Since imported cars – or grey imports – may have unique traits, upgrades, and features, insuring one might work a bit differently. An import car insurance plan recognizes the value of a collector or import car and offers specialized coverage accordingly. Typically, these types of policies are different than insurance for a normal vehicle.
This guide will examine the different factors that influence the insurance premiums of grey imports.
U.S.-Spec Cars vs. Grey Import Cars
A U.S.-delivered (or U.S.-spec) vehicle is one that has been designed for the United States market. If not manufactured on American soil, these vehicles are officially imported by brands that operate in the U.S., keeping in line with the safety standards laid down by the federal government.
They are designed and built to comply with U.S. Federal Motor Vehicle Safety Standards (FMVSS). U.S. deliverable cars are expected to comply with specific standards regarding build quality, quality of components, and other structural specifications.
On the other hand, grey imported cars were not meant for the U.S. market but were imported into the country. Federal and state authorities in the U.S. assert that cars imported from other markets (considered grey or parallel imports) should follow strict compliance procedures and inspections. Specific grey import models may even undergo additional crash and emission control tests.
For example, let’s say a vehicle initially meant for the Asia Pacific automotive market is imported to the United States. According to the U.S. Customs and Border Protection, the car must meet several motor vehicle acts before you or the dealer can import it into the country. Otherwise, the import process is illegal.
Grey Import Insurance
Import car insurance providers will likely consider the performance, the availability of parts, overall durability, and any security-enhancing features of the vehicle in determining a premium. The owner may qualify for discounted rates if the car has additional safety features like anti-lock brakes, stability and traction controls, or theft-alert systems.
If the imported car does not adhere to U.S. safety standards, insurers may have strict conditions that require buyers to modify it to fit U.S. standards. In that case, it would be best to consider modifying the car at specialist garages with a history of doing such work.
The insurance provider may also try and study the grey import’s service history before accepting the application. Sometimes, significant players in the car insurance market may be skeptical about insuring grey imports because their underwriters are unwilling to facilitate the deal. Insurers may be more confident about grey imports that are acquired through reputable dealers.
Factors Affecting Insurance Prices
Below are seven factors most likely to impact your premium when it comes to insuring a grey import.
#1: Cost
Higher-end luxury and performance cars tend to have higher insurance premiums. The cost of the vehicle is one of the primary factors considered by insurance providers when drafting a policy. Higher purchase prices usually call for higher premiums.
If you are considering a grey import, contact a provider specializing in classic and collector car insurance. Our research team has evaluated providers like Hagerty, State Farm, and Progressive, looking at key factors like company history, BBB ratings, and other perks that come with a policy. Here is a more in-depth look at the best classic auto insurance providers today.
#2: Parts Availability
Repair costs for grey import cars can be expensive as they require expert skills and particular parts. The vehicle may not be able to be taken to your local auto repair shop to be fixed. In a total loss scenario, compensating for the car could be more expensive than a comparable U.S.-spec car.
If it has a direct U.S. counterpart, insurance providers like Grundy may offer more stable rates for the grey import. For instance, insurers may provide straightforward terms and standard rates for a JDM Nissan Pulsar since the Nissan Sentra is almost its U.S. counterpart. The insurance company can often provide comparative rates and terms.
#3: Age & Size
If you have been researching grey imports, you will eventually come across the “25-year rule.” As described by the U.S. Customs and Border Protection, a motor vehicle at least 25 years old can be lawfully imported into the U.S. whether or not it complies with all applicable DOT Federal Motor Vehicle Safety Standards. Basically, the 25-year mark is old enough to be considered exempt from the DOT requirements.
However, while the car’s age may make the import process more manageable, it may adversely impact insurance eligibility. Some underwriters may be unwilling to insure vehicles that old.
#4: Right-Hand Drive or Left Hand Drive
Right-hand drive grey imports can be fun to have in a world of left-hand drive cars. However, you may need specific right-hand drive insurance. Talk with your insurance provider ahead of time to let them know the steering wheel is “on the other side.”
#5: Safety Features
Like any other vehicle, you can score discounts on your insurance premium if your grey import has advanced safety and security features. The insurance premiums of grey imports may be lower yet if they comply with the safety standards and regulations set forth by the U.S. government.
#6: Driving Record
Also, like a traditional vehicle, a clean driving record will get you a better grey import insurance plan from a provider. Drivers with moving violations on their record, accidents, and reckless driving violations are deemed higher risk than those with a clean record.
#7: Where You Live
Insurance providers consider the area where you live, and it will be the same with a grey import. If you live in an urban area, be prepared to pay higher premiums, as such regions have higher accident rates than rural locations.
Where you live may also make your grey import a vulnerable target for thieves, especially if the vehicle appreciates over time. A region’s car theft statistics may impact your premium.
Grey Import Insurance: Conclusion
Insuring a grey import may be more expensive and time-consuming than insuring a vehicle initially intended for the U.S. market. However, grey imports come with a certain allure that their U.S. counterparts don’t always possess. Follow the points above to help guide your decision-making process as you seek insurance for your grey import.
