UAE: Why it costs more to insure a Chinese car than a Japanese or Korean car

The auto market has witnessed rapid growth of Chinese cars in the UAE roads, but owners face a higher insurance premiums compared to their Japanese and Korean counterparts.

UAE motorists pay up to 43 per cent more to insure Chinese vehicles, driven by a mix of perceived risks, higher repair costs and uncertainty in repair timeline.

"The average comprehensive premium for a Chinese vehicle is around Dh2,800 to Dh3,000 for a sedan or crossover compared to Dh2,100 for Japanese and Korean brands. This is typically due to uncertainty in repair timelines, limited historical claims data and higher perceived repair costs,” said Hitesh Motwani, Deputy CEO at Insurancemarket.ae.

He added that repairs tend to be more expensive and slower than those of Japanese and Korean models due to parts availability delays, fewer specialised repair shops, and a greater reliance on dealer networks.

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

“This has led insurers to maintain higher premiums to offset increased claim costs and longer vehicle off-road time.” As the after-sales network for Chinese vehicles improves, he expects this to gradually normalise.

Demand and interest in Chinese cars have grown significantly over the past few years, as many new brands have entered the UAE, and confidence and trust in these brands have improved substantially.

According to a study by technology and consulting company Carma, Chinese automotive brands are gaining global media confidence, with limited outright scepticism. Through a variety of online articles, media in the Philippines, Malaysia and the UAE showcased the highest levels of confidence in Chinese automotive brands – over 60 per cent confidence in each of those markets.

“Interest in Chinese brands has grown significantly, from just 2 per cent of total car insurance enquiries in early 2023 to over 10 per cent by mid-2025. Key drivers include improved design, technology, warranty support, and most notably, affordability without sacrificing reliability,” Motwani told Khaleej Times.

Hitesh Motwani

He pointed out that the record rains in early 2024 – which caused massive damage to vehicles in Dubai, Sharjah, and the Northern Emirates – were one of the key factors that shifted the trend.

“The April 2024 floods marked a notable shift. Many residents had to replace their damaged vehicles and began opting for more economical, readily available ones, a space where Chinese brands excel. This sparked a surge in interest in the second and third quarters of 2024,” he added.

Brands like Omoda and Jaecoo, BYD, Jetour and others have made a strong mark in the local market.

“Top performers include MG, Jetour, Geely, and Changan. MG consistently leads in lead volume, while Jetour and Geely have gained ground since 2024, especially in the SUV and crossover segments,” he added.

The deputy CEO of Insurancemarket noted that many buyers initially viewed Chinese cars as temporary or cost-driven decisions. “But now, customer feedback shows increasing brand loyalty and satisfaction, especially with tech features, fuel economy, and warranty coverage.”

To respond to the rise of Chinese brands, insurers in the UAE are quickly adapting by building brand-specific risk models, partnering with authorised workshops and importers, and offering tiered pricing.

“As more data becomes available, we're seeing better segmentation, leading to fairer premiums and better coverage options,” concluded Motwani.

'We have no choice': UAE motorists call for reforms, audits as car insurance rates spike UAE: Most residents choose multi-year fixed car insurance premiums, expect hikes soon UAE: How car insurance policies have changed since heaviest rainfall, floods