Jul 25, 2011
‘Almost all car dealers insist buyers take up motor loans and insurance from companies they have tied up with.’
MR LEONG SZE HIAN: ‘I bought a new car recently and was told by the manufacturer’s sole agent that I must take up its motor insurance policy with an insurance company. This was despite the fact that I could get a cheaper net motor insurance premium and a lower claims excess from another insurance company.
This is clearly anti-competitive behaviour, which I understand is prevalent in the motor industry here. Thus, is it any wonder that motor insurance premiums have been going up in recent years, when consumers are forced to take up more expensive policies with less benefits in the event of a claim? My understanding is that almost all car dealers insist buyers take up motor loans and insurance from companies they have tied up with. What this means is that even if the buyer can obtain a car loan with better terms, he cannot do so.