Lenders rewarding loyalty
The research shows that in recent years consumers became accustomed to being locked into less competitive deals while new customers got better rates.
But as comparison and cash back sites have grown in popularity, it said, and customers have waned in loyalty many financial product providers are reverting to more traditional customer service protocols, offering loyal customers the best rates and offers.
Melanie Bien, director of mortgage broker Private Finance, said mortgage lenders are now targeting existing borrowers with more frequency, particularly those with spare equity in their property who have a track record of meeting their mortgage repayments.
“Lenders are increasingly offering more competitive rates to existing customers,” she said. “Don’t automatically assume this is the best deal, but don’t ignore it either. See what a borrower’s existing lender is prepared to offer and compare that with what else is on the market.”
If borrowers are coming to the end of a fixed or variable rate mortgage, personal finance experts are urging consumers to test the wider market so they can prepare to haggle with their existing providers.
According to Consumer Intelligence consumers are becoming so savvy that they are beating comparison sites at their game by getting not only competitive prices, but getting paid to switch insurance lenders through cash back sites, such as Quidco.
“With around 10% of insurance purchasers clicking through sites like Quidco to buy policies, this is a channel to watch for the future,” said Emily Knight, a strategist at Consumer Intelligence.
The research also claims that 80% of people are likely to get quotes from price comparison sites in the future, rising to 90% among those who have used price comparison sites at last renewal.
An increase in multiple price comparison site use suggests that disloyalty is now an issue for these sites as well as for providers themselves.
Ian Hughes of Consumer Intelligence added that financial product providers must focus on more informed customer service representatives based in call centres.