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Comparison sites – cash loans, energy switches, home insurance – are they really giving us the best deal

April 21, 2015 by Financefox in Loans, Tips

Everyone has heard of a comparison site, and here in the UK, the number of comparison sites seems to be growing. Most people can cite one or two of the biggest comparison sites in the UK. Of course, our TV adverts are full of the likes of go compare, and confused.com, who all want us to head over to their websites for our next big financial service.

And it is clear to see why they have been so popular. With quick and easy submission forms, we can insert all our details and receive a comprehensive list of products and companies that we could take our custom to. From there, we can choose a financial product that is the cheapest or most apt, and potentially save hundreds of pounds.

But is it all it’s cracked up to be? Some think not. According to the latest reports, Despite Ofgem’s efforts, switching rates in the UK have been on the decline because the whole process is just too complicated.  A report by the CentreForum think-tank, compiled for comparethemarket.com, says that bills are presented in a way that is too complex and tariff descriptions were “buried in cryptic terminology, making like-for-like comparisons extremely difficult”. This is especially the case for energy suppliers but can also be seen in the areas of cash loans and insurance products.

Choosing a cash loan on a comparison site

Take the example of the cash loan. Wonga is the brand dominator in the industry across the globe from the UK to South Africa, and you could head straight over to their site to choose your loan product and apply. You would know what you are getting, but are you getting the best deal? Consumers have been urged to use a comparison site, where you could enter your details and see a whole list of other cash loan providers. Wonga.com may appear on the list next to competitors such as sunny loans or mobile quid. You would be able to see their rates side by side and decide on the best course for you.

But, experts warn you might not be getting the best deal after all. These comparison sites also make a lot of money in commission from the energy, loan and insurance companies that list products. Therefore the price they quote you on their comparison website includes a payment that will go to that company, rather than the initial price quoted by the company offering that financial product.

Mixing your methods

What is the answer here? Well, consumers may want to do a bit of both. Entering your details into a comparison site doesn’t commit you to anything, and you can simply see what’s on offer before making a decision. You can then visit some of your top pick companies directly and see if you can strike up a better deal. Try calling companies too – sometimes you can haggle a better deal in person rather than through a website.