As we turn to the time of year where new car models are hitting the markets, we at Kwiksure think it’s a good time to discuss the ins and outs of buying a car in Hong Kong. Beyond the task of finding a car, there are a number of legal regulations new car owners must adhere to in order to make their new car “road legal”. This week, learn what you need to do when you buy a new car in Hong Kong.
Registration and licensing
In Hong Kong, vehicles have a number of registration and licensing requirements that must be met before they’re legally allowed to take to the road. New cars, in particular, require first registration and licensing from the Transport Department. According to the Transport Department website, this can be done by a locally registered motor distributor on your behalf. If successful, your new vehicle will be assigned a license plate number (known officially as a registration mark).
With the registration of a new vehicle, a First Registration Tax will be charged. The taxable value is calculated on the published retail price or provisional taxable value assessed by the Customs and Excise Department. Those of you purchasing what are recognized to be “environment-friendly” vehicles with low emissions may find yourself eligible for a concession of the First Registration Tax.
Your car will be randomly assigned an ordinary license plate, or registration mark, by the Government once your first registration has been completed successfully. Generally, traditional plates follow a format of two alphanumeric characters, followed by four numbers (also referred to as ‘lucky numbers’). Those who desire specific traditional format plates can request it from the Transport Department and can bid for it at set auctions.
If you’re wanting truly personalized plates, such as ones that say S0FAST or 2H0T4U, you’ll need to apply for a Personalized Vehicle Registration Mark. You’ll need to be at least 18 years of age and hold a Hong Kong ID or foreign passport, or be the authorized person of a limited company that holds a valid Certificate of Incorporation. You can check the eligibility of your chosen plate here.
If you buy a second-hand vehicle in Hong Kong, you should be aware that all motor vehicles over the age of six years old are required to undergo annual vehicle examinations at a Designated Car Testing Centre prior to re-licensing. All types of approved new private cars and motorcycles are exempt from mechanical examination prior to their first registration. A list of Designated Car Testing Centres is available here.
Car insurance requirements in Hong Kong
An essential part of buying a car in this country is complying with local laws mandating a minimum level of vehicle insurance in order to legally drive. In Hong Kong, the legislation states that, in order to comply with mandatory insurance laws, your car insurance policy must:
Provide coverage of HKD 100,000,000 for any one event resulting in death or bodily injury.
Motor policies here come in the form of two types of insurance products; Third Party and Comprehensive car insurance.
Third party car insurance
Third Party insurance plans provide the minimum coverage required under Hong Kong law and should be the next thing you purchase after you buy a car. Such policies provide coverage for any liability you have to third parties whilst driving your vehicle. If you’re involved in a car accident, the damage or injury you cause can be covered by your insurance company (virtually all plans offer HKD 2,000,000 towards property damage).
The main drawback to third party car insurance plans is that they don’t cover damages to your own vehicle. In the event of an accident, your insurer will pay your liability to third party claims, however, you’ll be left to cover the cost of repair or replacement of your own vehicle yourself.
Comprehensive car insurance
Comprehensive policies provide the same cover as Third Party plans do, but also provide protection for your own losses. With these plans, you can cover your vehicle, and the costs associated with third parties, all in one plan. In addition to such extensive motoring coverage, comprehensive car insurance plans can also offer the following benefits:
- A No Claims Discount for safe driving
- Monetary payouts for totaling your vehicle, sometimes with no depreciation applied
- Vehicle towing and roadside assistance
- Cover for damaged windscreens
Most plans come with three different levels to choose from (Silver, Gold, and Platinum), which simply offer different levels of coverage benefits. All comprehensive car insurance policies will meet the Hong Kong laws around compulsory coverage, so you can be sure that you’re driving legally after buying a car.
How to secure the best car insurance after you buy a car
Wading through different insurers and their policies can be a challenge, and knowing whether or not you’re getting the best deal can be even harder. Generally, people will only ever talk about car insurance when it comes time to buying or renewing car insurance; so it’s no wonder many people can be nervous or unsure when it comes to knowing where to go for car insurance.
If you’re buying a car in Hong Kong and you need some expert advice on car insurance, contact the helpful team at Kwiksure today! Our advisors are drivers themselves and know the ins-and-outs of Hong Kong motoring better than any other; that’s why we’re the leading car insurance broker in the country. For a free quote, fill out our online form or contact the team at Kwiksure today!