Wearnes Automotive will install video cameras in its entire rental fleet, making it probably the first leasing operator to do so for all its vehicles.
Cars will be fitted with a palm- sized front-facing camera gradually, as and when they are back for servicing.
Wearnes expects to complete equipping its fleet of more than 300 by April.
The total investment is close to $100,000.
Wearnes assistant general manager for leasing Carine Soh said the project, which started early this year as a pilot, was prompted by cases of accidents in which the party at fault denies liability.
"One of our main objectives is to protect our customers' interests," she said.
"We have witnessed many accident cases involving reckless driving, as well as people changing their statements when at fault.
"We do not want our customers to be subjected to such trauma. Having video footage of accidents also speeds up investigation, so that disputes can be resolved quickly and we can get the customers' cars repaired and returned to them in as short a time as possible."
She added that most of Wearnes' customers welcome the idea. But there are also some who are against the move for privacy reasons.
Mr Anthony Ng, 43, who is leasing a turbodiesel Renault Grand Scenic from Wearnes, welcomes the move.
"It's a good initiative," said the technical director of a multinational. "If it were my own car, I would install a camera too."
Although he has not had an encounter where a camera might have helped, he believes having video evidence "avoids grey areas and lends clarity" to any situation.
"I was once hit from behind," he said.
"Even though it was a pretty clear-cut case, if there had been a camera, we could have understood how the accident happened."
The popularity of car cameras has exploded in recent years, as the benefits of having one spread fast on new media.
The cost of such cameras has also come down, with units available for as little as $50.
Motor insurers are incentivising the use of these cameras, with DirectAsia Insurance offering a 4 per cent discount on premiums to policyholders who install them.
Mr David Siew, managing director of accessory supplier Tomo- CSE Autotrim, said his company sells 500 to 600 car cameras a month - up from about 100 three years ago.
"We expect to sell more next year," he said. "We have the smallest front-and-rear model in the market."
According to international market research firm IHS Technology, sales of car cameras worldwide will quadruple in the next five years.
Shipment of cameras for cars will hit 20.2 million this year, up from 16 million in 2012.
By 2020, it will reach 82.7 million units.