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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
Lucille says:
30 March 2012

Like the previous post – it can be useful to get ‘ball park’ figures from the comparision figures but I recommend that you then contact the companies directly – I got a cheaper quote on the site than my renewal quote and then got an even cheaper quote than on the comparison site by going to the insurance sites directly.

Tim S says:
30 March 2012

They don’t compare the market, they only compare the companies which agree to pay them royalties.

Once they get your e-mail address you get bombarded with mail for other products.

john mccolgan says:
30 March 2012

*** CAVET *** Comparison websites will give you 2 e-diseases, 1. SPAM and 2.TELEPHONE SALES CALLS, Here’s how to avoid:- 1. Always Always Always use a disposable email addy (a hotmail one or similar) 2. NEVER EVER EVER give out your home landline number EVER, if the enquiry form insists on your home number then move onto another website (if you must). If you feel the need to give a telephone number then use your mobile number, at least you can change the sim card if the sales calls swamp you. Oh and I also HATE the GoCompare adverts

Aanthar Taventheran says:
30 March 2012

Comparison sites are only as clever as the person using it. I find that you can use it to your advantage by comparing the results with your own investigation.

Like many others I was “lured” into insurance through these websites and foolishly decided to put my eggs in one basket and combine motor and home with the same company. BIG mistake! I was unfortunate enough to have my first motor accident in over 30 years on Nov 2nd ’11 by a lady wearing high heels, child in the back, on her way to a family funeral and at the scene apologised, blamed her brakes and the road and 5 months later it looks like it’s going to be settled as joint liability. Bang goes £300 excess and my no claims bonus which because of my driving record I didn’t protect! Moral of the story do your homework WITHOUT these sites and read Which for the best companies albeit you may pay a little more.

Bill says:
30 March 2012

The Which? statistic that only 14% of people do not trust the sites suggests that a high proportion do. This is borne out by my experience as a Utility Warehouse distributor. I often talk with people who tell me that they have used a price comparison site to switch energy provider. Most are amazed to be told that these sites are commission driven and do not find the best deal.

Jimbo says:
30 March 2012

I found your article was pretty rubbish and and some of the Comments made me think that the people writing them had never actually used any comparison sites. Yes, I agree that you have to be careful but the same is true for anything you buy on the web. All the sites I have used show the voluntary and compulsory excesses on the header page and also which main items are included (usually by simple tick boxes). Providing you fill out the application correctly, for instance specifying that you want protected NCD, that will be included. As for “accidentally” missing out important information that may effect future claims, such as Offences or Claims, how difficult is it to answer simple yes/no questions such as “Have you had any accidents/convictions in the last 3/5 years?” Answering “Yes” will automatically bring up a further section asking for relevant information. The list of quotes can be listed by price, total excess, etc. etc. and they usually also show the total price both for one of and monthly payments (the cheapest Company for a one of price may not be the cheapest if the cost is spread over 12 months, as they all charge different rates for credit). You then have the choice of just picking the cheapest, or finding the cheapest “Big Name” provider, or finding the cheapest with the level of excess you want, etc. etc. or if you do a bit more research you may find that some of the Providers that you have never heard of are actually the on line only wing of some of the really big names. It is of course imperative that you click the further information button and check that the policy covers everything you want before buying, but you need to do this no matter how you are buying. If you really want to know how to do it, get yourself on the list to receive the free weekly “Martin’s Money” email, which tells you which sites to use and in which order to use them to make sure you get the greatest coverage of available providers and also lists providers who are not on any comparison sites, particularly if they have current special offers on, (12 months for the price of 10, etc.). You can then go direct to your chosen provider to check the price if you want, but I have never found any variation more than a couple of pounds if any at all. As a bonus, once the comparison site has your details, they will email you again in 12 months when your renewal is due again, with quotes based on the information provided updated by 12 months. If there are any changes, for instance you have changed your car, it is very simple to go back in and just change the relevant information, without having to re-enter all your other details. With Insurance Providers trying to rip us off with 40% (and plus) increases every year, comparison sites are one of the easiest ways to fight back and keep your costs down! Hope this helps someone.

Nanook of the North says:
30 March 2012

Searched for home insurance. Input my cover requirements and got some really cheap quotes. Only when you go to the insurers web site do you find out that the policy wording limits cover value, effectively disregarding the original search criteria. So search for £50k of contents cover and end up with a policy that limits contents to £25k.

What a waste of time!

Unless you are looking for bargain basement, minimal cover, go through a reputable broker.

Rob says:
31 March 2012

You can’t trust a computer to give a valid comparison. Not even the Which site helps, I switched electricity supplier through the Which site over a year ago, and there was no end of problems: I didn’t get the tariff advertised, nor the bonus for switching, they can’t read a meter. It has put me off switching, if even Which can not get it right. Why can’t they give a clear comparison of prices and conditions, rather than the complicated switching sites?

Lisa says:
31 March 2012

Re Motor Insurance : We found that the data you input isnt always carried through to the policy – we rang for the best online quote and they knew nothing about a motoring conviction which we definitely entered.
Also the excess page asks what you want but doesnt tell you the compulsory first, so you have to get to the end, work out the difference then go back and change the voluntary bit.

my advicse is use the site as research but dont click through to buy it – phone the one you want and check they have all the correct info. sometimes they will check it for you then tell you to go back online to get the discounted price!

Alan Catt says:
31 March 2012

I have been using these for many years, and find them very valuable, those of us old enough to remember life before computers will know how we used to get ripped off by insuarnce companies unless you were prepared to make several lengthy phone calls.
Of course you need to take care, and use more than one site. However, the old saying of “buyer beware” applies just as much now as it did in the pre-computer age. You are entering into a contarct when you take out an insurance policy, so it is your responsibility to check what you are buying.
The comparison site has NO resposibility to do this for you. It is simply doing what you ask it to do.

GARBAGE IN, GARBAGE OUT !!!!

Bruce says:
31 March 2012

Which? needs to declare its interest here as you are evidently in competition with the price comparison sites. Your review seems to me to be peculiarly one-sided as anyone who has bought car insurance through a broker will know that on renewal the quote offered is almost invariably with the same insurance company and is not as cheap as several available from reputable brands on the Price Comparison sites. The suggestion that it is a failing of the Comparison sites if you do not declare your convictions and therefore get the wrong quote back beggars belief.

Ian says:
31 March 2012

Have used comparison sites to check renewal quotes against other companies – car and house insurance and electricity. In all cases found cheaper companies providing as good or better service. Needed to read the small print carefully as details sometimes appeared to ‘change’ from those I thought I had entered! However, having got online quotes, I then phoned the companies directly and received the service at the price comparison price, and occasionally got extra benefits (free roadside recovery with car insurance) if I purchased over the phone.

I find them very time consuming and as already mentioned not entirely accurate. There are so many to choose from that you can spend ages just filling them in to compare the different websites. I often wonder if some pay to be at the top of the list!! Also not all insurers are on the comparrison websites so you can’t get an accurate result, the ones which are on the you’ve never heard off!

onying says:
2 April 2012

I think all the points I have are well covered in previous comments, but I will add that I will not use a comparison site offer but always go directly to the firm itself before making my decision, although the cmparison site is useful in pointing me in the right direction.

MB says:
2 April 2012

Moneysupermarket.com saved me nearly £100 on my car insurance, by changing from Aviva to Quote me happy.com. Yippee. Quote me happy.com is owned by Aviva but operate on-line only. You can always ‘un-subscribe’ from the e-mails sent afterwards.

Keep Trying says:
2 April 2012

I have wasted a lot of time on price comparison sites for car and home insurance and “get you home” insurance too, and not yet found one that, when all the extras have been sorted out, produced a better rate than my present supplier.
However, I have found interest rate comparisons worthwhile for a lump sum investment, particularly http://www.money.co.uk because it compares more products – perhaps including ones that don’t pay it a commission. It does try to redirect you to a favoured site, but it puts up a note “click here to visit the … site”. Worth a visit if you want the best rate available.

A Wright says:
2 April 2012

I have used comparison websites successfully for the last 3 years, and see them as a great tool. I managed to save a staggering £400 on my house and contents insurance (That’s what happens if you stick with one company for 28 years – they just up the price each year.)

I have saved over £150 on our car insurance premiums too and where I havent wanted to change insurers, I have used the quotes from the websites to renegotiate our car insurance renewal quotes – always with good savings.

You need to do your homework first, and keep your wits about you, and be perfectly clear what elements of cover you really want to have before you start though..

I used one of these sites after being made redundant and losing my company car. Fortunately I found a job pretty quickly but it meant I was unable to spend enough time trying to sort out the insurance for my new car through my usual channels as I was out of the house at 7am and not back until 7.30 (some lines are 8am to 8pm) and it would not have been appropriate to be using company time.

I eventually went with a very well known insurer through the comparison site who subsequently refused to accept the letter from my previous employer confirming my exceptional driving record as proof of no claims – even though it quoted the insurer and policy details. I also have a clean licence.

They took over a week to decide this and inform me by e-mail. When they returned my money they had deducted 10 days insurance at their FULL premium – not at the policy rate we had agreed. As I had no valid insurance my new employer was kind enough to allow me an extension to my half hour lunch break to sort it out and an insurer I had used previously gave me a decent quote, though I’m not sure it was the lowest/best on the market.

I think the rate at which subsequent refusals are charged needs to be looked into and customers need to be aware that if it is subsequently refused, it could leave them in a tight situation.

Caitlin says:
4 April 2012

My Son recently used a loan comparison site and applied to Marks & Spencer for a loan with a quoted interest rate of 6%. He completed the online application and was accepted. When the paperwork arrived for signature the rate was stated at 9%. He telephoned M&S but could not obtain a satisfactory explanation as to why it had increased. It was a complete waste of time and very frustrating. It would be interesting to know how many others this has happened to.