Getting a great deal
Price comparison sites explained
By Joe Elvin
Article 1 of 3
Price comparison sites explained
Find out how price comparison sites work, and how to use them to get a great deal on a range of services.
Price comparison sites are designed to do just what their name implies: compare the price of goods and services from a range of providers.
This allows you to make an informed decision about which provider to choose in order to save money.
What are price 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.
The appeal of comparison websites that specialise in products such as car, home and travel insurance is that they allow you to get quotes from a variety of insurance firms in a single stroke. This means you can avoid 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.
The Which? comparison website, Money Compare, lets you search hundreds of deals from providers large and small in the credit card, mortgage and savings markets, helping you choose a great deal based on the quality of service, as well as cost and benefits.
Find out more: Which? Money Compare - hundreds of deals compared
Using a price comparison website: the basics
Price comparison sites generally allow you to search for the products that might suit you via simple 'best buy' tables, or using quotation tools that require you to enter your 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 you to fill in online forms about yourselves and your 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 give you dozens of quotations for financial products.
However, Which? research shows that using a price comparison website isn't always straightforward.
Find out more: how to use price comparison sites effectively - our top tips
Don't rely on a single site
It's 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, we 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.
Likewise, there are certain issues you might encounter when using price comparison sites, which it's important to be aware of upfront. These can affect the level of cover you receive when buying insurance and the excess you are expected to pay, and could see your email inbox clogged up with marketing messages.
Find out more: price comparison site pitfalls - flaws to be aware of
- Last updated: March 2016
- Updated by: Joe Elvin