Apart from kitchen sinks, there is not much that Tesco does not sell. The supermarket group has diversified into clothes, furniture, property and now financial services.

Through Tesco Personal Finance, shoppers can add insurance, loans, credit cards and savings accounts to their shopping lists. It even offers home phone, broadband and mobile tariffs and recently launched its own price comparison website, Tescocompare.com. But how does Tesco compare? With its dominant market position and reputation as a “value” brand, customers may think that buying everything from Tesco will save them money, as well as being easier than shopping around. But in our searches, Times Money found that while Tesco does offer some competitive deals, its financial products are rarely the cheapest.

Tesco was beaten on car insurance, annual travel cover, life insurance, savings rates, broadband, landline and mobile phones. It was top for home insurance, because it currently offers a 50 per cent discount, and for its personal loans, which have a low typical rate of 6.6 per cent.

For a 26-year old female driving a Skoda Felicia in London, the car insurance quote was £834.75, which was £38.26 more expensive than the cheapest, from Yes! Insurance, found by uSwitch.com. But Tesco does offer “value” car insurance. Its no-frills fully comprehensive option, which excludes cover for smashed wind-screens, stolen radios and temporary replacement vehicles, was the cheapest on the market at £614.29.

For annual worldwide travel insurance with winter sports cover, 13 insurers beat Tesco’s quote of £67.50. The cheapest, an exclusive deal from Insurefor.com via moneysupermarket.com, was for £39.99. Most of the cheapest quotes came from online-only insurers, such as Swiftcover.com.

For life insurance to cover £100,000 over 25 years, Tesco charged £7.65 a month. The cheapest policy was £5.20 a month, from Aegon, which was found by Lifesearch, the broker. Lifesearch says that the majority of quotes, including policies from AXA, Friends Provident and Legal & General, were cheaper than Tesco quote for a 26-year-old female nonsmoker.

Tesco’s savings rates were quite far from the top of the best-buy chart. A saver with £10,000 in Tesco’s Internet Saver account, which pays a gross rate of 6 per cent and an annual equivalent rate of 5.75 per cent, could make an additional £66 a year in interest by moving the money to ICICI’s internet-only account, paying 6.41 per cent. For instant access, a saver would be better off with Anglo Irish Bank’s telephone and internet account, which pays 6.3 per cent, giving £630 total interest against £575 interest from Tesco’s Instant Access deal at 5.75 per cent But Tesco’s personal loan rate was marginally better value than the rest. On a £5,000 loan over five years its typical APR of 6.6 per cent would give monthly repayments of £98, compared with £98.15 on a rate of 6.8 per cent with Moneyback loans.

For phone tariffs and broadband, comparison is more complicated. With Sky, a package including unlimited calls at any time and free calls to Australia, up to 16Mb unlimited broadband and Sky TV, including a Sky Plus box, comes to £68.50 a month, based on a 12-month contract. Tesco’s package includes its Talk 2 plan, with free evening and weekend calls to national numbers, at £12.45, unlimited broadband, at £24.97, and a Sky package costing £43. This gives a total monthly cost of £80.42.

Tesco’s mobile phone deal is not the cheapest either. It offers a free Nokia 6300 on the O 600 minutes of talktime, 500 text messages and £75 cashback, for £35 a month. This is £11 more expensive than the cheapest, which is 3 Mobile’s mix-and-match 900 package, with 900 units of call minutes or texts and a free Nokia 6288 for £24 a month.

There is evidence that Tesco has already decided that trying to be the cheapest is not the way forward. Instead of always offering bargain prices, Tesco has decided to focus on offering services that allow customers to search for the best deals themselves. Traditional price-comparison services, such as moneysupermarket. com, do not include Tesco Personal Finance deals because it is owned by Royal Bank of Scotland (RBS), so Tesco launched Tescocompare.com in September to compare the car insurance market, including deals from RBS. Tesco also stopped selling mortgages, replacing them with a free broker service provided by London & Country.

Matthew Dransfield, of Tesco Personal Finance, says: “We offer consistently good value and don’t go for headline-grabbing rates. Increasingly, customers shop on factors other than price and are using websites to choose a variety of financial products.”

Tesco does not sell own-brand electricity tariffs either, but there is an energy cost comparison service on Tesco.com.

Mortgages removed from the shelves

Tesco caused a stir at the end of 2005 when it began selling mortgages, but three years on it has decided to ditch own-branded home loans in favour of a mortgage-broking service provided by London & Country.

The problem with the Tesco mortgages, say brokers, is that they were not competitive, and launching a mortgage finder is a better way of offering cheap deals. Between 65 per cent and 80 per cent of UK mortgage business goes through brokers, who can often negotiate better rates for customers.

Andrew Montlake, of Cobalt Capital, another broker, says: “This service is much better. Tesco is not a mortgage expert, and offering one product is no longer the way to go as more people want choice.”

Colin Robertson, head of cards and lending at Tesco Personal Finance, says: “We developed the Tesco mortgage finder to act as a portal that our customers can use to get the best mortgage buys on the market.”

The service also ties in with Tesco’s estate agency service, which will launch soon.

Battle in the aisles

Supermarket price wars apply to financial services as well as loaves of bread. Tesco is winning the battle for personal loan customers with its 6.6 per cent typical APR, beating Sainsbury’s into second place with 6.9 per cent and Asda into third with 8.9 per cent.

However, Asda leads the way for savings, paying 6.35 per cent on its internet savings account. In second is Sainsbury’s, with 6.25 per cent on its Internet Saver, followed by Tesco’s 5.75 per cent.

How the credit cards compare depends on whether you use your card for purchases and where you shop. Tesco’s 0 per cent balance transfer rate lasts twelve months. Then comes Sainsbury’s with ten months and Asda with nine. Tesco and Sainsbury’s offer 0 per cent on purchases at their own stores for twelve months, but Asda does not. All three offer 0 per cent on all purchases for three months.

On home insurance, Asda claims that 92 per cent of its customers save, but Tesco has a 50 per discount until December 11 and Sainsbury’s has twelve months for the price of nine until November 27. Asda also says that 60 per cent of customers save on its car cover, but Sainsbury’s has a 10 per cent online discount and Tesco 15 per cent.