Is Car Loan Already Including Insurance? Here’s the Complete Explanation!

Is car loan already including insurance often becomes an important question for those of you who are planning to own a new vehicle with a financing system. Not infrequently, prospective buyers are still confused about whether the monthly installments paid are only for the car payments, or if they already include insurance protection. To avoid confusion, let’s take a look at the explanation below!

Is Car Loan Already Including Insurance?

At TAF, vehicle insurance is indeed part of the loan package. Therefore, you no longer need to arrange or purchase insurance separately.

This protection will be active immediately once the car leaves the dealer and will last throughout the loan tenor you choose. So, every installment you pay already includes the car payment as well as the insurance cost, making it more practical and providing peace of mind.

Read Also: 5 Smart Strategies for Low Down Payment and Light Car Installments

Types of Insurance Generally Available in Car Loans

Before making a decision, it is important for you to understand the types of insurance usually offered in car loan packages.

1. All Risk Insurance

This insurance provides comprehensive protection for the vehicle, whether minor, moderate, or major damage, including loss due to theft.

All risk is often chosen because of its very wide coverage, ensuring the car is truly protected from various potential losses.

2. Total Loss Only (TLO) Insurance

This type of insurance applies if your car suffers severe damage with repair costs exceeding 75% of the vehicle’s value, or if the vehicle is lost due to theft.

Although the coverage is more limited compared to all risk, TLO remains important as it protects you from major risks.

3. Combination of All Risk and TLO

Some financing institutions provide combination options, where in the initial years of the loan you use all risk insurance, and in the following years it switches to TLO. This scheme is often chosen as it balances insurance premium costs with protection needs.

4. Credit Life Insurance

In addition to protecting the car, there is also coverage for the debtor through credit life insurance. If something unfortunate happens to the loan holder, the remaining installments will be covered by the insurance provider. This is crucial so that the family is not burdened with loan obligations.

Read Also: Is a Down Payment Included in Instalments? Here’s the Full Explanation

Why is Insurance Important in Car Loans?

After understanding the types, you may wonder why insurance plays such an important role in car loans. This protection is not merely a formality, but a necessity that helps maintain your financial condition to remain stable.

1. Protects Against Major Financial Loss

A car is a valuable asset that comes with a significant price tag. If an accident or loss occurs, the expenses you have to bear can be very high. Insurance helps reduce that financial burden so you can safely continue the loan.

2. Provides Peace of Mind When Driving

With insurance protection, you will feel more at ease while driving. Whatever the risks on the road, you know that your car and yourself are covered by the applicable policy.

3. Maintains Financial Stability

Without insurance, every damage or loss would have to be borne on your own. This can disrupt your family’s financial condition, especially if repair costs are very high. With insurance, expenses remain under control as most are covered by the insurer.

Read Also: How to Set a Toyota Car Down Payment According to Your Budget

4. Provides Additional Protection for Debtors

Besides protecting the car, credit life insurance ensures that if something happens to the debtor, the family will not have to bear the remaining installments. This is very helpful in relieving both psychological and financial burdens.

So, is car loan already including insurance? The answer is yes, car loans generally already include vehicle insurance, especially if you are taking financing from an official institution like TAF. 

This protection is very important as it shields you from major losses while ensuring the loan journey remains secure.

If you are currently looking for a trusted car loan solution complete with insurance, TAF can be your best choice.

Quick Fund Solutions with Multipurpose Financing from TAF

In addition to providing car loans complete with insurance, TAF (Toyota Astra Financial Services) also presents multipurpose financing SiapDanai with car BPKB (vehicle ownership document) as collateral. This program is designed to help you obtain quick funds up to IDR 500 million with an easy process and competitive interest rates.

Some advantages of TAF’s multipurpose financing include:

• Fast disbursement process, flexible for various needs.

• Low interest starting from 0.67% per month.

• Car BPKB collateral with vehicle year starting from 2015.

• Flexible tenor of 1–4 years.

• Already includes vehicle insurance and life insurance.

Whatever your needs, from education expenses, home renovation, to business capital, SiapDana is the right solution.

Contact TAF via WhatsApp now and realize all your plans with a simpler and safer step!