A new survey from LowestRates.ca found that most Canadians are not doing research when choosing financial products. The survey, conducted by Ipsos, found that consumers are likely to use websites to compare travel products but not to compare car insurance, credit cards and mortgages. The research also suggests that lack of analysis leads consumers to overspend on these products.
Alberta had the highest response rate of Canadians who say they do a lot of research when shopping for financial products (45 per cent), with Ontario just behind (41 per cent), followed by Atlantic Canada (39 per cent), Saskatchewan and Manitoba (38 per cent). Quebec (35 per cent) and British Columbia (31 per cent).
Canadians on the other hand love comparing travel options. Most Canadians use comparison websites to research and book their flights (60 per cent) and hotels (63 per cent). Millennials use these websites to compare flights (67 per cent) and hotels (72 per cent) the most. The cohort that had the lowest rates of adoption, baby boomers, still had relatively high adoption rate: 56 per cent compare flights and 59 per cent compare hotels.
“The massive gulf between Canadians who compare travel options and financial products is disappointing. Because the latter is where you save real money,” says Justin Thouin, CEO LowestRates.ca. “Sure, you can shave hundreds of dollars off your flight by using comparison sites, but taking the time to compare auto insurance or mortgages saves many of our users thousands of dollars a year — and those savings add up over decades.”
The survey found that only 45 per cent of Canadians do a lot of research before they get a credit card, and 47 per cent do a lot of research before they get car insurance. When it comes to mortgages, 60 per cent say they do a lot of research — this is concerning as getting a mortgage is often the largest financial decision they ever will make. Worse yet, when renewing their mortgage, only 42 per cent of consumers say they do a lot of research, and 22 per cent say they renew without doing any research at all.
Millennials are the most likely to do a lot of research when comparing their credit card (50 per cent), car insurance (52 per cent) and mortgage options (48 per cent). Baby boomers are the least likely to do a lot of research when comparing credit cards (36 per cent), car insurance (36 per cent) and mortgage rates (27 per cent). The number of Gen-Xers that do a lot of research fell between these cohorts, with their response rates remaining below 50 per cent.
“A few months ago, we found that many Canadians don’t understand how common financial products work,” adds Thouin. “And this survey really hammers home that a large part of that is because Canadians can’t be bothered. We need to make comparing financial products as common as comparing flights or hotels.”
Not comparing financial products before buying is costing Canadians a lot every year. Canadians have access to rate comparison websites that make comparing fast, free and easy. This survey, unfortunately, shows that many are still not aware of their existence, or aren’t consulting them during major purchasing decisions. In a market like Toronto, where the price of an average single-detached house is $1 million, paying one percentage point more for a million-dollar mortgage will cost the household $10,000 in additional costs per year.
For the complete results of the survey click here.
LowestRates.ca provides Canadians with a fast and convenient way to save two of their most valuable assets – time and money. It’s a one-stop shop for Canadians to compare offers on personal financial products quickly and easily from North America’s leading companies, including our partners at CAA and PC Financial. LowestRates.ca has helped millions of Canadians explore their financial options and save money.
About the Survey
Ipsos poll conducted between July 17 and July 19, 2017, on behalf of LowestRates.ca. For this survey, a sample of 2,002 Canadians aged 18+ from Ipsos’ online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population.