The J.D. Power name is ubiquitous in automotive advertising with brands routinely bragging about the awards they’ve received from the respected third-party market research firm.
The company issues 14 annual studies about vehicle quality, consumer satisfaction and other topics. There’s an award for the brand with the most reliable vehicles after three years of use. There’s another for the car company that delivers a new vehicle with the fewest problems. There’s even one that just focuses on vehicle seating.
But how useful is all of this to consumers looking to purchase a vehicle? Are the rankings and ratings a way to evaluate an automotive brand and specific models?
Forbes Wheels looked into the two most cited J.D. Power reports, the Vehicle Dependability Study (VDS) and the Initial Quality Study (IQS).
The VDS comes out annually every February and measures the number of problems per 100 vehicles experienced during the past 12 months by original owners of their three-year-old vehicles. A lower score reflects higher dependability.
This year’s study measures problems in 2018 model year vehicles and found that cars are becoming more reliable.
The IQS comes out every June and examines problems experienced by owners of current model year vehicles during the first 90 days of ownership. It is also measured by the number of problems experienced per 100 vehicles, with a lower score reflecting fewer problems and therefore higher quality.
J.D. Power Research Is for the Auto Companies
The first thing to remember is that J.D. Power is conducting market research for the auto companies rather than consumers, said Jeff Blyskal of Consumers’ Checkbook, a non-profit consumer information site that has analyzed car ratings from multiple organizations.
But that doesn’t mean they don’t provide good information.
“Their surveys are impressive and rigorous. They have a huge number of verified owners,” Blyskal said.
That is a key factor for J.D. Power.
“We know with 100% certainty that the person we are surveying owns the vehicle that we’re asking them about,” said Dave Sargent, vice president of global automotive at J.D. Power.
Ownership verification is necessary because ratings on other sites may be based on information collected from online surveys, discussion forums, or chat rooms, he says. There’s no way to know if the person providing the opinion even owns the vehicle.
The next question is, do they track in a way that provides meaningful information for a car shopper?
For example, what good is a top score in the initial quality study if the vehicle’s reliability doesn’t hold up? Most flaws detected early on in vehicle ownership will be fixed under warranty by the manufacturer without charge. For a consumer, the importance of a high score in the initial quality study should be predictive for the vehicle’s life.
How much correlation? Six of the 10 brands ranked highest in that 2018 initial quality study also made the 10 highest rated in the 2021 vehicle dependability study. A comparison of the respective studies from the previous year had the same ratio.
Sargent said the two studies measure different time frames and slightly different things. Part of the IQS covers the ease of use and location of features within the car: dissatisfiers rather than component failures. An uptick in problems last year was the result of Power asking more questions, according to Sargent. IQS 2020 covered 223 potential problems in nine categories: climate control, driving assistance, driving experience, exterior, features-controls-displays (FCD), infotainment, interior, powertrain and seats.
The VDS makes a more extensive effort to capture whether things are wearing out or malfunctioning. Automakers don’t consistently score evenly on those measures. For VDS 2021, Power asked respondents to cover 177 problems grouped into eight vehicle categories: audio-communication-entertainment-navigation (ACEN), engine-transmission, exterior, interior, features-controls-displays (FCD), driving experience, heating, ventilation and air conditioning (HVAC) and seats.
“Toyota is a good example of a brand that doesn’t always do great in the initial quality study, but almost always does well in the dependability study,” Sargent said.
Sargent said new car buyers should focus on the IQS because that better matches the experience they will have with their purchase. That makes sense for leased vehicles where the lease term typically matches the time a car is under warranty.
This Year’s IQS Rates 2021 Cars, VDS Rates 2018s
Used car buyers should look at the VDS and match the vehicles’ model year in the study to the car they are considering buying. A consumer shopping for a 2018 model coming off lease would look at the 2021 VDS. Someone considering a 2016 vehicle would look at the 2019 VDS.
While the studies could be helpful, shoppers should still understand why J.D. Power collects the information, both consumer advocates and auto industry analysts advise.
“The bottom line is that a lot of these ratings you have to take with a grain of salt. To use the J.D. Power ratings in advertising and marketing, the award winner has to pay a price,” said Jack Gillis, executive director of the Consumer Federation of America.
Consumers always need to be mindful of how organizations rating vehicles are deriving profits, said Gary Silberg, Global Automotive Sector Leader for KPMG, the international consulting and accounting firm.
J.D. Power conducts its extensive owner surveys, compiles the information and makes it available to automakers on a subscription basis. While subscribers can pay a fee to use rankings and awards from the studies in advertising and marketing, Sargent said that’s a small part of the business.
Automakers subscribe to learn what consumers think about vehicles from competitors, he said. They already have a good idea of what is or is not working with their cars from customer complaints, dealer service data and warranty claims.
Automakers depend on J.D. Power to provide accurate, unbiased information or else it would be of no use, Sargent said.
“It doesn’t matter to me in the slightest who wins. It just matters to me that the results are accurate. I upset all of the automakers on a daily basis,” Sargent said.
Ratings from J.D. Power, Consumer Reports and others “provide a small piece of information that consumers can use when they are trying to figure out a vehicle purchase, but it should not be the make or break between one car or another,” said Stephanie Brinley, an automotive analyst at research firm IHS Markit.
And there is no substitute for the oldest way of evaluating a car purchase.
“One of my admonitions to consumers is that you need to take a good long test drive in any vehicle you are considering purchasing,” Gillis said.