Supermarkets branch out to car insurance

Over recent years supermarket giants in the UK have branched out enormously and in addition to offering groceries and household goods many have also been offering a wide range of financial products, such as loans, credit cards, insurance products and even banking facilities.

According to a recent report, Tesco has now gone a step further and has launched a price comparison website for those looking for deals on car insurance in the UK.

There are already a rising number of price comparison websites in operation for car insurance, and Tesco will be joining this long line of comparison sites with its news venture Tesco Compare.com, which has been launched in conjunction with the Royal Bank of Scotland. The site will be launched in mid-September, but consumers should be aware that there will be a limited number of insurance companies that are used in the comparison, which totals around twenty in all.

As has been the trend in other sectors, this move by Tesco could result in other supermarket giants also setting up similar sites, which means that the huge number of price comparison sites could balloon even further in the near future. As with other price comparison sites customers will be able to enter their details into the Tesco website in order to search for the best deal on car insurance, but this will be from between the companies listed by Tesco.

Amongst the insurance companies that will be listed are some RBS ones, including Churchill, and consumers are reminded that because of the limited number of insurance companies that will be listed there could be better deals available from other insurance companies that are not listed on the Tesco site. 

Tom Smith
20th September 2007

Tags: personal, finance, compare, price, tesco

Direct Line launches campaign against price comparison services

One of the UK’s best known car insurance companies, Direct Line Insurance, has launched a campaign against price comparison websites that help consumers to find that they claim is the cheapest insurance for their needs.

Price comparison websites require consumers to input a number of details, and then use these details to find the cheapest deal on car insurance cover. However, this is only from their database of insurers and not from every major insurance company in the UK.

According to research carried out by Direct Line over 40 percent of consumers that had used price comparison services to find cheaper vehicle insurance had thought that all major insurance companies would be included in the search.

The research also goes on to indicate that over 90 percent of those that have bought their vehicle insurance cover through a price comparison site feel that there should be some sort of warning so that consumers know right away that not all insurance companies are part of the database.

The Royal Bank of Scotland owns Direct Line, as well as Churchill and Privilege, and will not provide any quotes for customers through price comparison websites. An advertising campaign has now been launched by Direct Line to make consumers aware that price comparison sites do not represent all leading insurance companies in the UK.

One Direct Line spokesperson stated: ‘Consumers are confused about price comparison websites and our research shows many believe they provide an independent, public service designed to ensure consumers get the best deal on their insurance. Unfortunately this is not the case, as these websites are really just on-line middlemen who make money out of commissions on insurance sales, just like a traditional high street broker.’

Tom Smith
1st July 2007

Tags: market, online, compare, cheaper, Insurance, all, prices

Consumers should keep an eye on their savings rate

Consumers are being urged to keep an eye on their savings rate following the latest interest rate rise by the Bank of England.

Banks and building societies are often notoriously slow at applying any interest rate rises to savings account, yet are quick to apply them on borrowing, which means that they make maximum profits from any interest rate rises. The Bank of England has raised interest rates four times in the last nine months, taking them from 4.5% last August to 5.5% earlier this week. However, although borrowers quickly see repayments on variable rate loans and mortgages going up, savers do not benefit from the same speedy action.

In some cases, according to industry experts, banks and building societies simply leave the interest rate on savings unaltered, and most consumers fail to notice or concern themselves about this, leaving the banks to rake in million in additional profit.

Experts are urging consumers to keep on eye on their interest rates on savings every time the Bank of England imposes another interest rate rise, and to make sure that they either see the rate reflected on their savings account or consider switching accounts to one that does offer a competitive rate of interest.

Many of those with savings account may have to wait until June to see any rise in interest rates on their savings, and even this small delay could rake in huge profits for banks and building societies.

Kevin Mountford, head of savings and current accounts at moneysupermarket.com stated: ‘It takes providers an average of 20 days to pass on an interest rate rise. With each half per cent rise bringing in £12m per day in interest it’s easy to see why providers delay. If the reason for the average 20-day delay is operational then banks and building societies should backdate the rise.’

Tom Smith
21st May 2007

Tags: savings, compare, change, current, switch, rise, moneysupermarket, accounts, interest, rate

Home credit lenders must make it easier to compare deals

Home credit lenders have recently been targeted by the Competition Commission in the UK, and the industry has been told that it needs to make things easier for consumers in the UK when it comes to comparing deals and repayments on finance offered by home credit companies. The commission also added that the industry needed to ensure that consumers that repaid the loan earlier than arranged received some form of rebate. However, the commission has decided not to enforce a price cap, as officials state that this could hit some consumers hard.

Research showed that the average sum borrowed by UK consumers in the form of home credit was £300, with loans starting from around £100. The home credit industry has nearly two and a half million customers in the UK, and the majority of these borrow under five hundred pounds in the form of home credit. The Competition Commission, however, has decided not to place any price cap as more vulnerable consumers that may need more could otherwise find themselves in difficulties.

After it came to light that a small number of home credit companies were controlling the market when it came to this type of finance, the commission was said to be ‘opening the market’ when it came to home credit. The commission is in the stages of doing this, and has stated that lenders in this industry will need to publish their data on a website, so that consumers can then easily compare terms and costs in order to get the best deals.

With regards to its decision not to enforce price caps, the chairman of the commission said that he thought that capping might have “…reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit. We also felt that price caps could prove to be extremely difficult to apply and enforce in this industry.”

Tags: credit, deals, compare, loan, lenders, uk

Switching Finances Can Save You Thousands

Financial experts have concluded that on average Brits could enjoy saving a whopping four thousand pounds a year simply by switching financial products such as loans, savings accounts, credit cards, and mortgages to better value products than their existing ones. The figures are based upon those currently putting up with poor deals on such financial products, and the financial difference it would make if they were to switch to some of the best deals around for the same type of products.

According to figures released by Moneyextra, the average saving that people in the UK can make each year by making this switch equates to £3976.02. According to the data, three months ago making the same type of switch would have saved Brits £167.24 less than it would now, so in the space of three short months consumers in the UK can save even more each year simply by ensuring that they have the best value financial products.

Robin Amlot of Moneyextra stated: “At this time of year, when consumers’ minds are turning to spending perhaps not wisely but all too well for Christmas, it’s more important than ever to make sure we’re getting value for money for our money. Shopping around for just the right present for the person you love is second nature. Shopping around for just the right financial product or service for yourself should be too.”

According to Moneyextra, the bulk of the savings each year can be made through finding a good value mortgage, and shopping around for the best deals. Finding great deals on credit cards and laons can also net substantial savings each year. And looking out for higher interest savings accounts could help you to clock up more in the way of savings. A combination of all of these changes therefore adds up to a considerable annual saving.

Tags: compare, shop, uk, around, Mortgages, finances, deals, offers, Loans

Choosing the right card

Choosing a credit card can be a process full of heartache and confusion; there are so many to choose from. But do they really offer different benefits?

Whether you are venturing into the world of credit for the first time or are thinking of changing your card, we examine the process of choosing a card and reach some interesting conclusions.

Loads of money!

It was clear some decades ago that credit cards were here to stay. In the late seventies there were articles on TV and in newspapers that soon we wouldn’t use cash any more – no more paper and no more heavy coins jangling in the pockets.

It hasn’t quite gone that way, but certainly these days it’s a question of which card to choose not “do I want one?”

Everybody’s different

What type of credit card user are you?

There are some very set patterns that go to make up the million or so credit card users in the UK today. There are so many of us that all together we owe in the region of £180 billion. And that’s a lot of interest!

Pay it off

Do you clear your balance every month? If you are one of these tidy users then really the market is completely open to you as you won’t have to concern yourself with how much interest the credit card company charges. It would be worth casting an eye around the market though just to make sure you’re aware of what is on offer.

To pay it off, or not pay it off, that is the question

If you use your card for regular purchases each month and usually pay off those regular sums but occasionally run up larger bills, perhaps at holiday time or Christmas, then you do need to be aware of how much interest you are being charged.

You should also examine how long the interest free period is offered on the card. Most companies will give you between 56 and 59 days interest free credit, but a rare few don’t give any!

The hole in the wall

If you are going to use your credit card to obtain cash then you are going to get stung anyway you look at it. Going to the hole in the wall will incur interest on the cash as soon as it’s in your hand; there are no interest free periods with cash transactions.

Check to see what rate the company charges for cash; it’s bound to be higher than other rates on the card.

A debt is a debt is a debt

If you are somebody who has run up a debt, or is likely to run up a debt, on your credit card and lets it sit there, then you really do need to go for the cheapest option you can get your hands on.

There are two schools of thought for outstanding balances. Some people say chose a credit card that has a low interest rate for the life of the balance and stick with it. Some people say go for the zero rate promotions and switch when they come to an end. We say it’s up to you.

Buyer beware

If you are going to change between zero rated cards and become a bit of a ‘rate tart’ then you will need to keep an eye on how often you do so and whether there are any penalties charged when you transfer to the next zero rated account.

Switching from card to card for the zero rated incentives can affect your credit rating. Credit card companies have now got wise to the fact they are losing something like £1bn a year in potential revenue by people taking advantage of their offers. So watch out for those fees.

Something for nothing

Credit card companies have also now introduced what are known as honesty boxes on their promotions. These show all the interest rates they charge and should be displayed in a clear understandable form, so you can easily compare like for like.

As far as other incentives are concerned there are cards out there that offer reward points or discounts at selected retailers, cashback, zero percent on goods purchased or even, on special charity cards, a small donation to a named charity every time you make a purchase. There will be one for you.

Choose your weapon

The credit card industry spends billions of pounds every year on encouraging users to transfer balances or to take out more credit. The different types of card on offer are staggering and have been developed to compete in the High Street wars of open finance introduced in the eighties. Today, some of the larger organisations like Barclaycard or American Express will offer several different cards each with their own unique benefits. These demonstrate that we all may be unique, but we each share the same type of habits when it comes to dealing with our finances.

Choose carefully, for your credit card can be your friend if used wisely in the fight to survive the daily financial grind or it can very easily become your enemy.

Tags: credit, compare, transfers, cards, choose, balance, apply, best