Some insurers refuse to underwrite Chinese cars - and when they do, premiums can be twice as expensive as other models

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The arrival of several new Chinese brands has opened the door to cheaper new cars for UK drivers in the last 18 months.

But there is a hidden cost that's making them far less affordable than motorists first realise.

This is because some motor insurance providers won't cover them.

And those that will are quoting hundreds of pounds more than they would for a similar model produced by an established mainstream manufacturer from Europe, Japan, Korea and the US.

This means the low sticker price of several new Chinese cars is quickly wiped out by the fact they cost more than £2,000 to insure, according to comparison site Carwow. 

The issue is that despite almost 200,000 Chinese cars being registered in Britain last year, insurers remain incredibly cautious.

Carwow’s analysis shows that a lack of familiarity with brands and somewhat limited parts availability is making them difficult to repair - and this means insurers are not currently in the position to underwrite them.

As a result, motorists tempted by the lower price of Chinese cars are faced with less choice when buying insurance - and when they do, the premiums can be sky high.

There is a hidden cost of owning a Chinese EV, an investigation has found. Pictured: Chinese BYDs coming off the production line in Thailand

Analysis by Daily Mail and This is Money in January revealed that more than 196,000 Chinese cars were sold in the UK in 2025.

Based on industry figures provided by the Society of Motor Manufacturers and Traders, this is more than double the 96,000 sold in 2024. 

Auto Trader says that two in five models being looked at on its website are Chinese, while industry analysts forecast that Chinese brands will represent a fifth of new cars sold in Britain by 2030.

This rapid rise in popularity has been driven primarily by attractive pricing.

Financial support from Beijing means Chinese brands are able to undercut models from legacy European brands by thousands of pounds, making them more appealing to both private buyers and fleet operators.

An appearance of solid build quality, impressive range performance from electric and plug-in hybrid models, and an abundance of technology and gadgets in their cabins has also seen them shoot up the sales charts in the last year and a half.

As such, MG - which has been on the market under Chinese stewardship for over a decade and is by far the most established of the East Asian marques - is now among the 10 best-selling car brands in the UK. 

Jaecoo, which is owned by Chinese automotive giant Chery, hit headlines earlier this month when its 7 SUV - dubbed the 'Temu Range Rover' - topped the sales rankings in January. Starting from £30,115, it is around a third of the price of one of the luxury British 4x4s.

The BYD Seal U, also an electrified SUV, was sixth on the UK best sellers list last month, while the MG HS was tenth. 

Jaecoo also revealed that the 7, despite only launching in January 2025, had accrued more orders from private buyers in the last 12 months than any other motor in dealers.

Nothing to smile about: Carwow found that 9 of the 10 biggest insurers in Britain wouldn't cover a Chinese Skywell BE11 SUV

Some providers won't insure Chinese cars at all 

Carwow's investigation reveals that owners of these affordable Chinese models will have a challenge trying to find an insurance provider who will cover their cars. 

It obtained quotes from ten of the UK’s biggest insurers for four Chinese cars and four of their mainstream equivalents.

In the Chinese corner is the volume-selling Jaecoo 7, Xpeng G6, BYD Seal U and Skywell BE11.

Representing legacy brands was the Volkswagen Tiguan, Kia EV3, Peugeot e-3008 and Toyota RAV4.

When searching for policies online, just one of the ten major providers would cover the £31,990 Skywell BE11. And the provider than did - Esure - quoted £2,203.38.

That was more than double the cheapest quote for the mainstream equivalent - the Japanese Toyota RAV4, which costs from just over £40,000.

The investigation found that all but one provider would cover the £38,900 VW Tiguan with an average policy ringing in at £700. 

In contrast, five insurers refused to quote for the Jaecoo 7 - the nearest Chinese equivalent that's almost £9,000 cheaper in dealerships - resulting in an average premium of £865.

For the Chinese Xpeng G6 and Korean Kia EV3, the results were similar: just five insurers were able to provide quotes for the G6 - an electric SUV launched in the UK just over a year ago.

And the quotes that were provided were much higher than those for the EV3; £1,102 on average versus £827. 

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Even owners of BYDs - the world's biggest electric car seller having recently overtaken Tesla - could find it difficult generating insurance competition to lower their premiums.

When running quotes on the Seal U, Carwow found that three of the ten insurers wouldn't touch it.

That said, the average policy price for those that did offer cover was nearly £200 cheaper than the European equivalent - the Peugeot e-3008. 

Incredibly, two of the insurers - Ageas and Axa - refused to provide quotes for any of the four Chinese cars.

The reason insurers remain hesitant to underwrite Chinese models is mainly due to concerns about repairability.

Ageas said most of its customers drive models that are over eight years old. Therefore, due to the infancy of Chinese brands, these cars are yet to fall into their typical cover bracket.

Tom Quirke, chief underwriting officer at Ageas, said: 'Many of these brands are new to the market and therefore are not yet in Ageas’s target market. However, we do have a process to add new models to our list of acceptable vehicles when appropriate.'

Meanwhile, LV= General Insurance, owned by Allianz, said it doesn’t provide cover for the Xpeng G6, BYD Seal U, and Skywell BE11 because they’re still evaluating the insurance risks associated with these vehicles.

'An issue with the UK insurance industry and not Chinese cars' 

Iain Reid from Carwow, who undertook the investigation, said the problem therefore does not lie with Chinese cars but the UK insurance industry 'struggling to keep pace with a rapidly changing market'.

This is because insurers heavily draw on something called a 'Vehicle Risk Rating'.

This is created by Thatcham Research, an independent safety and security body that's funded by the motor insurance industry.

The rating is based on a variety of factors, including repair costs, parts prices, vehicle security and overall safety performance. 

But because newer market entrants - namely the Chinese brands featured in the investigation - may have limited historical claims data or less‑established repair networks, this can influence how individual insurers evaluate risk. 

'New brands, models and technologies are arriving at speed, particularly with the rise of electric and hybrid vehicles, and insurers need to adapt far faster than they are. It’s simply not fair for drivers to be penalised because insurance pricing and data can’t keep up,' Reid said.

'Delays in getting parts to garages to fix cars can take longer than normal, and the longer it takes to repair a car the more it costs the insurer, which increases the risk.

'When setting insurance costs, companies rely on historical data about a vehicle’s reliability, repair costs and the likelihood of it being damaged or stolen. This is hard to do with many of the Chinese models that have been in the UK for only a few years.' 

Buyers of Datsuns and other Japanese cars in the 1960s faced similar issues when trying to insure them, with providers tentative to underwrite until their parts supply chains had become more established and dependable.

'While costs may fall as these models become more established, that offers little comfort to drivers trying to insure them today,' Reid said.

We took the investigation results to the Association of British Insurers.

An ABI spokesperson told us: 'Insurers have a strong track record of supporting and responding to new technologies and vehicle developments. 

'Decisions on whether to offer cover for specific vehicles are commercial matters for individual insurers based on their risk appetite. 

'Newer models may have limited historical claims data, which is essential for insurers to evaluate risk. Insurers need to understand how safely a vehicle performs in real‑world conditions and consider how delays in repair costs and part shortages could impact overall claims costs. 

'The motor market remains highly competitive, so we’d always encourage customers to shop around for the policy that best meets their needs.'

Carwow's report comes two years after it was revealed that BYD's Seal saloon and the Ora Funky Cat supermini (which then received a welcome name change to '03') had become uninsurable.

This was because a number had been written off after sustaining minor damage because garages were unable to access spare parts or repair instructions for the cars.