UK drivers struggle to get insurance for Chinese EVs such as Jaecoo | Car insurance

Research shows UK insurers are more hesitant to cover some hybrid and electric vehicles (EVs) from China than cars from other countries.

While some drivers may save money by purchasing cars made in China, they may have more limited options for insurance than drivers purchasing electric, hybrid and gasoline cars from Europe, the United States and South Korea.

And when policies are available, they can sometimes cost nearly twice as much as comparable gasoline-powered vehicles from outside China.

Chinese brands such as BYD, XPeng and Jaecoo are becoming increasingly common on UK roads. In March this year, the Jaecoo 7 became the UK’s best-selling new car. The vehicle, nicknamed “Temu Range Rover”, comes as a hybrid and gasoline vehicle.

But figures from sales site Carwow show that having insurance could take a fraction of the money of buying a Chinese car. In his survey, half of the quote requests were rejected.

It bought four models – the hybrid Jaecoo 7, XPeng G6, BYD Seal U and Skywell BE11 – and solicited quotes from five insurance companies for a 27-year-old man living in Hampshire.

Axa refused to quote any vehicles, while Hastings Direct only offered BYD coverage. According to Carwow, Direct Line rejected the offer to protect two vehicles and only Aviva to protect the Admiral.

More limited cover options mean Chinese car drivers have the ability to shop around less and get more competitive quotes, says Carwow’s Iain Reid.

“For some drivers, this can make some models completely impossible to insure,” he says.

“Insurers are still creating repair data, parts supply chains and long-term damage histories for many of these new models, making some providers cautious,” he adds.

The research suggests that some EV or hybrid cars will cost much more to insure than a similar non-Chinese-made, gasoline-engined vehicle.

The average coating cost for Jaecoo 7 was £1,103 per year; this was almost twice the cost of the Skoda Karoq (£577), an SUV chosen by Carwow as its petrol equivalent.

Only Admiral and Aviva could afford XPeng at an average cost of £936 per year; this was well above the petrol equivalent Hyundai Kona figure (£639).

Aviva was the only company in the study to offer cover for the Skywell (£685), but this was more than the £638 premium for the petrol Ford Kuga. The average cost of insuring a BYD vehicle was £876, while the petrol Kia Sportage was £730.

Stephen Kennedy, of financial information service Defaqto, says electric vehicles are more expensive to repair after accidents and insurers may not have enough data on pricing policies for new vehicles.

“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 calculate how much they should charge,” he says.

Reid says costs may drop in the future, but that’s little comfort to many drivers trying to insure their new vehicles.

“Getting insurance quotes for newer Chinese models is still more difficult than for more established European and Japanese alternatives,” he says. “On paper, Chinese cars come with an average insurance cost of £901 a year, around £255 more than equivalent petrol models at £646. But the bigger issue isn’t just price – it’s availability.”

Automobile sales increased in April almost a quarter more were sold than a year ago. According to data from the Society of Motor Manufacturers and Traders (SMMT), there have been large increases in the number of registrations of Chinese brands such as BYD and Jaecoo.

A spokesman for Hastings Direct said it looked at how easy it was to repair a car, how safe it was and what the demand for it was when assessing a bid. It covers some Chinese brands, but “some newer brands still have relatively low volumes in the UK and their parts supply chains are still evolving”.

Axa, which did not cite any of the Carwow research, says some Chinese brands are new to the market and does not have enough data to cover them.

According to Aviva, which acquired Direct Line last year, it will review pricing as more data becomes available.

Admiral said insurance prices have increased in recent years but have not increased EV premiums more than gasoline vehicles. “We continue to strive to provide accurate and competitively priced coverage for EV drivers.” Skywell says it covers its tools.

The Association of British Insurers says it is more difficult for companies to assess risk when there is little loss history.

Oliver Lowe, head of product at Omoda and Jaecoo UK, says the company works closely with insurers. “Anything that’s risk-based is slow to change and adapts to new challenges very quickly. That’s completely understandable. It’s a risk to them. We have a team of experts working on all fronts to reduce those insurance costs.”

He adds: “Insurers are still creating repair data, parts supply chains and long-term damage histories for many of these new models, making some providers cautious. “We’ve seen similar concerns in Japan and Japan. [South] “Korean brands were the first to enter the UK market and as Chinese manufacturers become more established on British roads, insurance availability and prices will increase.”