How To Use Comparison Sites Effectively
If you are looking for loans, insurance or energy suppliers, comparison websites are one of the first port of calls for many UK consumers. There are several advantages of using a comparison website including a potential discount for savvy shoppers and the opportunity to see rates from several providers in one place, rather than being limited to one company’s products and fees.
Well-known comparison websites include:
- Go Compare
- Money Supermarket
- Money Saving Expert
- Compare The Market
- Loans Warehouse
However, since comparison sites are profit seeking firms, our tips are designed to help you use them effectively so you can get the best quality product and save money.
Beware how comparison sites make their money
Websites that compare products will typically make their income by
- Cost per clicks
- Paid positions
- Sponsored listings
The cost-per-click means that the website will receive a commission every time a customer clicks on a listing. With higher commissions reserved for higher positions on the table, once clicked, the user is usually taken through to the provider’s website.
Paid positions refer to an advertiser being given a fixed position on the table in exchange for a fee. Sponsorship listings refer to when companies are clearly featured in an advertising section and this is not usually based on quality.
The reality is that the position of every lender or provider may be commercially driven and placed for a specific reason. For consumers, they need to be aware that the first on the list is not necessarily the best and therefore they should review the full list of suppliers before choosing which to click on.
Realistically, comparison websites are only going to work with companies where they will make money, so its not like you get to compare every product that is really out there, only the best of the companies that they worth – there is still merit to it but it doesn’t mean that it is all the products actually out there.
The cheapest is not always the best
The results you receive will either be in the form of a comparison table or filtered down after you have entered some basic details. It is important to use the filters or columns to compare the rates, loan term and representative examples – but the cheapest option may not always be the best.
It is also important to look at things like reviews (if available), the brand reputation and the quality of the website when you click through. The cheapest option may be a totally unknown provider and therefore a greater risk to lend from or use for your insurance. If you ever feel uncomfortable about applying with the lender or insurer, you can always check the FCA register to see that they are authorized to provide such products.
Similarly, a generic broker form could send your details to several companies and cause you to be bombarded with information. Hence, checking the FCA register, any reviews on the likes of Trustpilot or Feefo is important to confirm that they are a real and legitimate company.
Check multiple comparison sites if you need to
Comparison websites will only tend to show a few suppliers or those that they have commercial arrangements with. But if you are unsure or would like to see more offers, you can look at multiple comparison sites to get access to different rates and providers. Doing extra research may help you get more educated on the market and ultimately save money in the long-term.
You may receive special rates by applying with a specific comparison site, which emphasizes why it can be worthwhile looking at multiple sites, specifically for things like car insurance. Whether it is a free toy for the kids, cashback, 0% finance or introductory bonus, some providers offer these benefits as an incentive for customers and they are only available on comparisons.
Careful about entering information
For some comparison sites, you will be asked to fill in information so that they can find you the best offer. Customers should be aware that if they are required to give their bank details, there may be upfront fees involved or they may run a credit check. Be sure to look at the small print because a soft credit search is typical for a quotation but if it is a hard search and the individual accumulates several of them, it may affect their credit score. (Source: Experian)
Also, be wary of any pre-ticked boxes and pre-set filters as these may influence you towards applying for a specific product. Specifically, in the case of marketing opt-ins, you must check whether ticking the box or unticking it will lead to receiving third party emails and messages. Sometimes the wording can be confusing such as ‘untick this box if you do not wish to stay informed’ – so make sure that you read it carefully. (Source: MoneyAdviceService)
Cross-check the terms on the comparison
When you click through to the supplier, it is important to cross-check the terms that you are receiving. Although most financial products are displayed as a ‘representative APR’ and the rates shown will only be available to 51% of consumers, you want to make sure that you are getting a rate or offer that you have been promised e.g cashback, free toy or discount. For more information, read our guide on APR.
You want to be aware of any add-ons and how this may affect the price. Especially in the insurance industry, you may be quoted a low rate but find out later on that it does not include any features or requires you to pay a high voluntary excess.
Don’t forget how many millions of people were mis-sold PPI all those years ago which emphasizes the need to check all the terms and what you are actually paying for.
About our site
At GuarantorLoans.com, we are a free service allowing you to compare guarantor loans. We are pleased to be working with a select number of guarantor lenders in the UK which have been handpicked due to their status with the Financial Conduct Authority and commitment to responsible lending. We also only recommend direct lenders and do not charge any fees for applying.