Lack of familiarity with these new makes and models coming from China, parts availability, questions around repairability and unknown reliability unsurprisingly will make some insurers cautious, as illustrated by the results of Carwow’s investigation.
For instance, LV= General Insurance, owned by Allianz, said it doesn’t provide cover for the XPeng G6, BYD Seal U, and Skywell BE11 because it’s still evaluating the insurance risks associated with these particular models.
However, this isn’t a new issue or one exclusive to Chinese cars. “It’s a problem with the UK insurance industry struggling to keep pace with a rapidly changing market,” said Carwow’s director of editorial, Iain Reid.
“Every wave of new manufacturers, from Japanese brands in the past to today’s Chinese entrants, has faced the same challenge,” he said, adding, “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.”
Things should improve over time once these new brands from China become more settled in the UK and we learn more about the reliability and cost of repair for their cars. However, in the meantime anyone considering a newly launched model, whether or not it’s Chinese, should shop around for insurance before they buy, so as not to be caught out if it turns out insurers don’t offer coverage yet.
Reid also suggests buyers keep an eye out for manufacturer-backed insurance schemes, which can help keep costs down while insurers build confidence.
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