Save money on financial products by comparison-shopping
Consumers are able to save hundreds of euros if they comparison-shop when purchasing financial products such as insurances, mortgages, and loans. For 15 financial products, ACM calculated the potential savings that different household types are able to realize. For example, a young family could save between EUR 900 and EUR 2,100 for various financial products. An elderly couple could even save between EUR 1,000 and EUR 2,400 per year. The exact amount that can be saved depends on each individual household. Most benefits can be achieved when purchasing these products for the first time. However, in many cases, switching also pays off. Consumers obviously need to know what they truly need, and not just look at the price.
Chris Fonteijn, Chairman of the Board of ACM, explains: “It may not be the most exciting thing you could do, but comparison-shopping does sometimes save you those extra euros that you could spend on something else. Consumers who look around, comparison-shop, and then make the purchase or switch actually promote competition. And with increased competition, businesses will offer more choices or make you a better offer.”
On mortgages in particular, consumers are able to save a lot
ACM has compared the cheapest, the average, and the most expensive offers. Price differences between these offers are considerable. The gap between the cheapest and the most expensive mortgage can be as wide as EUR 550 per year. Shopping around also pays off with car insurances: the difference between the most expensive and the cheapest insurance is almost EUR 500 per year.
Previous study into financial products
In 2012, ACM carried out a similar study. In that study, too, it was revealed that comparison-shopping could generate considerable savings. On car insurances, even more savings can be realized now compared with 2012. On financial products that involve interest rates such as loans, mortgages and saving accounts, the potential benefits are not as much as in 2012. The low interest rate apparently makes providers of such products less inclined to set themselves apart.
Consumers who shop around and switch keep prices competitive, and stimulate quality and innovation
Consumers who switch keep businesses sharp. After all, they will have to make and keep their products and services desirable enough in order to attract and retain consumers. By switching, consumers are thus able to give competition a boost. That, in turn, leads to more competitive prices, improved service, and to innovation.