The Competition and Marketing Authority (CMA) have said that special money off deals between car insurers and price comparison sites should be banned.
The CMA say that by offering lower priced deals through price comparison websites, insurers have to maintain higher policy prices elsewhere. More than half of insurance deals are thought to be made through price comparison websites now, and the vast majority of deals through these websites are given under these deals which let customers buy cheaper, but force insurers to up prices elsewhere.
In the long run, the AA say that banning these special prices available through comparison websites, the average customer will save £20 on their car insurance costs, as the BBC reported.
“They certainly help motorists look for the best deal, but we want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels,” said Alasdair Smith, the CMA deputy panel chairman.
The inquiry concluded that 26 million private motorists in the UK are paying too much for their insurance. Furthermore, the Association of British Insurers (ABI) has apparently welcomed this announced ban.
If this ban comes into effect (which it will unless it gets appealed by industry members) it is possible that prices on price comparison websites will go up, but, to balance it, prices elsewhere, such as direct from insurers or through brokers, will come down.