Insurance for imported cars

Buying an imported car can save you money compared to equivalent UK models, or give you a choice of more cars than are available on the UK market. But while registering your new imported car with the Driver and Vehicle Licensing Agency (DVLA) and paying tax and VAT are usually fairly straightforward, getting it insured can be another matter entirely. We explain what you need to know and how to keep imported car insurance costs down.

What is an “imported car”?

You might be forgiven for thinking that imported cars are nothing unusual. After all, huge numbers of cars are made abroad and imported by UK-based car dealers for sale on the UK market. This includes most cars from manufacturers that are based overseas as well as some from quintessentially British brands. For example, even some models from iconic British brand Mini are made in the Netherlands.

However, even when they’re made overseas, most cars imported and sold in this mainstream way are designed and registered for use in the UK.

You can also choose to buy a car that was originally designed to be sold and used in another country. These models are known as “imported cars”, and there are a number of independent dealers that specialise in this market. They can be cheaper than equivalent models sold in the UK, may have better equipment, and you may even be able to get hold of unusual models that aren’t available on the mainstream UK market.

But buying an imported car has downsides too, one of which can be pricier insurance.

Can I insure an imported car?

The short answer is yes, you should be able to.

The slightly longer answer is yes, but it might be trickier than insuring a UK model because of the non-standard risk factors that imported cars often present. This is more likely to be the case if you’re importing from outside of the EU. The number of insurers willing to offer you cover may be limited and you may have to use a specialist insurer. Insurance is also likely to be more expensive.

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What are the main insurance issues for an imported car?

Depending on the specific car, difficulties may emerge because of the following issues:

• Non-standard parts. Insurers consider the cost of replacement parts for your vehicle. If they need to be shipped from overseas this can significantly increase the cost.
• Roadworthiness modifications. Importing cars from outside of the EU means that they may not meet the EU standards to make them road ready. This means you might need to modify them, further inflating the price. Not only will modifications add to the cost of the car, but performance-affecting modifications will often incur high insurance premiums.
• Different construction. Even if the way a car is built doesn’t affect its roadworthiness, there may be construction differences that have an impact on the cost of insuring it, for example, if it’s left-hand drive.
• Performance differences. People often don’t go to the trouble of importing low-end cars, so there’s a good chance that your premium will be inflated right from the start because it’s simply a more powerful vehicle.
• Default classification. Insurers categorise vehicles to determine their insurance costs. With imported cars, different insurers might place them in different categories. When an insurer doesn’t have a suitable category for an imported vehicle, it may default to a “high performance” or similarly expensive vehicle classification.

What are the main types of car import and how do these impact price?

There are 2 main types of imported car in the UK.

Parallel imports

Parallel imports tend to be brought in from other EU countries so are usually similar to their UK equivalents.

• Parallel imports can be cheaper than buying the equivalent model intended for the UK market.
• There may be subtle differences in trim or features, or the car may be configured for left-hand drive.
• Cars in this category conform to EU standards and are therefore likely to meet UK safety or emissions standards.
• You’re less likely to need to make modifications to make the cars roadworthy.
• You are likely to get insurance with very little hassle.
• Quotes may still be higher than non-imported car insurance, but the difference may not be too big if the car is very similar to its UK equivalent.

Grey imports

Grey imports typically come from outside the EU. Cars from Japan and the USA are popular grey imports. There is unlikely to be a UK equivalent to a grey import.

• Cars in this category don’t conform to EU standards and therefore might not meet UK safety or emissions standards.
• There’s a good chance they’ll need to be modified to make them UK road-ready. If you buy from a reputable UK dealer, they should have already made modifications that are necessary for the car to be legal – but ask, to be certain. If you arrange an import personally, you may need to get essential modifications done yourself.
• They’re likely to be left-hand drive and not designed for UK roads.
• Menus and navigation systems may not be designed with English-speaking drivers in mind.
• Grey imports need to pass an Individual Vehicle Approval (IVA) test before an insurer agrees to provide cover.
• You’ll need to supply detailed information about the car before you get an insurance quote.
• Parts may be difficult to source and repairs may be expensive and time consuming.
• All of the factors above will influence the cost of insurance, which may be much higher than for a car designed for the UK market.

Does it cost more to insure an imported car?

When compared to cars designed for the UK market, it can often be more expensive to insure imported vehicles. That’s because imported cars often use non-standard parts that need to be shipped from overseas at extra cost, manufacturers might lack service facilities in the UK and imported cars are often modified or otherwise non-standard, which can further raise the price of insurance.

Some of these extra charges are unavoidable, but there are ways to keep down costs.

Does the type of imported car affect the cost of car insurance?

Yes, grey imports are likely to be more expensive to insure than parallel imports. Many parallel imports will be very similar to, or in some cases indistinguishable from, their UK counterparts. Grey imports are likely to have much bigger differences to UK cars, and this will increase your insurance premium.

Unusual, high-end grey imports are often more enticing to thieves and this is something that car insurers will care about.

How to save money on an imported car insurance policy

• Shop around. We know we say this a lot, but it really is the best way to guarantee the lowest insurance costs. If you’re buying a parallel import, you may even be able to get good-value imported car insurance from a mainstream car insurance provider.
• Consider a specialist insurer. Insurers that specialise in rare, modified or imported cars will often have lower prices. Non-standard insurers will sometimes have special categories for imported vehicles, which can be more cost-effective than getting cover with a typical comprehensive policy.
• Boost security. If you can prove to insurers that your car is safe, particularly if it’s a desirable model, you’re likely to get a better deal. For example, if you can, keep your car in a locked garage or secure driveway overnight.
• Demonstrate your safe driving credentials. Opting for a “black box” insurance policy can bring your premium down by tracking your driving and proving to the insurer that you’re a safe driver.
• Take advantage of discounts, deals and other price reductions. There are a lot of ways to save money on car insurance, and you can leverage these with imported vehicles too.

How to compare imported car insurance providers

You can find the cheapest imported car insurance by getting several quotes from standard insurers with cover for special vehicles. Then compare these with quotes from a number of specialist insurers.

Specialist insurers are often focused on providing cover for people who are truly passionate about cars. Although the vehicles can be more powerful and driven at higher speeds, the drivers themselves are often highly experienced, safety-conscious and know how to look after their car.

This can have the effect of lowering risk levels, and letting specialist insurers offer prices that standard providers cannot.

Depending on your vehicle, the insurer and the cover, you could find a small price difference, or an enormous difference.

• Step 1: Get comprehensive car insurance quotes from standard providers that offer specialist cover for unusual cars, such as imported cars.
• Step 2: Get imported, or special-category insurance quotes from specialist providers.
• Step 3: Compare the 2 types of quotes, and rule out standard providers if there is a significant difference.
• Step 4: Put together a shortlist of the most affordable policies from standard and specialist insurers.
• Step 5: Check the details of your shortlisted policies to make sure they offer the cover you need. Some insurers, particularly specialists, may offer extra benefits tailored to imported car owners.
• Step 6: Buy the best policy for you, based on a combination of price and quality of cover.

What features should I look out for in an imported car insurance policy?

If you’re buying car insurance for an imported car, you’ll need to consider all of the things that matter for regular car insurance, such as levels of cover, exclusions and add-ons.

Specialist car insurance policies may offer a variety of extra benefits which set them apart from standard providers, and in some cases from each other. When you’re comparing imported car insurance policies, consider these as well as the price.

• Salvage retention rights. Having salvage retention rights means you might be able to buy back the wreck if the vehicle is written off, allowing you, for example, to keep rare parts.
• Choice of mechanic. You may be able to choose your own mechanic with specialist insurers.
• Modification limits. Some insurers may only cover cars that have had a certain number of modifications, or will have strict limits on the amount that can be claimed for modifications. Look for an insurer that offers cover for an unlimited number of modifications, or offers this at a lower price.
• Agreed value. This allows you to set an agreed value for your vehicle, that you’ll receive if it’s written off, for example, rather than any payout being limited to an average market value.
• Cover for racing and high-speed use. Standard insurers will rarely cover you on a racetrack or when competing in any kind of car event. Specialists, on the other hand, are more likely to cover these types of risky, recreational pursuits.

The impact of Brexit on car imports

Brexit is unlikely to have an immediate effect on the cost of car insurance for imported cars.

And a last-minute trade deal also meant that fears that the cost of cars imported from the EU would shoot up didn’t come to pass.

There is a chance that the new trade deal will increase administration costs for car insurance companies, and that this may have a knock on effect on premiums, but there is no evidence yet that this is the case.

The bottom line

Buying an imported car can have many benefits, including lower costs, better equipment and the ability to buy an exciting car that isn’t available on the UK market. If you buy from outside of the EU, the car may need modifying before you can drive it on UK roads. Depending on the type of import and the car itself, getting insurance can be trickier and more expensive than for cars intended for UK use, but there are plenty of savvy ways to keep costs down.

Frequently asked questions

• Are Japanese import cars more expensive to insure?

  In many cases, yes. Imported Japanese cars are grey imports, which carry a higher risk as far as insurers are concerned. As well as being likely to need modifications, imported Japanese cars are often high-performance models. Higher-performance cars have been statistically shown to increase the risk of the driver having an accident, and this will have a knock on effect on premiums.

• Are imported cars expensive?

  Not necessarily. In fact, one benefit of buying an imported car is that, like-for-like, it may be cheaper than its closest UK equivalent. That said, many people will only go to the trouble of importing a car if it’s a particularly exciting or rare model, and these cars will tend to be more expensive in the first place. If you’re buying a grey import, you will also need to account for the cost of modifications to make it UK road-legal.

• Are import cars more expensive to repair?

  Typically, yes. It may be harder to get hold of parts that are needed for repairs (in some cases they may need importing from the same country the car was made) and cars may be designed in ways that UK mechanics are less familiar with. Both of these factors mean repairs are likely to be more time-consuming, and more expensive.

• Do I have to pay VAT on an imported car?

  Typically, yes, imported cars are usually subject to VAT. If you’re buying through an imported car dealership, check with it how it manages the VAT process before you sign on the dotted line. If you’re doing a personal import where you purchase the car directly from an overseas seller, VAT will be payable at the UK border (the shipping company may do this for you and ask for reimbursement – this may be in advance).

• Do I have to use a specialist insurer?

  There’s no rule that says you have to use a specialist insurer for an imported car. However, you may find that fewer mainstream insurers are willing to cover you, particularly if you’re buying a grey import, and you may have no choice but to use a specialist. If you’re buying a parallel import, your options are likely to be wider. We recommend checking with both mainstream and specialist insurers to find the best combination of price and quality of cover.

• How can I buy an imported car

  There are a number of independent dealers that specialise in imported cars. Some may specialise in particular types of import, such as Japanese cars. Buying through a professional importer should take away the hassle of managing the import and sorting out any modifications that are necessary to make the car UK roadworthy, but the cost of these services will be built into the price you pay for the car. You can also consider a personal imported car, where you buy directly from the seller (who may be based in the UK or overseas). You may be able to negotiate a better deal, but you take on greater responsibility for ensuring all the right paperwork is in place and any necessary modifications are made.

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Written by

Esther Wolffowitz

Esther Wolffowitz was a publisher at finder.com specialising in insurance. Esther holds an MSc in Media and Communication Governance from the London School of Economics and Political Science (LSE). See full profile