Following on from our earlier posts about using the Key Facts Sheet to assist with comparing and reviewing home loan offers, we thought it appropriate to briefly chat about comparison websites.
As consumers, we are lazy. We like to find short cuts that help us sift through complex information in a way that then allows us to make informed decisions. And there is nothing wrong with that – we should strive for efficiency and continuous improvement in all that we do so that we can continue to make smarter choices.
With that in mind, let’s assume you need a new fridge. What’s the purchase/decision making process most likely going to look like? If you are net savvy, chances are, you will start out having a quick look online to try and learn about some of the basic features you may need (ice maker? self defrosting? Etc.). Armed with limited knowledge, you will likely then head in-store somewhere nearby to go and check out the options and discuss specifics with a sales person. At this point, you have some idea of what you think you need. After chatting to someone “knowledgeable”, you may find out that they proposed a particular brand and model for your needs based on their opinion that it was the best product for you.
Let’s assume you now leave the store, head across the road, and repeat the exercise at a different shop. This time however, they propose a different brand and model which is supposedly “perfect” for you. When you question them about the brand/model the other store advised you about, they tell you that they don’t stock that brand.
Heading back to the original store to enquire about the brand/model the other store advised you about you find out the same thing, ie, they do not stock the other recommended brand.
This now leads you to the surprising conclusion that not all stores stock the same popular brands. Despite them having hundreds of models available, they still have gaps in their range. Why is this the case? Well often, certain chains will have supply agreements with certain suppliers whereby they will make a product/brand their “recommended” option for consumers. In return, the store may receive better pricing on other products. Sometimes they even qualify for an “override” commission which is kind of like a kick back.
The point we are trying to make here is that one should not assume that simply because they are presented with a choice of product, that that choice is comprehensive, representative, or even unbiased in its presentation.
This is exactly the same with home loan comparison sites. Sites are not always unbiased. Advertisers strike different deals with each site and as such, certain products are presented above others and much more prominently promoted. Default sort criteria can also skew results. And some lenders are not represented at all so would be totally absent from certain comparisons. The best bet is to use multiple comparison sites to try and consolidate one, comprehensive shortlist that you can then work from.
MyRate reviews our marketing initiatives regularly and we try to ensure we have comprehensive coverage so that more people can find us compared in more places.