The notion of ‘bundled car insurance’ is familiar to many Singaporean motorists. But the subject often causes confusion, since car dealerships sometimes present such a purchase as compulsory or will only give the buyer a generous discount if they agree to buy the bundled insurance. The topic has come up several times with our customers.
In one case, a DirectAsia.com customer messaged us on Facebook to tell us he needed to cancel his car insurance policy with us. He was buying a new car, and the dealership told him that he must buy their bundled insurance, and cancel his current cover.
We helped the customer understand his position legally; he was delighted with our response and service, and vowed to come back to us once his bundled policy expired.
Ever watchful of our customers’ rights, we decided to create a blog post on the subject, answering the big questions about bundled insurance in Singapore…
From The DirectAsia.com Underwriting Team …
Can a car dealer ‘force’ their customer to buy a specific car insurance policy?
No, but they can do it by other means, i.e. by giving a bigger discount on the car price if they buy their ‘in-house’ insurance, or offer free insurance with the sale of the car. This makes it more advantageous and compelling for the customer to take their insurance.
Most new cars come with bundled insurance from the car dealer, but what about used cars?
It is relatively unheard of to have bundled car insurance with a used car.
Can a car buyer lodge a complaint with any regulatory body if they are being forced to buy bundled insurance?
The GIA (General Insurance Association) or CASE (Consumers Association of Singapore) may be able to help with problems like this.
Commission is a key part of many businesses, and there’s certainly nothing wrong with it. But as regards some purchases and some industries, it can cause problems for the consumer. In this case, car dealers know they will get big commissions if they sell you a bundled car insurance policy, and will give you substantial discounts if you choose their particular policy.
It’s important to remember that you do not have to take bundled insurance when you buy a car.