APPLICATION OF AS-10

i think it should be capitalised 

Typically first time insurance  is required to bring the car on the  road  and  will fall under the category  “any directly attributable cost of bringing the asset to its working condition for its intended  use” and may be eligible for capitalisation.

 However  the insurance  will be only for a period of one year and  hence this will have to be amortised over a period of one year  just like prepaid  expenses. Including this amount in the cost of  the car will lead to it being depreciated over a period of say 5 years. Which in effect  means you  are carrying  the  insurance expense of 1 year and amortising it over 5 years.  Which  is not acceptable.

So the insurance expense has to be expensed off.