Car Insurance for Imported Cars

Importing a car into Australia presents unique challenges when it comes to your imported vehicle insurance, particularly for cars purchased from sellers in other countries and shipped to Australia. While some larger insurers do offer import car insurance, opting for specialist insurers familiar with the intricacies of imported cars can be a smarter choice.

What counts as ‘an imported car’ in Australia?

While most cars in Australia are manufactured overseas by their respective companies, an imported vehicle, in insurance terms, refers to one purchased from a foreign vendor, or dealer, and imported to Australia for your use.

What are ‘Grey Imports’?

‘Grey imports’ are vehicles that are imported legally from another country, but not through official manufacturer supply channels. For example, you may purchase a vintage Aston Martin from a British seller via an online auction. Your transaction is private, doesn’t involve a dealer, and naturally you want to get behind the wheel of your new ride as quickly as possible. Your new car in this case, is deemed a ‘grey import’. 

Important Note: Not all insurers will cover grey imports, so explore your options carefully.

Imported Car Insurance Costs:

Insuring an imported vehicle in Australia can be more complex and expensive compared to locally manufactured cars. This is due to differing specifications and safety standards. All cars need to be roadworthy to Australian standards before you can drive them here. These requirements vary slightly between states and territories. You’ll find more on registering your imported car in your local area here:

Types of Imported Car Insurance Available:

Like any other type of car cover, your options for imported car insurance (Australia) will vary. Imported cars can typically be insured with the same types of insurance as Australian-made cars, including: 

• comprehensive cover, 

• third party fire and theft cover, 

• third party property damage.

However, some insurers may only offer comprehensive cover for high-value imported cars.

Cover for Classic Cars: Insurance for classic cars insurance can be purchased in Australia. Specialised classic car insurance may be your best option, as these policies usually include more benefits when it comes to parts and repairs, than the more general insurers. 

If you do choose a larger insurer, make sure your vehicle meets their definition for ‘classic car’. The defining factors include your car’s age and historical significance.

Cover for Stored Cars: Not all cars are bought to be driven! Some imported vehicles are for display only, or for a one-time specific event, such as a wedding or parade, and then they’re stored away. Stored vehicles can still be damaged or stolen - which is why insurance matters. Comprehensive car insurance can cover imported cars even when they’re not in regular use. The better your storage and security, the lower your premium is likely to be.

Does it cost more to insure an imported car?

Yes it does. Several factors influence the cost of insurance for imported cars, including your car's: 

• value,

• age, 

• required modifications (to meet Australian roadworthiness standards), 

• repair costs, 

• insurance history, 

• usage patterns,

The excess you’re willing to pay, and your experience as the driver, are also relevant. 

The more special and unusual your imported car, the more likely it is that your insurance premium will creep higher. This is because keeping imported cars roadworthy presents its own set of challenges, including:

1. Non-standard parts: Imported cars may include parts that are difficult to source locally.

2. Higher repair costs: Repairing imported cars, especially those with luxury or exotic features, can be more expensive due to the limited availability of parts and specialised repair services.

3. Performance differences: High-performance imported cars are often considered riskier to insure due to their speed and horsepower, leading to higher premiums for you.

4. Safety modifications: As mentioned earlier, imported vehicles may need modifications to meet Australian safety standards, posing additional insurance challenges, and adding to your costs.

It's advisable to explore different insurers and compare quotes to find the most competitive rates.

Specialist vs. Standard Insurers:

Choosing between specialist and standard insurers can significantly impact your insurance experience. While standard insurers may impose limitations on cover for imported cars and charge higher premiums, specialist insurers offer tailored solutions and are well-equipped to handle unique or modified vehicles. 

Standard insurers: 

• Usually decide which repairers you can use.

• Often lay claim to any damaged parts and vehicles (i.e. they claim the salvage rights, which means they can onsell any usable parts, not you).

• Impose limits on the number of vehicle modifications they'll cover.

• Charge very high premiums for any modifications.

• Mostly offer market value, though agreed value cover can be found for additional costs.

• Rarely offer cover for racing or high-speed use, which can be an issue if you’re importing a high-performance vehicle.

While a lifetime repair guarantee is usually offered at an additional premium, having a vehicle with rare or non-standard components may void this. There’s also not much consideration given to layup periods (i.e. the period your imported car is in storage). They’re either not offered by standard insurers, or only for a very limited period.

Specialist insurers: 

• Usually allow your choice of repairer.

• Know which workshops are best for specialised or imported cars.

• Assign any salvage rights over to you.

• Cover your required modifications (with limits, but generally more comprehensively than a standard insurer.)

• Recognise that grey imports need extensive modifications to be legally driven.

• Cover your lay-up period.

• Offer agreed value by default, which is important for vintage cars with widely fluctuating market values.

• Are more likely to cover high risk recreational use like: rallies, time trials and motorsport events.

Vintage and classic car specialist insurers may also offer reduced price lay-up periods for cars that don't see much use.

Finding the Right Insurance Provider:

The Insurance Council of Australia (ICA) lists only nine insurance companies offering specialised cover for imported and prestige vehicles. Among them are reputable names like: 

• Enthusiast

• Lumley Special Vehicles

• SGIO (WA)

• SGIC (SA)

• NRMA (NSW, ACT, TAS, QLD)

• RAA Insurance (SA)

• RACV (Vic)

• Ryno Insurance

• Shannons

Are Japanese import cars more expensive to insure?

Yes, and this is primarily because the process of buying and importing a Japanese car differs from acquiring a popular model available locally. Remember, all vehicles driven on Australian roads must, at the very least, be covered by Compulsory Third Party (CTP) or Greenslip insurance, which is separate from any specialised or comprehensive car insurance policy.

Imported Vehicle Car Insurance - Why Compare?

When comparing insurance options for imported cars, consider insurers that offer suitable cover, compare policy premiums from multiple providers, review modification limits, and obtain a range of quotes to find the most affordable and appropriate cover for your vehicle.

Sources

Cars Guide - How to import cars from Japan

Infrastructure.gov - importing road vehicles

Infrastructure.gov - specialist enthusiast vehicles

Shannons motor insurance - PDS

Enthusiast motor insurance - PDS

Lumley special vehicle insurance - PDS

Ryno motor insurance - PDS

RAA car insurance - PDS

https://rvcs.infrastructure.gov.au/sevs/SEVSfront.html

https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/luxury-car-tax/when-lct-applies/importing-a-luxury-car

https://www5.austlii.edu.au/au/legis/cth/consol_act/cta1995178/sch4.html

https://austroads.com.au/drivers-and-vehicles

Paul Coughran is the General Manager of Emerging Verticals at Compare Club. Paul has over 20 years of experience across a wide range of industries including Banking and Finance, Telecommunications and Energy. Paul leads a team of trusted experts dedicated to helping individuals make informed decisions about their insurance and utilities needs.

Meet our car insurance expert, Paul Coughran

Paul's top car insurance tips

• 1

  Regularly compare your insurance policies – You could be paying for cover you don’t need. Shopping around every so often can save you a fair bit, maybe even hundreds each year.

• 2

  Don’t just look at the premium—check the excess too. While a higher excess might bring down your premium, remember you’ll have to fork out more if you do need to claim.

• 3

  Double-check what’s included in your policy. Extras like windscreen cover or roadside assistance might not be part of the deal and could cost you more.

• 4

  If you don’t drive much, consider usage-based insurance. Some policies base your cost on how much you actually drive, if you work from home or only use your car for short trips this might be a much better option.