Price comparison websites are a great way to compare offers in the market, giving you the opportunity to get quotes from multiple providers at the touch of a button. Whether you’re looking for the best deals on anything from utilities to insurance, credit cards, personal loans, broadband or mortgages, you could find yourself making substantial savings.
But does a great price on screen really add up in the long run? And are there any hidden costs you should be aware of? We take a look.
How do price comparison sites work?
Price comparison sites allow you to get quotes from multiple suppliers at once, saving you hours trawling through separate websites or contacting them directly. Not only do they enable you to find the most cost-effective products or services for your needs, the ease of comparison is also forcing brands to be more competitive - further benefiting our wallets.
All you need to do is enter your requirements and see what’s available or have quotes sent directly to your inbox. Often, you can purchase through the site as well. It’s a quick and easy way of shopping for deals in the market. According to the CMA (Competitions and Markets Authority), 90% of consumers are very or fairly satisfied with them.
Price comparison sites can be a win-win for consumers – but only if you know what you’re doing.
Are all price comparison sites the same?
The short answer is no. Many consumers aren’t aware some price comparison sites make their money from the brands that appear in search results. This means the options displayed may favour companies from which the site will receive commission - should you choose their product - rather than the best offers in market.
In addition, many sites don’t show all the options in the market, different sites will show different results, and some brands choose not to appear on any price comparison sites at all. So it’s important to shop around: compare the results from several sites and get in touch with any reputable brands you’re not seeing in the lists.
Which products should you search for on price comparison sites?
Perhaps you’re thinking about switching utility providers, looking for a good deal on purchase or balance transfer credit cards, or wanting to renew your car, home, travel, or contents insurance. Price comparison sites can be used for a wide range of financial products, offering substantial savings.
However, according to the CMA, the chance of finding a good deal depends on what you’re after: they work out best if you're looking for car insurance, and worst if you're looking for broadband.
Tips to selecting the best product for your needs
- Check the search filters. Some sites auto-tick search boxes to show you the cheapest options available. However, these might not suit your needs – or even rise in price substantially once you’ve added on any necessary extras.
- How long is your contract? If you’re getting insurance or switching utility providers, make sure you know when your chosen deal finishes. Insurance policies may be set to automatically renew – and this could be at a higher premium. Utility plans may revert to the most expensive plan at the end of an agreed period.
- What is your level of cover? If you’re searching for insurance, a cheap deal might look good at first, but does it provide all the cover you need? Also, make sure you check the excess – this isn’t always obvious. Compare it with other options before making a choice.
- Additional fees and hidden costs. Are there any early exit fees or charges for changes to your details? For example, if you move house or want to add another person’s name onto a policy.
- Beware the free add-ons. Don’t let your opinion of a product or service be swayed by free add-ons, particularly things you didn’t need in the first place.
- Read the reviews. This is particularly important if customer service is important to you. Smaller providers may offer more cost-effective options but sometimes this is at the expense of speedy customer service, so make sure you check out reviews online.
Price comparison sites are a great way to get quotes on a wide range of products and services. Just make sure you do your research and you could be rewarded with substantial savings on your household budget.