We all know about comparison websites and how convenient they can be for services such as a taking out a loan, a mortgage or any type of insurance. If used correctly, you should be able to get the best deal on a loan or policy and there are sometimes exclusive offers or bonuses when you sign up.
Some of the things comparison websites can offer you are a range of benefits such as; discounts of certain products or memberships, free tickets, nectar points and just generally being able to clearly see the rates of various providers all in one place, saving you having to go through each individual company’s policies in your own time.
So important are price comparison websites, the FCA included a rule for high-cost lenders to be featured on at least one comparison website by law.
However, do keep in mind comparison websites are by nature, profit-seeking organisations and therefore there are a few things to watch out for when interacting with one.
Check out a few comparison websites
Before making any financial commitment, it is advisable to take a look at more than one comparison site to educate yourself about the market. Some comparison websites may only show preferred providers which they have commercial agreements set up with. For your benefit, it is best to check out a range of comparison sites in order to know what deals are available to you.
Be aware of how the comparison websites make their money
Moreover, any lender you come across is bound to be commercially driven. Due to this, it is more than likely that certain policies will be strategically placed for a commercial reason. Thus, understand that the first policy listed is not going to be the always best option for you. Annoyingly, you may need to look into the policies a bit more and check the full list before clicking through to a provider.
Income from comparison usually comes in the form of:
Cost per clicks
This is the commission that will be received by the comparison site each time a customer ends up clicking on a listing. In most cases, the higher commissions are reserved for higher positions on the table – so be aware of this.
Sponsored listings
You can expect companies to be featured in a section reserved for advertising. This is almost never based on the quality of the product or policy.
Paid positions
A fee is agreed upon and in exchange, a company will receive a fixed position on the comparison table.
Be careful with the details that you enter
Do not be alarmed if a comparison website asks you to enter your personal details. This is so that they can filter the results which come up so that they are best suited to your wants and needs.
However, do not fall into any traps. If at any point you are asked for your bank details, this may indicate that there is an up-front fee. Alternatively, they may simply want to run a credit check which can leave a mark on your credit search history – potentially impacting your credit score if they say they carry out a hard credit search.
Some other options are using companies like Money.co.uk where they simply list the providers they work with, allowing you to compare and making decision before clicking through to the website of your chosen company. This means that you do not risk giving away any personal details or them being forwarded to numerous partners and if fact, you have a lot more control.