broken down car
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Regardless of warranty, new and used car buyers want their vehicles to be dependable. That’s why reliability ratings from J.D. Power and Associates are an important tool in determining which vehicle to purchase.

What do the ratings mean, though? There are different ratings by J.D. Power that could be confusing to buyers. Before explaining the ratings, it helps to understand what J.D. Power does. According to its website, “J.D. Power has been capturing and analyzing the Voice of the Customer across more than a dozen industries globally for more than 45 years.”

It’s widely known for its automotive ratings, which are used as information tools by sites like U.S. News Best Cars. J.D. Power has three major automotive studies: the Initial Quality Study (IQS); Vehicle Dependability Study (VDS); and Automotive Performance, Execution and Layout (APEAL) Study.

The APEAL Study has the least impact on car buying. As the J.D. Power website explains, it is focused on what consumers like about their new cars 90 days after purchase. It is not a reliability study.

Dave Sargent, vice president of global automotive for J.D. Power, explains what the other studies mean. “Predicted reliability is our expectation to how reliable a car is likely to be based on how it performs in early initial quality measures combined with the track record of the manufacturer. There is a strong correlation between early quality and later in the ownership period. It’s expected reliability based on the available data,” he says.

The Initial Quality Study gathers information from owners 90 days after purchase. “For the most part, models stay reliable," Sargent says. "The best prediction of long-term reliability is short-term quality. That is what we would use to forecast what the likely reliability would be. It’s just a prediction. It’s not a guarantee.”

The Vehicle Dependability Study looks at cars sold as new three years ago. Vehicles are rated based on the number of complaints per 100 vehicles. The reliability score contributing to the U.S. News new-car rankings is the Predicted Reliability rating provided by J.D. Power. This score is based on the past three years of historical initial quality and dependability data from J.D. Power's automotive studies, specifically the VDS and IQS.

For example, the 2012 Jeep Grand Cherokee is rated at 2 circles by J.D. Power, which means it has a reliability score of 2 in the U.S. News car rankings. That means it is among the least reliable vehicles. As J.D. Power explains on its website:

  • 5 circles means among the best
  • 4 circles means better than most
  • 3 circles means about average
  • 2 circles means the rest

“VDS rating is actual reliability," Sargent explains. "These are vehicles that have been on the market for three years. This year focused on 2012 models. It refers to the number of problems reported with those vehicles in the most recent year. This is not predicted reliability. It’s actual dependability. It’s good because it’s actual vehicles. The only downside is the vehicles that have launched in the last three years."

The Vehicle Dependability Study is best suited for used car buyers for that reason, he adds. “It’s entirely based on ownership surveys. We don’t put in our ratings of the vehicle. The biggest misconception is we are actually evaluating the vehicles; that it is our opinion. We are clear to state this is what tens of thousands of consumers think. It’s not what J.D. Power thinks. It’s what the consumer thinks,” Sargent says.

Todd Turner, president of Car Concepts, an automotive research firm that primarily focuses on pricing and brand image, says that’s inherently one of the flaws of the survey. Consumers can’t always be trusted to recall problems accurately. “That can vary a great deal,” says Turner, who used to work for J.D. Power as an analyst. "Some people keep accurate records. Other consumers are going to fly through it based on what they remember. I’m less confident in it because it depends on people, but it’s true of every survey."

Consumers should not rely on one survey as a determination of quality, Turner advises. “What consumers need to do is look at [J.D. Power] as a source but not the sole source. It’s a good idea to get as many sources of information as you can,” he says, recommending Consumer Reports ratings, which combine consumer feedback along with testing by Consumer Reports experts.

Turner stresses that he is not downplaying the effectiveness of the J.D. Power surveys. “These studies are important because they help establish a trend,” he says. "If consumers see there are problems with a specific brand, they should probably stay clear. Even small problems require going to a dealer. In terms of convenience, a burnt light bulb can be as bad as a blown engine.”

Another good source of information for consumers can be car buying sites that allow comments about specific makes and models, Turner says, explaining this anecdotal evidence can also point to problems not yet showing up in surveys. “Any of the shopping sites that allow consumers to make comments are good for information. But only the ones that monitor the comments, so it’s not a free for all,” Turner says.

Something else consumers should take away from the J.D. Power ratings is they are vehicle-specific, Sargent adds. “There’s a lot of variation within each brand. Virtually every brand has some high-quality vehicles and low-quality. You can’t buy a certain brand and assume about its reliability. You have to research the particular model,” he advises.