Price comparison sites are a booming business. And judging by their expensive (but annoying) advertising campaigns they’re fighting tooth and nail for your custom. But will they give you the best deal? And could you save money buying via cashback sites such as Quidco and Topcashback?.
I’ve taken a look at a range of popular products and services to find out (all quotes obtained on 4 August 2010, Quidco used as an example for typical cashback):
Car Insurance
Moneysupermarket came up with the lowest quotes by some margin, while Direct Line (which has a policy of not featuring on comparison sites) was significantly more expensive. Interestingly, esure was a lot more expensive when trying to buy directly, even with a £45 cashback, than the same policy via a price comparison site.
Adding an extra driver to your policy can be a nifty way to reduce your premium, as our sample quotes show. I guess some insurers view this as lowering risk – it’s always worth a try. I routinely add a relative my policy, as well as lowering my premium it gives them an extra car to drive.
| Website | Insurer | Best Quote single driver (annual) | Best Quote extra driver (annual) | Cashback via Quidco |
|---|---|---|---|---|
| Moneysupermarket | esure | £455 | £402 | n/a |
| GoCompare | esure | £496 | £468 | £1.50 |
| Compare the Market | esure | £503 | £427 | 50p |
| Confused | esure | £508 | £468 | 50p |
| esure | £581 | n/a | £45 | |
| Direct Line | £892 | £977 | n/a | |
| Quotes obtained for a 40 year old male living in NW1 on a 2007 Saab 9-3. 5 years protected no claims, social use only, £250 voluntary excess. Extra driver is a 60 year old female. | ||||
Verdict
Based on this example it seems that price comparison sites do come up with competitive car insurance quotes, some more so than others. If you have time it’s still worth checking against some direct insurers, but on the whole you can be fairly confident of getting a reasonable deal.
Life Insurance
Moneysupermarket again came up with the cheapest quote. Confused also delivered a good quote when taking into account the potential £52.50 cashback, although it’ll still cost more than Moneysupermarket over the 20 year term assumed.
LV= provides decent cashback via Quidco but higher quotes when trying to buy direct compared to via comparison sites and brokers – a poor overall deal. And discount broker Moneyworld-IFA was cheaper than the comparison sites except for Moneysupermarket.
None of the price comparison sites makes it clear that for many people it makes sense to write life insurance benefits into a simple trust (to avoid the payout becoming part of your estate for inheritance tax purposes should you die).
| Website | Insurer | Best Quote (Monthly) | Cashback via Quidco |
|---|---|---|---|
| Moneysupermarket | Aviva (via theidol.com) | £5.00 | n/a |
| Moneyworld-IFA | LV= | £5.21 | n/a |
| Confused | Aviva | £5.44 | £52.50 |
| Compare the Market | Aviva | £5.37 | n/a |
| GoCompare | Aviva | £5.40 | n/a |
| LV= | £6.39 | £53.00 | |
| Quotes obtained for a 30 year old non-smoking male for £100,000 of level term assurance cover over 20 years. | |||
Verdict
With the exception of Moneysupermarket, the comparison sites were not as competitive as a good discount broker.
Home Insurance
The price comparison sites produced similar quotes except for Confused, which I suspect interpreted my input differently from the other sites – although the cover appeared to be the same.
Esure, a direct provider I’ve used in the past came up with a staggeringly high quote, even after £45 cashback.
| Website | Insurer | Best Quote (Annual) | Cashback via Quidco |
|---|---|---|---|
| Moneysupermarket | Ibuyeco | £74.59 | n/a |
| Compare the Market | Ibuyeco | £75.13 | 50p |
| Confused | ING Direct | £79.33 | £1.00 |
| GoCompare | Ibuyeco | £95.29 | £1.50 |
| Esure | £243.50 | £45.00 | |
| Quotes for £40,000 contents insurance (£1,000 away from property), 1 bedroom flat in NW1, no voluntary excess. | |||
Verdict
The price comparison sites appear to work well for home insurance, with not that much to choose between them.
Travel Insurance
Accurately comparing travel insurance quotes is very difficult, as levels of cover and excesses vary widely. The comparison below isn’t perfect, but gives a reasonable reflection on how the comparison sites stack up.
Moneysupermarket appears to beat the other comparison sites, but independent website EssentialTravel came up the cheapest when its generous 17% cashback is taken into account. One thing’s for sure, this is likely a far cheaper route than buying cover through a travel agent.
| Website | Insurer/Broker | Best Quote (Annual) | Cashback via Quidco |
|---|---|---|---|
| Essential Travel | £67.07 | 17% ( £11.40 on this quote ) | |
| Moneysupermarket | Top Dog | £61.50 | n/a |
| Compare the Market | Travel Insurance Club | £66.80 | n/a |
| Confused | Top Dog | £67.80 | n/a |
| GoCompare | A-Z Insurance | £78.16 | n/a |
| Annual worldwide multi-trip cover for a couple aged 40, including baggage and personal items cover, excess in the region of £50. | |||
Verdict
The comparison sites did ok and provide a convenient way to compare multiple policies, but you could bag a better deal going direct via a cashback site. Whichever policy you choose check the levels of cover very carefully to ensure they’re adequate and beware ‘bargain’ quotes that have a sky high excess.
Electricity/Gas
I tried a few price comparison sites and the suggested energy providers and plans that could save me money were identical. Based on this I’d suggest using a price comparison site to find a suitable energy supplier/price plan that will save you money and then buy via cashback website.
The going cashback rate appears to be around £20 for switching electricity or gas and £40 if you switch both. Far better you pocket this money than a price comparison site.
Verdict
The price comparison sites don’t appear to have special deals, so bag yourself some commission by switching policies via a cashback website.
Telephone/Broadband
Much the same story as electricity and gas. The comparison sites generally produced generic quotes that were the same as going direct to telephone and broadband providers. Far better to buy via a cashback website and pocket about £50 or more in commission.
Verdict
Buy via a cashback website.
Saving
The price comparison websites can help you find ‘best buy’ savings accounts. But be careful, they tend to display accounts that pay them commission more prominently over those that don’t, so you might have to dig to find the best deals. Cashback websites may offer one or two deals, but the cupboard tends to be rather bare when it comes to savings accounts.
Moneysupermarket has started to offer exclusive market-leading deals which could be worthwhile; they’re currently promoting a ‘best buy’ Bank of Baroda fixed rate savings bond.
Verdict
Ok at helping you find decent rates, but not as transparent as they could be.
Investment
Price comparison websites have largely avoided investments, which is just as well given the occasions I’ve seen them try (moneysupermarket and fairinvestment) it’s been implemented badly. They’ve either a linked a financial adviser or a random selection of potentially unsuitable investments that just happen to pay a decent commission to the comparison site.
Verdict
Investments don’t really suit the price comparison model – avoid.
Overall
Price comparison sites are money making machines that operate on two simple principals. They want as many people as possible to visit their website and get a quote (hence the annoying ads) and then as high as proportion as possible to subsequently buy something (which relies on competitive quotes and/or your laziness). Don’t ever forget they’re in business to take your money.
Nevertheless, when running the above examples price comparison sites generally performed better than I expected. They certainly don’t offer the best deals across the board and some comparison sites seem to offer consistently better deals than others, so it pays to be wary (and choosy). But used carefully they can offer a convenient way to cut the cost of insurance.
When it comes to utilities you’ll almost certainly do better by using a cashback website (using a comparison site to highlight the best deals).
Savers might find comparison sites useful for hunting down best buys, but price comparison sites currently serve no useful purpose or investors.
I’d be really interested to get your feedback below. What’s your experience of price comparison sites? Have you found better deals elsewhere? And, if so, where?
Read this article at http://www.candidmoney.com/articles/article135.aspx
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