Petrol, maintenance, UK or European breakdown insurance cover – these are considered necessary bills for most of those who run a car, but perhaps the most costly of the lot is car insurance. Aside from the expense, the stress and time wastage associated with hunting around for a better policy can make many of us turn to price comparison websites. But according to the Competition Commission, rather than getting you a better deal on your cover, these sites could be pushing prices up.

The CC found that comparison websites often contractually obliged insurers not to offer cheaper insurance elsewhere, including on their own site. Since almost a quarter of the whole insurance market is served by comparison websites, the use of such "wide most-favoured nation" (MFN) contracts is having a heavy impact on insurers and motorists.

As part of the same investigation, the watchdog found that the insurance market was not working well for most UK drivers, pointing out that many motorists were footing the bill for unnecessary repair and replacement vehicle costs. It is estimated that such extras add between £6 and £8 to each insurance policy.

According to the investigation, some comparison sites have approached insurers asking them to offer lower priced cover than they currently sell, but have been turned down due to MFN clauses. The Competition Commission proposes a ban on some of the more restrictive contract clauses.

While the watchdog did not name any particular site the managing director of Compare The Market , Paul Galligan, advised the firm used MFNs, but commented: "We do not believe today's recommendation on MFN clauses represents the best outcome for consumers. We have always fought to get the very best price for our customers, and MFN clauses play a big part in this."