A popular way to shop for a financial services product is via price comparison websites, which appear to aggregate all the necessary information in one place. However, an investigation by consumer body Which? found that these sites are not always giving people the right or correct price.
The findings show that some sites automatically pre-select some options in their online forms, which can make quotes appear cheaper, but can also lead to basic 'one size fits all' policies that could be unsuitable for individual needs or even prove invalid in the event of a claim.
Price comparison sites also give the impression that there is no need to go anywhere else for the best deal. Which? found that, for example, none of the 11 most popular comparison sites covered more than a third of the market for home or travel insurance.
The majority of these sites are advertiser-driven and therefore list the products and services of those institutions that pay to advertise with the site, instead of the best offers on the market. Some price comparison websites also do not make clear that they earn their money from commissions through leads fed through to the providers that subscribe to them.
"Price comparison sites claim to do all the work for you, but our research found that if you want to get the best deal you still need to shop around or it could cost you hundreds of pounds," says Richard Lloyd, executive director of Which?. "Going to the provider directly may also give you a better quote."
You should still shop around, but Mr Lloyd suggests that when you use a comparison site you check all questions to make sure there are not any pre-selected answers. You should also double check all the details to make sure you're getting the product you need.
You could also compare quotes from companies directly, use more than one price comparison site because not all providers are listed on each one and watch for unwanted extras because the comparison site may have pre-selected what you don't need.
