Car Insurance Buyers Guide:
Compare or Direct
You cannot ignore the popularity of price comparison sites in the UK.
Over two-thirds of us use them to find car insurance and that figure is
increasing as car insurance
prices escalate even further. Indeed, most of us have decided to reduce our level of cover to
offset this rising cost.
The cheaper you go, of course, the less that you get and to allow price
to become the only important determinant of policy choice is risky, the
more so as car insurance companies pair down policies to compete on
price comparison sites while attempting to balance their books.
It's hard to argue that buying the cheapest of thousands of policies is
wise but it's what you do if you simply select the cheapest quote on a
price comparison site. People also overlook that the consumer is
entirely responsible for quality control when they use a price
comparison site. Unless you scrutinise the features of the policies
presented - something that is hard to impossible to do purely by using
a price comparison site without recourse to the insurer's own website -
you are likely to be buying with inadequate information for a properly
informed choice.
If you do conduct this policy features 'homework' - and it's unwise not
to do so - use of a price comparison site becomes less straight forward
as you dart back and forward to insurer's websites to see what you're
getting with each policy presented.
Thus, when used sensibly, the price comparison site, for those that
have a reasonable level of cover in mind, is not the efficient tool it
may appear at first glance.
What about going direct then? Well, despite it being the less popular
route to cover, it does have much to recommend it. Firstly, quality
control is generally built-in when you select from large direct car
insurance providers. Their standard policies invariably offer the kind
of cover that many would want in an accident.
On cost - and this is something that many find hard to accept - going
direct makes sense too. The UK car insurance sector is one of the most
competitive markets of any. The leading brands will quickly lose market
share if they increase prices compared to competors for like policies;
so they simply don't. Indeed, fear of the effects of increasing prices
is partly why they have been losing money recently.
That it is essential to compare prices via a price comparison site is a
misunderstanding of these market effects. If price comparison sites
compared only like policies, their true utility would be exposed.
No-one would expect a Mini to cost the same as a Rolls Royce and so it
is with insurance. When you throw many different policies in together
and then you display their prices, by definition there will be a range.
So, if you don't need a price comparison site to get a competitive
price and you can more easily source better quality cover by going
direct, does this mean that the UK public are getting it wrong by
favouring price comparison sites?
To some extent, yes they are. We would suggest that price comparison
sites should be used as a fall back for those that are genuinely
struggling to find affordable cover direct from a car insurance
provider and who, by necessity, are obliged to re-prioritise a low
price.
Price comparison sites remain a good first-line choice for those that
face costly cover. This includes young drivers, those without a no
claims discount, new drivers, those with driving convictions and those
with cars that are especially costly to insure but who lack the
resources to easily meet that cost.
Whether you wish to use a price comparison site or to go direct to a
leading car insurance provider, you will find the resources you need
below.
|
