiums more than those for petrol cars. “We continue to try to provide accurately and competitively priced cover for EV drivers.” It says it does cover Skywell vehicles.
The Association of British Insurers says that when there is little claims history, it is more difficult for companies to evaluate risk.
Oliver Lowe, the head of product at Omoda and Jaecoo UK, says the company is working closely with insurers. “Anything that’s risk-based is slow to change and adapt to new challenges very quickly. That’s completely understandable. It’s risk for them. We have an expert team that are working on all fronts to reduce those insurance costs.”
He adds: “Insurers are still building up repair data, parts supply chains and long-term claims histories for many of these newer models, which is making some providers cautious. We saw similar concerns when Japanese and [South] Korean brands first arrived in the UK market, and insurance availability and pricing should improve as Chinese manufacturers become more established on British roads.”
