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Price comparison sites aren’t always good for your wallet

Is anything more irritating than price comparison site adverts? Yes, the sites themselves. Comparison sites have made it easier to shop around, but are they always working in your best interests?

As if opera singers, meerkats and scratchy-cartoon women singing YMCA aren’t bad enough; our research has found that using some price comparison sites can prove even worse.

Overall satisfaction scores for the sites we tested stood at a pitiful 42%. Why? How long have you got?

Of the 9,000 respondents to our recent survey, two-fifths didn’t make a purchase on the site after searching for a financial product.

When we asked why these people didn’t make a purchase, 14% said they just didn’t trust comparison sites, while 12% were unhappy with the quote they got. And almost 10% said the quote they got on the site differed from the one they were offered when they clicked through to the product provider’s own site.

Cheaper now, but it could cost you later

How could this happen? Surely there could be nothing more ‘simples’ than popping in a few details and seeing a range of results that are based on the information you’ve provided?

Apparently not, as the reality is many comparison sites use tactics that may be designed to deliver a quote as quickly as possible. To do this they use pre-selected answers, make assumptions and strip out additional benefits that you pay extra for, until after you’ve got your quote.

In some cases this can make quotes appear cheaper, but can result in you getting a policy that will cost you more in the long-run.

Unexpected surprises with pre-ticked excess

Take motor insurance as an example. Comparison sites will presume you don’t have any motoring convictions. But if you miss this box, and subsequently buy a policy, you could find yourself without cover if you do happen to have previous convictions.

Excess is also an issue. Nine of the eleven sites we looked at pre-selected a voluntary excess of more than £150. In one case (Moneyexpert.com) this excess was significantly higher, at £400. And that’s before the compulsory excess was added at the results page!

It’s obvious why this kind of action would irritate people. Say you’re buying insurance for your trusty motor, which is valued at £1,400. If you fail to untick the voluntary excess, you may have to pay £400 upfront in the event of a claim, right? Nope, because there’s the compulsory excess to factor in as well. If that’s £600, you’ll now have to pay £1,000 upfront.

Sure, you may get a cheap quote initially, but is it really worth it if you’re stumping up for most of the repairs? I don’t think so, and this is the key problem with comparison sites.

Price comparison sites may offer a convenient way to get dozens of quotes, but what you’re offered might not be what you were expecting.

Unfortunately, there’s no real way around the need to read the small print, and you’ll have to make sure you double-check every page of the forms that come with your quote. But then again, maybe that’s better than spending half a day on the phone with lots of different financial providers, hasn’t it?

Comments

My main worry about comparison sites is that they will be getting any commission for putting my business through to a retailer, So I’d rather do the investigation myself and then buy through a cashback site. And someone must pay the commission so I expect it’ll be loaded into the quotes I get so not always the cheapest.

john mccolgan says:
27 March 2012

As was said in the article the television adverts are terribly annoying. As my own protest against the warbling opera singer and the like, I would not purchase through any comparison sites, simples.
On a more sinister note, the information trawled from you by these sites before they give you a quote is a concern to me. Accordingly I would not use them. Nothing wrong with some phonecalls to find the cost of “proper” insurance and not a stripped down version which breaks down when you need it. To finish, I wish we could put some frm of cap on the percentage of the premium these companies can spend on the never ending tv adverts

Roger Gradeless says:
30 March 2012

My concern is with price comparison websites which give prices on goods sourced from overseas without indicating that the goods may attract VAT and other duties.when imported into the UK.

This could add significantly to the ‘headline’ price.

Soundararaj says:
30 March 2012

I have used them for airline tickets and I find when I actualy go to book the price increases!

Sheila says:
30 March 2012

I too absolutely loathe the ads, and try to avoid these sites as a result. In particular I am very put off by the insulting assumption that potential customers are complete idiots.
I did use one of the comparison sites recently to try to speed up the chore of changing my car insurance, because my insurer had, without my agreement, changed some of the minor conditions on my old policy, reducing the scope of the cover when quoting for renewal, while at the same time increasing the cost.
When I subsequently rang to cancel the renewal my insurer (of course!) offered to try get me a better requote (and continued to try to persuade me to agree to this until I hung up) but I was already determined to refuse this.
Getting a cheaper quote elsewhere using a comparison site proved possible but took far longer than I anticipated.
The first 3 policies I “selected” turned out to have subsequent sneaky additions to the price quoted originally. So did the fourth, but as this one still resulted in a better policy at a cheaper price, meeting my objective, I accepted it. Frankly I’d have got much the same result without using a comparison site!
Incidentally, I received 11 items of junk mail from companies who had become aware that my insurance was due for renewal…. I wonder how?
Somel of these marketing mailshots suggested a switch could give me a potential saving … of more than my actual annual renewal cost!

It seems a common and very unethical practice for renewal quotes to be inflated. Something Which should campaign against. If you ignore the renewal and go to the site and get a new online quote you can save a fortune. Then you have to just ignore or refuse the renewal.

My partner used two comparison sites to get a motor insurance quote whilst she was a learner driver having bought an old car. Every time she was given a ‘cheap’ quote it was followed by a telephone call adding up to £300 to the original quote ! I referred her to Aviva who not only gave her a better quote (with better conditions) but they HONOURED their original quote.
As for me i have never found a better quote (car or home insurance) on such sites invariably getting better deal by going direct.
Thus I am very wary of such sites

Perhaps I live in ignorance but I’ve used Gocompare successfully (I judge) for some years. I find the tv ads as distressing as everyone else so I reduced my ITV viewing, and found the mute button on the zapper.

Ray says:
30 March 2012

I have recently used one of the sites to buy car insurance for myself and my wife. I was bemused to find that the dozens of quotes ranged from under £200 to over £900. Since there was a clustering around £300 I opted for one of those – the company I was with already. Am I right in thinking that since we get what we pay for in life you would have to be daft to go for the lowest quote? On the other hand I might have just spent over £100 more than I needed to. As for the upper quotes I assume that they were not interested in my business. I guess if I had nothing better to do with my life I would have compared and contrasted the small print of a range of quotes but, as they say, life is too short!

I think you need a better reason that to pay more than you need. If the cheapest quote was from a reputable company, why pay more ? I’ve never found much correlation between how much you pay and the quality of service you get.More or less the cheapest quote I’ve had in the last 2 years has been from a Company it’s a pleasure to do business with, LV.

JamesAard1 says:
30 March 2012

Is there a comparison website – comparison website?
I’m afraid that the cynics still win the day as there seems to be little honour amongst ‘those who wish to take our money’. So it falls upon us yet again to use them wisely as a guide but make our own informed and hopefully intelligent choice. Then again, you could give me £50 and I’ll ask around!

My experience with one site was hat it didn’t appear to be passing through all the accidents/convictions that I had entered – so basically the insurance I bought would have been invalid if there had been an accident, so I had to cancel it and wait for a refund!

Choosing insurance would be a lot more hassle without these comparison sites, though I would never visit GoCompare website under any circumstance for the most awful TV Ad campaign ever. They quickly show you the choice available but obviously – to anyone with common sense – they cannot give you an exact quote because that will depend entirely on your own record and details. People who expect otherwise presumably don’t understand this.

After receiving an insurance quote with a hefty hike I checked out the websites of various companies all of which offered to save me money in their TV ads, none of them actually did. I then checked with the meerkats and the cartoon lady and eventually found a decent quote with a reputable insurance company.

What I’ve found over the years is that insurance companies will give you a good quote as a new customer, but after about two years their prices suddenly soar, to me it seems that they don’t expect you to shop around once you’ve been with them for a few years.

It always pays to shop around but you need to ensure you are comparing like for like.

Jane Evans says:
30 March 2012

After filling in all my details at one of these comparison websites, I found that none of the quotes was satisfactory and I went back to my original insurers. However, I declared a minor accident my husband had some months before (as he was a named driver on my policy) which got me on to a list which was sold on to any number of companies which specialise in claims. The result is that every week or so I get a call “about the accident you had in March 2009..” Infuriating – I must have neglected to tick a box somewhere, but I’ll never go near any of those sites again.

I just use them as one tool in an arsenal of tools. I recommend to ALWAYS go direct to a company’s website by typing the URL into your browser and NOT using a link from either Google or a comparison website.

The results from the sites should be solely used as a guide and as a sample list of which companies to try.

DWS says:
30 March 2012

Having just read your article on comparison sites, I am amazed at the comments particularly about selecting the amount of excess which you want to pay and not being able to give accurate information on motoring convictions. I have just bought a policy through comparethemarket.com which has saved me this year £76 against my existing insurer’s renewal quote. Identical policies. You are certainly asked for motoring convictions and any other non-motoring convictions and you are also asked if you want to change your excess. I am thoroughly satisfied using comparison websites, they have saved me a fortune in renewals for two car policies, home insurance and in selecting the best savings accounts. But if your members want to line the pockets of insurers, it is their choice.

mrg says:
30 March 2012

My comment is an exact replica of that of DWS. Compare the market.com nearly halved my motor insurance quote and I ended up with the post office insurance with identical conditions.

I also have taken their advice and purchased the best ISAs for the last three years and found their listing and assessment of a variety of purchases to be extremely helpful.

I think your summary was most unfair unlike your normal balanced assessments.

I should say that I am referring to on-line advice having never tried that advertised on TV

MRG

Jon says:
30 March 2012

I have tried a few and been far from happy with them. I don’t trust them as they have a vested interest – they are receiving commission for referrals to providers. I don’t quite rate them as a scam, but I have them all set up as spammers on my email, and I don’t intend to change that 🙂

As an insurance professional I have to say the sites are misleading, they often do not include add ons such as Legal Protection and Protected Bonus which if you existing policy includes it is like comparing apples with pears.
However, the most concerning issue is that in order to show Cheap quotes often the quotes given have both a large Voluntary and a large Compulsory Excess. I have seen quotes where Excesses may add up to several hundreds of pounds. Once you reduce the excess and include the Additional cover the quotes are often no longer competitive. Beware !!!!!

I have mostly used the Which? comparison sites and they have been OK. Beware though of giving out your phone number, as you will be pursued by sellers. Also, car insurance sites do not allow for insuring 2 cars at once, and you will have to follow that up separately if you could get a multi-car discount.

I have tried them in the past but have never purchased through them. They provide a rough price range that I then used to find my own deal. The lowest prices quoted often came from companies I’d never heard of. With insurance I also want to know the company has a good reputation should I need to claim.

I seldom watch ads anyway as I record most TV programmes that I want to watch. Have to say I do try to watch new Meerkats ads. But just the once!

I don’t trust the comparesion sites, because some of them, probably most of them give peoples details to other organisations. Also recently I used few of the sites to compare the car insurance prices. Afterwards I visited the insurance companies websites and phoned them. One that recommended by which? was much cheaper than the comparesion sites, so I bought it directly.