The hard way to buy car insurance

Anyone over 30 will remember what an awful thing trying to get car insurance used to be, says Merryn Somerset Webb. That’s why most of us love comparison websites. Except Direct Line, that is.

car insurance used to be. You had to set aside several hours, get out the yellow pages and call around for quotes. This involved giving all your details in full each time and then either waiting on hold while someone on the other end did their sums or waiting for them to call back later with a quote and hoping you weren't on the phone to another insurer when they did. It was interminably boring.

That's why most of us love comparison websites. Today finding a cheap quote takes a matter of minutes. Visit Confused, MoneySupermarket, or Go Compare type in your details and you are pretty much done. And not just with your car insurance. These comparison sites list everything from the best deals on gas and telephones to the best ones on life and building insurance.

Still not everyone loves them. In what Andrew Ellson, writing in the Times refers to as a "bizarre some might say desperate move", Direct Line has started a high profile campaign to discredit these "champions of consumer choice." The thrust of the argument is that the sites "are merely middlemen that add unnecessary costs and complications to the search for the best deal."

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Ellson calls this "flagrant nonsense." And he's right. Regular readers will know that I am no great fan of middle men in the financial services market but in this case using an aggregator to middle man between you and the companies makes sense. It saves us time and it also introduces an encouraging level of price transparency. These days no one just accepts a renewal quote when they get it: they go on line and check they can't get it cheaper elsewhere first.

The system isn't quite perfect. The prices you see are often quotes not final prices which can be irritating (although Gocompare says it guarantees its quotes); not all offerings from all sites are included (First Direct refuses to be on comparison sites); the fact that the price element is the most important one for best buy tables can encourage insurers to cut back on any of the extras that might have once come with their cover; and it isn't clear to many users how the sites are paid for (they get a fee for every lead that ends up buying a product via them and some also charge companies fees for being listed on them).

But in general, used correctly, they are indisputably a good thing. You need to check the small print. You need to make sure that you are comparing like with like but whatever First Direct might say this isn't hard. compares benefits such as courtesy cars and the like alongside price and if you are looking for medical insurance you will find that all the sites that offer it also offer a table showing which policy offers which benefits.

Finally you might also want to look at the best buy tables to make sure that you aren't missing any really good deals before you buy. The Telegraph points out for example that Hastings Direct regularly turns up in some best buy tables for car insurance but doesn't feature on many of the comparison websites. Do all this and you are pretty much guaranteed to save money, and with only a faction of the effort it would have needed 10 years ago. (You can even start right now - see some of the best online deals from SmartQuotes below.)

The big insurance companies shouldn't be backing away from the comparison sites. Instead they should be using their influence to improve them to make sure that the the sites make it clear to the consumer how they get paid for example - and then embracing the fact that technology gives them an opportunity to show how competitive they can be in a price driven market.

If they do not they risk being at the end of consumer sentiment of the kind Direct Line is getting on the internet at the moment.

"What are these shysters frightened of," asks a contributor to one discussion board. "That if we compared their prices to other companies they'll be shown as stupidly overpriced?" Possibly. According to Debra Williams the managing director of, her initial research suggests that "nine times out of ten Direct Line's quotes wouldn't even feature in our top five cheapest prices. And in some cases Direct Line doesn't even make the top ten." So that might explain that