Internet comparison websites have become incredibly popular over the last decade. The man who set up the first one from scratch back in the late 90s is now a multi-millionaire, but where does all the money come from? Comparison websites make their money from advertising and from commissions from insurance companies. Unfortunately, both of these make a difference to the quality of the product that you receive at the end of the buying process. Advertising money – often from insurance companies – can mean that they prejudicially favour one company over another, whilst the commission means that when it comes down to it, you’re likely to be paying more than you have to. Insurance companies pay the websites commission for every product sold, but they are unlikely to ever pay this entirely out of their own pocket, for that reason when it comes to buying a product through a comparison website you may find that you are paying slightly more for the same product. That slight bit extra is the comparison website making its money. The Financial Services Authority last year announced that not all comparison websites were accurate, although many were, and that they didn’t always provide the best deal. So how do you get the best deal? Internet comparison websites should not be ignored altogether, they are a valuable tool and can still save you considerable time and effort. One of the most important things when buying insurance is that you know what you are looking for, and more importantly you know how much you should be paying. Comparison websites are great for giving you a ball park figure. From there you should approach insurers directly, either through their websites or preferably by phone, and just as you would when haggling for a new phone, try and barter down the cost of your insurance. Companies will not want to lose your custom and if you have a low benchmark to argue with, they will probably try their best to make sure that they get under it. Be aware that it’s just as important as ever to have the right level of cover, so don’t make unnecessary compromises. Comparison websites can be good, but they shouldn’t be the be all and end all, at the end of the day, there’s no substitute for doing the legwork yourself.
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Internet comparison websites have become incredibly popular over the last decade. The man who set up the first one from scratch back in the late 90s is now a multi-millionaire, but where does all the money come from?
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