Why it costs more to Insure your Chinese Car in 2025 in Dubai?
If you are one the 45,000 people in the UAE who will choose to buy a Chinese car this article is for you.
Chinese cars now represent 14% of all sales in the UAE
In the car industry they are calling 2024 the Year of the Dragon. Chinese car sales in the UAE have tripled. Siddhaarth Iyer, Head of Digital explains why :
"Like the Koreans before them, these Chinese cars have adopted western styling on purpose, so that they resemble Jeeps, Toyotas and BMWs. A sticker price 20% less than a model in the same class from a traditional marque, helps too. But the real killer has been their availability. While chip shortages and supply chain issues caused waiting times for new cars of up to 9 months, you could often drive your Chinese car straight out of the showroom."
If these cars are so cheap why is the insurance more expensive, relative to Japanese cars?
If you expect your new Haval, Jongqui, GME or JAC to be equally cheap to insure think again. There are a number of reasons why Chinese cars are more expensive to insure. First, spare parts are harder to come by on the open market, which can increase their cost. Second, these new Chinese cars are very tech heavy, which means when there is an accident there will be more components to replace. This goes double for flood or electrical issues.
And finally, it all comes down to pricing an uncertain risk. Here's Vaibhav Shah, Head of Product at GIG :
“Toyotas have been sold in the UAE for 75 years. Which means we know how often they break down, and how much they cost to fix. The Agencies in the UAE have well established spare parts distribution hubs, so repairs are taken care of efficiently.
That predictability is what enables us to accurately price your premium and keep it competitive. For Chinese cars, while all the signs are good, we simply can't know how reliable they will be - which is why it will cost more to insure than another car with a similar value. As a rough guide, expect to spend 4.5% of the car's value per year on insurance. You'll see this increase in premium across all insurance companies in the UAE. But as the volumes increase and established Agencies start building a strong setup for managing these makes, the premiums will come back to competitive levels and in line with other established brands.”
Does GIG Insurance provide cover for Chinese cars?
The short answer is yes, at GIG we are insuring more and more Chinese cars. However, there are a few things to bear in mind. Here's Vaibhav again;
"When we insure a car we have to make sure that it can be repaired in the event of an accident, so we are naturally cautious with new entrants. Do they have parts, do the agencies have adequate and knowledgeable staff. Otherwise, you can be left with a badly repaired vehicle after a long, long wait."
I'm thinking of buying a Chinese car what does all this mean and what should I do?
If at first you don't get the answer you need from our online portal, call our Specialist Call Centre agents on 800292. They will advise you once we know the Model and Make of your car and will provide you with a quote instantly.
But there is good news! You should expect that over time, Chinese Car Insurance costs will decrease as we get better and better data.
Let me leave you with an old Chinese Proverb : 'Man who runs in front of car gets tired. Man who runs behind car gets exhausted.'(Except where it is an EV of course)
