Produced by Zhineng Auto
A Chinese brand vehicle is involved in a collision in Europe or Australia and is sent to a repair shop.
The repair shop needs to replace headlight assemblies, steering components, crash sensors, or body structural parts. Some of these parts are not available in local inventory and must be sourced internationally. The owner waits for a month; unable to stop working, picking up children, or commuting, they resort to driving a loaner vehicle.
At this point, who pays for the rental? The car owner, the dealer, the manufacturer, or the insurance company?
If the insurance company advances the payment, will it eventually be reflected in the premiums for Chinese cars?
The answer is as follows: accident liability and policy terms determine who pays first; the waiting time for spare parts determines the size of the bill.
Overseas insurers have already incorporated repair costs, spare part prices, and repairability into their vehicle risk assessments.
If the waiting time is sufficiently long, premiums will increase, and some insurers may even refuse to quote for specific models.
Part 1: Car Waiting for Parts – Who Actually Pays for the Loaner Vehicle?
When this situation occurs overseas, there are three distinct scenarios:
◎ First scenario: Hit by another driver, with no fault on your side.
In the UK, owners can claim reasonable alternative transport costs from the at-fault party. Some accident management companies provide rental vehicles similar to the original car via "credit hire": the owner does not pay upfront, and the rental agency later seeks recovery from the at-fault party's insurer.
The opposing insurer may not accept all rental days or rates. If there is a dispute over liability attribution or the rental amount, the owner may face payment liability if recovery fails. The Financial Ombudsman Service (FOS) in the UK has issued specific consumer warnings regarding this issue.
According to the German Automobile Club (ADAC), in non-at-fault accidents, rental fees that meet necessity and reasonableness criteria can typically be claimed from the at-fault party's insurer. Even without renting a car, compensation for loss of use may be applied for depending on specific circumstances.
Compensation does not mean unlimited access to luxury rentals; one must still prove travel needs, that the vehicle was unsafe to drive, and that the associated costs were reasonable.
Australia has similar arrangements. Insurers like NRMA and Suncorp provide rental services in non-at-fault accidents subject to their policy conditions, requiring confirmation of the at-fault party's details. Practices vary by country and company; "no fault" does not equate to "rentals are always free."
◎ Second scenario: You damaged your own car, or liability is not yet determined.
This depends on what insurance the owner purchased. In the UK, a "courtesy car" usually refers to a small replacement vehicle provided by the policy or repair shop, which may be restricted by designated repair facilities, vehicle availability, and usage duration. In Australia, comprehensive motor insurance sometimes requires purchasing additional "hire car cover" to include rental costs for at-fault accidents.
A 14-day courtesy car provision does not mean that if waiting for parts takes 60 days, the insurer automatically covers the remaining 46 days. A case from the UK FOS illustrates this: a vehicle took nearly six months to repair, but the policy only provided a courtesy car for 14 days.
Because the repair shop ordered the wrong parts, causing unreasonable delays, the ombudsman ultimately required the insurer to compensate the owner for necessary taxi fares. Compensation stems from specific liability determinations.
◎ Third scenario: The vehicle experiences a quality defect while under manufacturer warranty.
Generally, this falls back on the car brand, dealer, and warranty commitments. Standard auto insurance typically does not cover repairs resulting from ordinary mechanical or electrical failures; being under warranty does not mean manufacturers are unconditionally required to provide loaner vehicles in all countries.
UK automotive complaint bodies have clarified in warranty cases that industry codes do not universally mandate manufacturers to provide loaner vehicles.
Australian consumer protection imposes stricter obligations on manufacturers. The Australian Competition and Consumer Commission (ACCC) stipulates that car suppliers must address defects meeting consumer guarantee requirements within a reasonable time; manufacturers or importers must also provide spare parts and repair capability within a reasonable period after purchase.
Consumers may also seek compensation for reasonably foreseeable losses arising from goods failing to meet consumer guarantees.
Whether specific rental expenses can be reimbursed depends on evidence of the defect, loss, and local laws.
There is no unified rule overseas stating "the manufacturer pays" or "insurance pays" for loaner vehicles. Accident type, policy terms, repair negligence, and consumer protection regulations collectively determine the payment path.
Part 2: How Do Slow Spare Part Deliveries Lead to Higher Premiums?
Spare parts involved in overseas accident repairs can be roughly categorized into three types:
◎ Body parts such as doors, lights, and panels;
◎ Safety components such as brakes, steering, airbags, and crash energy-absorbing structures;
◎ Electrical and intelligent components such as cameras, radars, controllers, and high-voltage battery accessories.
Once the latter two categories are damaged, the vehicle may become unsafe to drive, and repairs may involve specialized diagnostics, software matching, and recalibration.
For insurers, where parts come from, how long they take to arrive, and whether local repair shops know how to fix them all impact vehicle downtime.
Even with a 30-day wait, a car that remains safe to drive can enter the workshop once parts arrive; however, vehicles involving brake, steering, or safety systems may need to be taken out of service immediately after the accident.
The UK FOS also considers whether the repair shop had parts pre-stocked and whether the vehicle was originally safe to drive as key factors in determining unreasonable loss of use.
Assume an accident repair costs £3,000, and loaner vehicle rental is calculated at £50 per day. If spare parts arrive in 10 days, the loaner cost is £500; if it takes 60 days, the cost becomes £3,000.
For the same accident, extending the waiting period from 10 days to 60 days results in an additional £2,500 in rental expenses.
Overseas insurers are highly sensitive to this.
The Association of British Insurers (ABI) disclosed that in Q3 2023, insurers paid £160 million for alternative vehicles during repairs, a 47% year-on-year increase; a major reason was the extension of vehicle repair times.
By Q2 2026, total quarterly payouts in the UK auto insurance sector reached £3.2 billion, with an average settled claim payout of approximately £4,900.
Spare parts, sensors, labor hours, and alternative transport costs are jointly driving up accident costs.
Thatcham Research, a UK-based insurance research institute, found in its study of electric vehicles that, within the sample covered by its 2023 analysis, accident repair costs for pure EVs were approximately 25.5% higher than for internal combustion engine vehicles, with repair times about 14% longer. This represents a historical comparison for the entire pure EV industry, not specifically for Chinese brands.
When insurers assess the risk of a model, they look at vehicle performance, collision damage severity, repairability, safety, and anti-theft capabilities.
Repairability involves whether repair procedures are public, part prices, and difficulty of restoration. Delays in spare parts delivery, mandatory full-part replacements, and lack of local technical expertise all weaken the insurance competitiveness of a model.
This impact is already visible in the UK market.
In a 2026 test, the UK auto trading platform Carwow used a single 27-year-old driver residing in Hampshire with no accidents or violations as a sample, requesting quotes for 8 car models from 10 insurance companies.
Nine insurers did not provide quotes for the Skywell BE11, five did not for the XPeng G6, and five did not for the Jaecoo 7. In the same test, seven insurers provided quotes for the BYD Seal U, with an average annual quote of approximately £645, lower than the control vehicle, the Toyota RAV4.
Differentiation by model has emerged: some Chinese cars are difficult to insure, while others are very competitive.
The Australian consumer organization CHOICE, using large-sample quotes from January 2026, found that the average annual premium for new pure EVs was AUD 2,440; Geely's new pure EVs were around AUD 1,622, BYD around AUD 2,220, and Tesla around AUD 2,985.
Brand, model price, local spare parts availability, and service networks are all altering final quotes.
If insurers predict that future individual claim payouts for a model will be high, they typically take three paths: increasing quotes, tightening underwriting conditions, or temporarily refusing to provide quotes.
What influences this is the long-term accumulated claims experience, repair data for the same model series, and underwriters' judgment of uncertainty.
This creates a chain reaction: while the vehicle purchase price may be attractive, paying hundreds of pounds more annually in premiums, or having too few insurers to choose from at renewal, leads consumers to recalculate ownership costs.
In severe cases, vehicles that could technically be repaired may be declared economically totaled by insurers because the total cost of parts, labor, and loaner vehicles is excessively high.
The ABI has explicitly listed additional costs such as loaner vehicles as factors that may influence economic total loss determinations.
Summary
Chinese brands excel at making new cars competitive, but the critical challenge in overseas markets arises after the sale.
Insurers care not only about crash safety but also about how quickly a car can be repaired after an accident, whether repair costs are predictable, if parts are in stock, and how much extra expense owners incur during downtime.
In late 2025, BYD Australia management informed local media that they had commissioned a spare parts warehouse of approximately 20,000 square meters in Melbourne and planned to expand warehousing in other regions; in 2026, BYD further collaborated with Thatcham Research in the UK on repair-friendly design, insurance risk, and repair technology.