This month, Kwiksure has been inundated with new quote requests from Tesla owners. The recent Hong Kong budget has announced a new tax break of up to HKD 250,000, available immediately, if buyers trade in a car older than six years, and purchase an electric vehicle. This has been in response to a previous HKD 97,500 cap on tax breaks introduced last year - and one that all but stifled the market locally. These new owners, however, are about to find out that premiums are becoming more expensive - and that’s because of the cost of Tesla repairs.
New tax announcements of the Hong Kong government
People wanting to enjoy a higher tax break need to first trade in an older car. This vehicle needs to be at least six years old, with the current owner having had possession of it for at least three consecutive years. The move has been touted to help the city maintain the number of cars on its roads, and prevent opportunistic buyers from purchasing a cheap, older car to take advantage of the tax break.
What this means is that the HKD 250,000 tax break can fully cover the first registration of new, private electronic vehicles that are valued at HKD 377,500 or less. The previous HKD 97,500 cap will still apply to purchases of EVs that are not under the One-for-One Replacement scheme. Both of the tax breaks are referred to on Tesla’s own website.
Insurance for Tesla vehicles in Hong Kong
One thing that we’ve been noticing is that the choice of car insurance products for Tesla vehicles is becoming narrower, and affordable insurance premiums are harder to come by. One of the biggest reasons for this comes down to the costs for Tesla repairs.
Tesla repairs driving up insurance premiums
In Hong Kong, there are very few appointed service centers for Tesla vehicles. The impact this has on insurers is huge; normal vehicles needing repairs have a healthy market of mechanics and body shops with which competitive repair prices can be found. For Tesla vehicles, this is not the case. In particular, we’ve witnessed the following Tesla repairs cost as much as:
- Around HKD 100,000 for a door repair
- Around HKD 20,000 for a windscreen
- Around HKD 3,000 for a key replacement
A windscreen repair or replacement for a standard vehicle, by comparison, can cost as little as a few thousand. The impact this has for insurers, especially in a highly congested city as Hong Kong, is that the risk of covering such repairs is greater, and not even the surge in EV purchases in the past year has been enough to curb rising premiums as a response to repair costs.
Impact on insurer behaviour
For some insurers, the claims ratio for covering the repairs of Tesla owners is simply too much at this time. We have a few car insurance partners who will outright reject applications from drivers looking to insure their electric vehicle if it is a Tesla. There are, however, some that still offer plans for these owners - however the plans themselves are changing.
We’ve had clients and new customers approach us so far with reports of insurers increasing the premiums of their Tesla coverage by double - and even more. As part of their request to find cheaper insurance, we’ve been able to secure plans with up to a 30% reduction in the cost of insurance premiums they would otherwise pay.
The downside to this cheaper coverage is that these plans can often have less benefits and lower limits than their previous plan.
What do I do if I need insurance for my Tesla?
Basically, you just need to understand that, at this time, you may not have as many options for getting coverage for your vehicle as you might if it were from a different maker. That’s not to say that you can’t find the coverage you’ll need in Hong Kong, but understanding how the costs of Tesla repairs impacts the cost of insurance premiums will help you experience less sticker shock when it comes to sourcing quotes for car insurance.
Kwiksure remains the best choice for finding and securing adequate car insurance in the city. Our expert advisors have decades of experience between them, and they remain completely committed to ensuring our clients have the best possible experience at all times. For a free quote, or advice on insurance before and after you buy a car, contact the team at Kwiksure today!