Sponsored: Price comparison websites remain the cheapest way to gain a better insurance policy
28/11/12 14:42 Filed in: Sponsored post
Recent reports from the AA motoring association suggest that, for the first time in several years, car insurance premiums have fallen across the industry after a prolonged period of big increases and inflation.
The fall in premiums has transpired despite the fact that the cost of claims has been steadily rising, with the main contributing factor reported to be the price comparison wars occurring within a highly competitive market. A recent increase in companies entering the insurance market has resulted in a change in tactics for many insurance providers who have been forced to drop premium costs in order to compete for business.
This competitive nature has been exaggerated by the rise of price comparison websites in recent years. By offering a service which compares a number of competitive quotes seamlessly through one website, price comparison websites have created a much more open and transparent market which has forced certain insurance providers to rethink their strategy.
Not only have price comparison sites shaken up the industry in terms of competitive strategy, they also remain the cheapest solution on the market. The average cost of policies bought through price comparison sites stand at around £612 whilst the cheapest policies bought directly from insurers average at around £870 a year.
Whilst figures for the third quarter of the year have shown a sharper fall in premiums directly from insurers, 2.9% compared to only 1% for price comparison websites, this does not reflect the statistics overall for 2012. Instead, the AA reports, directly purchased policies are still over 6% more expensive than they were last year whilst price comparison policies have gradually got cheaper over the past 12 months.
Although a perceived lack of trust in price comparison sites may deter consumers from using these services, a study by the Office of Fair Trading (OFT) revealed that consumers could collectively save up to £240 million per year if using these sites effectually. Experts at Which.co.uk recommend price comparison websites as an excellent way of obtaining the best offers and new deals, but suggest consumers must use these websites effectively if they are to gain maximum benefit from them.
Among the recommendations for effective use of price comparison websites, many experts share the suggestion that users must do their homework and use a number of different sites to guarantee they have seen and compared every available policy price plan on the market. Another popular recommendation is that consumers do their homework when it comes to which price comparison websites to choose. It is important to know who you are doing business with and to check for accreditations from legitimate organisations such as Consumer Focus.
More information on the effective use of price comparison websites can be found on the official Office of Fair Trading