In these days of rising prices, more and more consumers are realizing the benefits of shopping around. Rather than accepting the first price they see, the savvy spender will take some time out to compare the product they want to buy, in the hope of saving some money.
Price comparison sites have seen a surge in popularity because of this consumer behavior, and there are now over 100 such sites from the UK alone, covering everything from balance transfer credit cards to the latest mobile phone or broadband package. The designs and formats vary, but their aim is the same; to find their customer the lowest price on the item or service they look for.
Some comparison sites have recently launched mobile phone applications which enable users to compare prices while on the move. If you have an iPhone, you can use a application with geo-targeting to find coupons, cut-price deals and other offers in the stores surrounding you. Keyword searches mean that if you’re out shopping for a new pair of boots, you can enter that as a search term and the app will bring up a list of retailers currently running discount offers on footwear.
Comparison sites collect their information in a number of different ways. Some use data aggregators to pull up-to-date figures from provider’s or retailer’s websites, and change the information on the results pages dynamically. Others receive the information directly from the provider or retailer, and still others manually search for current prices themselves without needing to contact the seller. This technique works best for smaller sites which cover just a few topics.
Price comparison sites are, in the UK at least, primarily used for comparing car insurance packages. Some consumers will use at least two or three comparison sites before settling on a quote, others will loyally stay with the same site for all their needs. Because most comparison sites cover one or two particular areas, either financial products or shopping, a customer will often use one for finding car insurance, for example, and another when they need a new computer or washing machine.
But how can a price comparison site actually help you save money? The trick is to give it as much information as you can so you can be sure that the results are as accurate as possible. If you’re looking for a new utility supplier, have a few of your recent bills to hand, so you can enter exact consumption rather than estimates. For car insurance comparisons, be honest about what your car’s worth, how often you use it, and any other details you’re asked for. This way, the results you end up with will be tailored as accurately as possible to your needs.
Not all comparisons work in this way. Some, such as credit cards or computers, will often feature a list of products which can be filtered according to what the user selects. For example, if you’re looking for a laptop costing under £500, which comes with a processor speed of 2.6GHz or more, then you can alter the results to show just the laptops which have those criteria. By narrowing down the search results like this, you won’t waste time looking through a list of products which don’t suit your needs.
Here’s a few areas in which you could potentially save money if you use a price comparison site:
• Insurance – car, house, pet and life insurance amongst others
• Credit cards – you can find which cards offer a better interest rate than the one you currently have; useful if you’re looking to transfer an existing balance to a lower rate.
• Utilities – by entering your current supplier details and postcode, the site will be able to see which suppliers in your area have lower unit prices or better tariffs for your usage level.
• Holidays – comparing different packages from various tour operators could save you quite a lot of money, and if you’ve not decided on a destination, they can help you find somewhere cheap, even at last minute.
• Shopping – you can compare just about any item online, and see which are the cheapest retailers for that item. Usually you can then click straight through to the retailer’s website and buy the product quickly, without having to search through the site to find it.
• Other financial products – Mortgages, loans, bank accounts and savings accounts can all be found. Often it’s a case of looking for which product carries the lowest interest rate for your needs, and a comparison site saves you having to look at multiple websites from individual providers.
Louise Tillotson is a writer for Moneysupermarket, a price comparison site in the UK. She regularly writes for other websites, on topics ranging from personal finance to computer gadgets. In her spare time, she enjoys building websites and days out with husband and daughter.