Price comparison sites How price comparison sites work

Price comparison sites - meerkats

Price comparison sites such as Comparethemarket.com advertise on TV 

Price comparison sites are designed to do just what their name implies: compare the price of goods and services from a range of providers, allowing the consumer to make an informed decision about which to choose in order to save money.

What are comparison sites?

Price comparison sites exist for a whole host of consumer items, but the most well-known tend to specialise in financial products such as insurance, credit cards, personal loans and gas and electricity tariffs. Websites including Moneysupermarket.com, Comparethemarket.com, Confused.com and Gocompare.com advertise extensively online and on television, and all offer users a similar range of services. 

The appeal of comparison websites that specialise in products such as car, home and travel insurance is that they allow consumers to get quotes from a variety of insurance firms in a single stroke - thus avoiding the need to fill in multiple sets of forms and make enquiries about what's on offer from the market's vast array of insurers. 

However, Which? research shows that using price comparison websites isn't always straightforward - and that consumers are more satisfied with the service on offer from some than they are with others (see our Best and worst price comparison sites page for more information). 

You can read more about the potential pitfalls of comparison sites, and how to use them effectively, on the Top tips for using price comparison websites page of this guide.

Using a price comparison website: the basics

Price comparison sites generally allow users to search for the products that might suit them via simple 'best buy' tables, or using quotation tools that require consumers to enter their preferences and some personal details before information about products can be revealed. 

Personal loans and credit cards, for example, can be quickly compared on screen - but the comparison of products such as car, home and travel insurance, which will be priced in accordance with individuals' circumstances, will call for consumers to fill in online forms about themselves and their needs.

When you're hunting on a comparison site for car insurance quotes, for instance, you should expect to be asked for information including your age, address and occupation - all of which can affect the cost of cover - before any results can be returned. 

Typically, it might take just 10-15 minutes to supply a price comparison website with the information necessary for it to supply you with dozens of quotations for financial products.

Don't rely on a single price comparison site

However, it is vital to be aware that no two price comparison websites are likely to yield exactly the same results - even if you provide them with identical information. This is because they may provide quotations from different financial product providers and insurers, depending on which companies they have access to. 

Price comparison websites tend not to have a 'whole of market' focus, which means most sites will miss out some possible deals when providing you with quotations. 

For this reason, Which? Money experts would always advise against using a single price comparison site when trying to track down the best price you can find for a product such as insurance. Tips for using price comparison sites successfully can be found further on in this guide. 

Likewise there are certain issues you might encounter when using price comparison sites, which it's important to be aware of up front. These can affect the level of cover you receive when buying insurance, the excess you are expected to pay and could see your email inbox clogged up with marketing messaged. You can find out about these potential problems, and how to avoid being stung, by reading our Top tips for using price comparison websites page.

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