Using comparison websites

Comparison websites can be helpful, but they have limitations.

How comparison websites work

Comparison websites can be a convenient way to compare costs and features of products and services in one place. They can be a good starting point for your search, but it's important to understand how they work and what you other comparison options are.

They're a business

Comparison websites are businesses that may make money from the products they show on their website. They make money in different ways, for example:

• from sponsored links
• by showing sponsored links before non-sponsored links
• from commissions paid by the product providers when you buy through the website
• from collecting and selling your personal information

Some limitations of comparison websites

Comparison criteria is not always clear

Ratings and rankings on comparison websites are not always clearly explained. This can make it difficult to compare products like for like.

For example, while price is one feature to compare, it's not always the most important. Check if the website is comparing all the features that are important to you.

Not all products are covered

Most comparison sites don't cover everything that's available. They usually only cover certain products and certain providers (for example, providers that pay them commissions).

How to use comparison websites

Here's how to get the most from comparison websites:

check_box Decide what matters to you – Before you start searching, think about the product features that are important to you. For example, fees, interest rates, exclusions.

check_box Shop around – Look for other products or providers not listed on the comparison website by searching online or using consumer advocate websites (for example, CHOICE).

check_box Use official government tools, where possible - The government provides comparison tools for certain products and markets. These are great to use where possible because they are independent, trustworthy, and aim to cover the entire market.

• • For energy, use state or federal comparison tools such as Energy Made Easy or other tools listed on its website.
  • For health insurance, use PrivateHealth.gov.au.
  • For MySuper superannuation products, use the YourSuper comparison tool offered by the Australian Taxation Office.

check_box Make a short list – Identify your top results by using your key features list.

check_box Get more detail – Compare the top few results by reading the fine print. Look at the product disclosure statement (PDS) or other information about the features and fees. Look for extra fees not covered in the initial comparison and make sure the features you're comparing are similar.

check_box Make an informed decision – When you've made your decision, contact the product provider. Ask them as many questions as you need to until you feel ready to commit. If you're choosing a financial product, or receiving a financial service (like advice about what to do with your super), make sure the provider is licensed with ASIC.

Protect your personal details

Be careful entering your personal details into a comparison website, especially if entering your contact details is a prerequisite to receiving a comparison.

Comparison websites can be used to generate leads for cold callers or telemarketers who target you with offers that may not be in your best interest. Sometimes, generating leads is the real purpose of the website (rather than helping you to make genuine comparisons at all).

Cold callers are currently using high pressure sales tactics to get people to compare and switch super funds. Be cautious if someone you don’t know contacts you about your super. Your super is too important to discuss with strangers.

Visit our other pages for more tips on comparing home loans, car loans, personal loans, credit cards, insurance and superannuation.