J.D. Power Leverages Analytics and Insights to Help Consumers Decide Which Vehicle to Purchase

In a Nutshell:  Buying a new or used vehicle can be one of the most expensive purchases a consumer ever makes. J.D. Power offers consumers insights to help them make an informed decision when shopping for a vehicle or having it serviced. The company invites vehicle owners to participate in its independent surveys and share their opinions on their satisfaction with their cars’ performance. Automakers can purchase information from J.D. Power to learn about their competitors’ products. 

The process of purchasing a vehicle can be daunting. Not only are vehicles relatively expensive items, but they are sophisticated machines. Some consumers may not feel comfortable assessing a vehicle’s features. Some may not understand the terminology used in the automotive industry.

Fortunately, companies share their expertise with consumers to help them purchase an automobile that best meets their needs. We spoke with David Sargent, J.D. Power’s Vice President of Global Automotive, to learn how the company helps consumers make informed decisions.

Sargent said J.D. Power provides intelligence on products and brands that consumers spend a significant amount of money on. He said the company’s research covers various fields, including financial services, insurance, and telecoms, but it’s most known for its work in the automotive space.

J.D. Power started as a company solely reviewing automotive products before expanding to cover other industries, Sargent said. He said most people are familiar with the company because marketers include its name in advertising campaigns.

Sargent said J.D. Power obtains data for its studies independently of automakers, who play no role in the company’s research. He said J.D. Power has access to lists containing the names of consumers who have recently purchased new vehicles and the exact vehicle they bought.

J.D. Power sends consumers who’ve recently purchased a vehicle a link to a survey and offers them an incentive to participate in its study, Sargent said. He said customers complete the company’s surveys online, but J.D. Power initially contacts them via the mail because the company often doesn’t have access to consumers’ email addresses or phone numbers.

Sargent said consumers who elect to participate in J.D. Power’s studies communicate any problems they have experienced with their vehicles. He said the company’s surveys also ask consumers if they are satisfied with their vehicle’s style, comfort, and performance. J.D. Power directs participants to assess the sales process and customer service they received while purchasing their vehicle and having it serviced, Sargent said.

Some people prefer to purchase used cars rather than new ones. Sargent said J.D. Power surveys consumers who have owned their vehicles for multiple years to gauge their opinion on their car’s dependability and learn of any issues the owner has had with their vehicle.

Sargent said the company asks used-car owners if they’ve taken their car to a dealer for servicing and, if so, how they felt about the quality of work the dealer’s service center performed.

“We take all this information and collate it,” Sargent said. “It’s thousands of surveys, and we essentially score the makes and models of vehicles based on how they performed. We do the math to build product rankings, and the public sees the tip of the iceberg of all that information.” 

J.D. Power issues press releases announcing the results of its studies. Sargent said automakers pay the company for detailed results of its studies. He said automakers know the vehicles they manufacture well, but they subscribe to information from J.D. Power to learn more about the vehicles their competitors produce. 

Sargent said J.D. Power doesn’t reveal the names of its survey respondents, but it provides automakers with the commentary respondents submit. He said the company also reviews repair data from automobile dealers to discover problems people experience with older vehicles.

“Once a vehicle is three years old, its dependability performance is often set,” Sargent said. “If a car is performing well after three years of ownership, it is more likely to still be doing well in five or 10 years. All vehicles tend to decline in dependability as they age. If anything, gaps between models expand over time. Vehicles performing well after three years of ownership are probably, relatively speaking, doing even better after five years of ownership.”

Sargent said he’s worked for J.D. Power for 32 years, and he’s impressed with how automobile manufacturers have improved the quality of vehicles they produce. He said today’s vehicles have superior designs and better materials than cars manufactured 20 years ago. Sargent said advancements in vehicle design, engineering, and manufacturing make purchasing a used car a safer choice than it used to be.

Individuals shopping for a new or used vehicle may not know how to research their impending purchase. Sargent said it’s crucial consumers research the exact car they are contemplating purchasing, not just a vehicle’s brand. He said variations in quality occur within vehicle brands.

“Consumers must look at the year and the model of vehicle they’re considering purchasing,” Sargent said. “It’s very much in the eye of the individual in terms of what’s most important to them. For some people, reliability is the single most important component of a vehicle. Others may place more value on the vehicle’s style or in what it’s like to work with the vehicle’s dealer.”

Sargent said consumers should consider factors specific to the region where they most often operate a vehicle when evaluating automobiles for purchase. He said some cars work well in warmer climates, but they may not be a sound investment for someone living in an area with long and harsh winters.

“Consumers need to consider where they live and their lifestyle when considering which vehicle to purchase,” Sargent explained. “What we’re really trying to provide is stuff that is hard for consumers to figure out for themselves. One of the key things about the automotive purchase and ownership processes is that people generally own only one vehicle at a time, and it’s generally for a long time. It’s important they consider all the relevant factors.”

Sargent said J.D. Power is careful to avoid directly recommending which vehicle a consumer should purchase. He said some people use the company’s studies to learn which vehicles not to buy as much as they do to discover which vehicles meet their needs.

“Our studies often help people in the market for a new vehicle shorten their shopping list and avoid vehicles that don’t perform well,” Sargent said.

Sargent said people shouldn’t buy an automobile without first test-driving multiple vehicles. He said many people don’t test-drive cars before purchasing them, which can cause them to overlook factors that may influence their evaluation of a vehicle.

Sargent said consumers should use test drives to gain familiarity with a car’s ancillary features, such as its infotainment system, and shouldn’t feel pressured to take a short test drive.

“You’re not going to figure everything out in a short test drive,” Sargent said. “Consumers should take their time and use a test drive to figure out if a vehicle works for them. They shouldn’t get rushed by a salesperson to just drive around the block and make a decision.”

Sargent said consumers shouldn’t feel embarrassed by their efforts to ascertain the total cost of owning a vehicle, including fuel costs, insurance premiums, and a vehicle’s potential depreciation.

“A vehicle is a big purchase, and it’s something you’re going to own for a number of years,” Sargent said. “You don’t want to regret your decision, so take your time and do your research.”