Two separate protections matter: cargo insurance and contractual risk transfer.
Cargo insurance: for container or RoRo shipments, buy marine cargo insurance covering total loss and damage, typically 110% of the CIF value (average cost 0.3%–0.8%). Check exclusions — many policies exclude pre-existing damage, so a pre-shipment inspection report is essential to prove the car's condition at loading.
Incoterms define who bears risk and cost at each stage:
1. FOB (Free On Board): exporter pays until the car is loaded on the vessel; risk passes to you at that point. You pay ocean freight and insurance. Common and usually cheapest if you have your own freight forwarder.
2. CIF (Cost, Insurance and Freight): exporter pays freight and minimum insurance to your port. Convenient but the insurance coverage is basic — consider topping it up.
3. EXW (Ex Works): you handle everything from the exporter's yard; only choose this if you have a trusted agent in China.
Put the agreed Incoterm and port clearly in the contract, and never release final payment before the Bill of Lading is issued.