In 2018 it was estimated that 11 million people used price comparison websites to help make their financial decisions. Reports state that they are most used for vehicle products, such as insurance, or home and contents insurance.
These tools could help us cut the costs of our annual and monthly bills and can be extremely useful when looking to make sure we get the best deal. As our purse strings might get tighter after an expensive Christmas and as Brits are supposedly bargain hunters, we could all be flocking to the best price comparison websites to check our deals, consider switching and looking to save money wherever possible. Here at Wizzcash, we are looking at how price comparison website should be used for maximum benefits and whether there are any negatives.
How Price Comparison Websites Work
Price comparison websites are like a search engine that provide the best deal for a certain product, for example, car insurance. There are price comparison websites for so many financial products, from everything from payday loans to energy tariffs and financial products for savings. They are so popular because they supposedly house all the best deals and what a customer is looking for, in one place.
Customers input data and the comparison tool will scour the available deals that are suitable. The amount of information you have to put in varies, as for car insurance, customers will need to detail their driving history, perhaps some medical background as well as car details and personal information. The tool will then produce quotes based on your specific . There are a few comparison websites, like Mustcompare.co.uk, that do not require you to enter your personal details in order to compare financial products.
It is always important for consumers to be aware that comparison websites are business models designed to make a profit, despite how much value they might provide to the consumer. 2018 reports suggest that the comparison market has become more competitive, which could be affecting their profits and consumers might want to be aware of any changes to the website they favour. One way they make money is by having advertisers appear on their website to drive through revenue. However, some consumer comparison websites also accept sponsored listings. This is where a certain provider pays the website to appear top of certain quote requests, despite not being the best deal for the customer.
A 2010 report also suggests that consumers are not aware of how much commission these services earn from their custom. A YouGov survey indicated that consumers were expecting to pay between 5 – 10%, but the real figure was much closer to 24% in commission. Since this report, regulators have had a tighter crackdown in the industry to help protect consumers and encourage transparency.
Are There Disadvantages To Even The Best Price Comparison Websites?
We know that around 11 million of us use price comparison websites but experts investigating this market state that there is still little clarification or transparency around how these websites make their money. In turn, there are a couple of concerns and things that consumers should be aware of when using these sites.
Not All Competitors Are Listed:
When consumers are shopping on a price comparison website, they may think they are getting the best possible deal. Yet, not all the providers within one market are necessarily listed on the one site they are using.
How They Help Us Make Our Decision
Consumers use price comparison websites to find the best deals. However, reports suggest that price has become the deciding factor for financial products, when it might not actually turn out to be the best option for their specific circumstance. A report in the Telegraph indicates that consumers do not check the specifics of the product they are comparing; from anything from trying to cut costs on your holidays to insurances. As we use these sites for ease and convenience, we do not then check the excess or details of the policies that could end up costing more as it is not tailored to an individual’s circumstances.
How Could You Make Price Comparison Websites Work For You?
The CMA (Competition and Markets Authority) recommend that customers use more than just one price comparison website as there could be miniscule cost differences in the policies available, which could save you hundreds in the fine print. We have already established that there are some providers that do not subscribe to these consumer websites, and it is worth checking these directly, too.
They help us make decisions because they seem to present all the information we need to feel informed. This could be just as dangerous as being uninformed. This is not accurate as there are better cost-savings to be had when consumers read the policy. For example, a free courtesy car when you experience a breakdown, included in your insurance package. Other, cheaper insurance policies might not include this, and a customer might pay so much more, but this is a risk-cost.
Here at Wizzcash, we encourage our customers to compare financial (and other products) before they commit to them. We believe in making responsible financial decisions that are going to benefit your in the future. Wizzcash are featured on several price comparison websites, as this one of the requirements set out by the CMA (competitions market authority) for payday loan companies. We are a compliant lender, happy to appear on these sites. You can check them out on our partners page.
We are a payday loan lender able to provide customers with emergency loans when they need it most, like in the instance when you need a courtesy car and do not have the money readily available because your insurance policy does not cover it. We do work to a strict lending criteria but you can find out more about how it works on our website.