I recently bought a new Toyota Fortuner in Phuket, from the local Toyota dealer. Apart from the fact that I seemed to know more about the available cars than the salesperson (from reading), the process was reasonably smooth – certainly easier than in Moscow, where I also once bought a car (a story for another blog perhaps!).
When it came to finalising the details, I saw that insurance had been included in the invoice. I told them I would probably buy my own insurance, but could they give me the details of what they were offering? My Thai is not good, but it was abundantly clear that not taking their insurance was not an option. I was offered no explanation regarding the cover I had to buy, and only eventually discovered who the insurer was. And I know from research it was not the cheapest available!
This practice of bundled insurance sold by agents as a compulsory purchase was outlawed in UK many years ago. It was once common practice to bundle insurance with many sales, such as cars, travel, and white goods. However, it was eventually deemed anti-competitive, and seen as restricting consumer choice. Unfortunately the laws in most Asian countries still allow this practice.
It is certainly not good for the consumer, but, because agents get large commissions from insurers, there is no incentive to change this practice. As regards Singapore, we can only hope that the current consumer reviews being undertaken by MAS will address this situation and allow consumers to shop for what they want and need, and not be pressured into taking bundled insurance. Open competition is sure to provide better value for money.
If Singapore implements such a change in law, with luck, it will spread to other Asian countries.
What about bundled car insurance in Singapore?
Read our special blog post on bundled car insurance in Singapore