When looking for services and products like mobile phones, insurance or short term loans, your first port of call is usually a comparison website, especially since there are so many and they advertise heavily on TV and radio.
Using comparison websites can be a positive experience when shopping around, and you can reap the benefits of doing so; like potential discounts on certain products, free tickets and usually seeing the rates and terms from several providers clearly all in one place – rather than having to review each company one by one.
However, because comparison websites are profit seeking organisations, we have put together some tips to help you use their websites effectively, help you save money and get the best quality product to suit your needs.
Be aware of how comparison websites make money
Most comparison websites are commercially driven and certain products or polices may be strategically placed for a specific reason. For you as the consumer, you need to be aware that the first on the list is not necessarily the best. Therefore, make sure you review the full list of suppliers, including their terms, before choosing which to click on.
Income from comparison websites usually comes in the form of:
- Cost per click
This means that the comparison website receives commission from the supplier each time a customer clicks through to the supplier’s website.
- Sponsored listings
These listings refer to when companies are featured clearly in an advertising section, sometimes demonstrated by a tab saying ‘featured,’ ‘sponsored’ or highlighted in a different colour tab. Be wary of this as it is not always based on the quality of the product or policy.
- Paid positions
Paid positions refer to an advertiser receiving a fixed position on the table in exchange for agreed fee.
The cheapest is not always the best option
When you search for results they will usually come up in the form of a comparison table, or filtered down after you have input some basic details or requirements. It is very important that you make full use of the filters and columns specific to your circumstances to compare the rates, loan terms and representative examples.
Try and seek out reviews of the brand reputation and quality of the product when you click through, if they are available. The cheapest option available may be an unknown provider, and therefore a greater risk to lend from or use for insurance. As an extra precaution for financial providers, you can check the FCA register to see if they are authorised and have the required permission to offer the relevant products.
Be careful with the details you enter
A lot of comparison websites ask you to enter details and information so that they can filter the results to best fit your requirements. If you are asked for your bank details, be aware that this might mean there are upfront fees such as an application fee or they may be waiting to run a credit check. Always be sure to check the small print; a soft search is typical for a quotation but a hard search may affect your credit score.
Also, please be aware of any pre-ticked boxes and pre-set filters as these may have an influence towards you applying to a specific product. Read the print carefully to see whether you are agreeing or disagreeing to marketing opt-ins, by ticking or unticking a box. Sometimes the wording can be confusing such as ‘untick this box if you do not wish to stay informed’, so read everything carefully to ensure you don’t get marketing emails and phone calls you do not want.
Check more than one comparison website
Educating yourself in the market can ultimately save you money in the long-term. It is advised that you do not click on the first result on your internet search but also scroll down and see which other companies are available.
Typically, comparison websites will only show you a few suppliers, or more notably, those who they have commercial agreements with. To get the best, most effective and biggest variety of results, check other comparisons websites to see more offers from a variety of different rates and providers.
You may get special rates by applying to specific comparison sites, emphasizing why it is worthwhile looking at multiple sites. Whether it is cashback, free tickets, a toy for the kids, 0% finance or introductory bonus, some providers offer these benefits as an incentive for customers and they are only available on their own comparisons.
If available, check the reviews of each of the comparison websites to get a feel for customer satisfaction for each company. Consider looking at Trustpilot and Reviews.co.uk to see what other customers are saying.
Once you have clicked through to the supplier, it is important to cross-check the terms that you are receiving without just relying on what you have been told on the comparison website. Most products of a financial nature display a ‘representative APR’ and the rates displayed should be the rates available to 51% of consumers. Although this is the case, you need to make sure you are getting the offer or rate that you have been promised; for example, the free gifts, cashback or discount.
Similarly, be aware of any add-ons and how they might affect the cost. You may be quoted a low rate, but later find that the rates are only available for those with good credit or, in the case of insurance, require a high payment in voluntary excess.
To round up, comparison websites provide an easy and convenient service to help when shopping around. However, sometimes they are not free to use with some asking for upfront fees, feature paid advertising, sponsored listings or paid positions. Remember the sites only show you prices and not necessarily the best product so always check more than one comparison website and understand how they make their money.
We hope that this guide has helped you to understand comparison sites more effectively, including how they work behind the scenes and what to be aware of.