Newest J.D. Power Vehicle Dependability Study Reinforces CPO Value Proposition


If the certified pre-owned market needed any more fuel to keep record-breaking sales soaring, Raffi Festekjian explained how the J.D. Power and Associates 2013 U.S. Vehicle Dependability Study might have provided the very thing.

The study showed the long-term dependability of three-year-old models improved year-over-year, and Festekjian connected how these units are primary candidates to fill dealers’ CPO inventory.

“It’s good news for consumers looking for a used vehicle or a certified pre-owned vehicle because there’s a good selection in the marketplace,” said Festekjian, J.D. Power’s director of automotive research. “If you look at the top 10 list, there are several non-premium brands that are there. You don’t necessarily have to break your wallet and buy an expensive premium car.”

While the study’s top 10 performing brands did include badges such as Toyota, Honda, Suzuki and Ram, the leader for the second year in a row was, in fact, a premium nameplate — Lexus.

Lexus ranked highest in vehicle dependability among all nameplates for a second consecutive year. The study, now in its 24th year, measures problems experienced during the past 12 months by original owners of three-year-old vehicles (those that were introduced for the 2010 model year). Overall dependability is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher quality.

Among models, the Lexus RX had the fewest reported problems in the industry at just 57 PP100. This is the first time in the history of the VDS that a crossover or SUV has achieved this distinction.

“There are many analyses conducted throughout the year, but VDS remains one of the most significant gauges of long-term vehicle quality and reliability,” said Mark Templin, Lexus group vice president and general manager. “This award not only reflects real-world, long-term quality and dependability, it shows Lexus’ dedication and commitment to our customers.”

Rounding out the five highest-ranked nameplates were Porsche, Lincoln, Toyota and Mercedes-Benz. Ram posted the greatest year-over-year improvement from 2012 — by 52 PP100.

More Details of Overall Study Results

In 2013, the dependability of models that were new or substantially redesigned for the 2010 model-year averaged 116 PP100, compared with 133 PP100 for models that were unchanged from the 2009 model-year — also referred to as carryover models.

J.D. Power indicated this is the first year that there are fewer reported problems for all-new or redesigned models than for carryover models since the study was redesigned in 2009. Models that were refreshed in 2010 — those with generally minor changes to the interior or exterior — average 111 PP100 in the 2013 VDS.

Festekjian told Auto Remarketing that excessive wind noise was the top reported problem for the third consecutive year, followed by noisy brakes and exterior paint peeling, fading or chipping.

Among the top 10 problems reported, Festekjian mentioned that issues with navigation systems as well as hands-free capabilities appeared for the first time in study history.

“The good news is a lot of these problems aren’t hard-core, mechanical problems. It may be some component that needs to be replaced, but engines aren’t falling out of vehicles,” Festekjian said with a laugh.

David Sargent, vice president of global automotive at J.D. Power, elaborated on Festekjian’s comments.

“There is a perception that all-new models, or models that undergo a major redesign, are more problematic than carryover models,” Sargent said. “Data from the 2013 VDS suggests that this is not the case. The rapid improvement in fundamental vehicle dependability each year is more than offsetting any initial glitches that all-new or redesigned models may have.”

Overall Dependability Improves

In 2013, overall vehicle dependability averaged 126 PP100 — a 5-percent improvement from the 2012 average of 132 PP100 — and is the lowest problem count since the inception of the study in 1989.

Among brands measured in the study, 21 of the 31 improved in dependability from 2012. Domestic nameplates improved in 2013 at a slightly greater rate than have imports, narrowing the dependability gap to 10 PP100 from 13 PP100 in 2012 and 18 PP100 in 2011.

Overall, domestic nameplates average 133 PP100, while import nameplates average 123 PP100.

“The continuous improvement in long-term dependability means consumers should have more confidence in three-year-old vehicles, whether they are keeping their current vehicle or shopping for a used car, truck, crossover or SUV,” Sargent said.

“This means there are a lot of dependable off-lease vehicles in the used-vehicle market,” he continued. “It also means that owners who keep their vehicle beyond the manufacturer’s warranty period are able to have greater peace of mind that vehicles are becoming increasingly more dependable. That said, it is virtually certain that new vehicles being sold today will be even more reliable in three years.”

Dependability Equals Higher Loyalty

The study found that the fewer problems owners experience with their vehicle, the greater their loyalty to the brand.
Combining previous-year VDS results with actual vehicle trade-in data from the J.D. Power and Associates Power Information Network, the firm discovered that 54 percent of owners who do not experience any problems with their vehicle stay with the same brand when they purchase their next new vehicle.

Brand loyalty slips to just 41 percent, on average, when owners experience three or more problems with their vehicle.
While owners of premium models are more loyal than owners of non-premium models, on average, analysts determined the loyalty of premium model owners is more impacted by an increase in the number of problems experienced.

For example, 55 percent of owners of premium models remain loyal to the brand when they report zero problems with their vehicle, compared with 53 percent of owners of non-premium models who report zero problems.

J.D. Power noted loyalty begins to decline as soon as the owner experiences any problems with their vehicle. When experiencing three or more problems with their vehicle, the firm pointed out loyalty among owners of premium models declines to 39 percent and 41 percent among owners of non-premium models.

“It’s one thing to ask consumers if they intend to buy another vehicle from the same brand, but it is much more impactful to know what happens when they actually buy their next vehicle,” Sargent said. “By combining our consumer research with trade-in data, we see a clear correlation between dependability and loyalty.”

Highest-Ranked Nameplates and Models

J.D. Power highlighted Toyota continues to perform well in long-term dependability and earned seven segment awards — more than any other automaker in 2013 — for the Lexus ES 350, Lexus RX, Scion xB, Scion xD, Toyota Prius, Toyota Sienna and Toyota RAV4.

General Motors received four segment awards for the Buick Lucerne, Chevrolet Camaro, Chevrolet Tahoe and GMC Sierra HD.

Honda took two model-level awards for the Acura RDX and Honda Crosstour.

The Audi A6, Ford Ranger, Hyundai Sonata, Mazda MX-5 Miata, and Nissan Z also received segment awards.

The 2013 Vehicle Dependability Study is based on responses from more than 37,000 original owners of 2010 model-year vehicles after three years of ownership. The study was fielded between October and December of last year.

2013 Nameplate Rankings: Problems Per 100 Vehicles

Lexus: 71
Porsche: 94
Lincoln: 112
Toyota: 112
Mercedes-Benz: 115
Buick: 118
Honda: 119
Acura: 120
Ram: 120
Suzuki: 122
Mazda: 124
Chevrolet: 125
Industry Average: 126
Ford: 127
Cadillac: 128
Subaru: 132
BMW: 133
GMC: 134
Scion: 135
Nissan: 137
Infiniti: 138
Kia: 140
Hyundai: 141
Audi: 147
Volvo: 149
Mini: 150
Chrysler: 153
Jaguar: 164
Volkswagen: 174
Jeep: 178
Mitsubishi: 178
Dodge: 190
Land Rover: 220

Top 3 Models Per Vehicle Segment

Subcompact Car
Highest Ranked: Scion xD
Toyota Yaris
Hyundai Accent

Compact Car
Highest Ranked: Toyota Prius
Ford Focus
Mazda MAZDA3

Compact Sporty Car
Highest Ranked: Mazda MX-5 Miata
Mini Cooper
Scion tC

Compact Premium Sporty Car
Highest Ranked: Nissan Z
Mercedes-Benz E-Class Coupe
Volvo C70

Midsize Sporty
Highest Ranked: Chevrolet Camaro
Ford Mustang

Midsize Car
Highest Ranked: Hyundai Sonata
Ford Fusion
Buick LaCrosse

Large Car
Highest Ranked: Buick Lucerne
Toyota Avalon
Chevrolet Impala

Entry Premium Car
Highest Ranked: Lexus ES 350
Lincoln MKZ
Cadillac CTS

Midsize Premium Car
Highest Ranked: Audi A8
Volvo S80
Lexus GS 350/GS 460

Compact Multipurpose Vehicle
Highest Ranked: Scion xB
Chevrolet HHR
Kia Soul

Compact Crossover/SUV
Highest Ranked: Toyota RAV4
Honda CR-V
Toyota FJ Cruiser

Midsize Crossover/SUV
Highest Ranked: Honda Crosstour
Toyota Venza
Toyota 4Runner

Large Crossover/SUV
Highest Ranked: Chevrolet Tahoe
GMC Yukon
Toyota Sequoia

Entry Premium Crossover/SUV
Highest Ranked: Acura RDX
Audi Q5

Midsize Premium Crossover/SUV
Highest Ranked: Lexus RX
Volvo XC70

Highest Ranked: Toyota Sienna
Honda Odyssey

Midsize Pickup
Highest Ranked: Ford Ranger
Ram Dakota
Honda Ridgeline

Large Pickup
Highest Ranked: GMC Sierra HD
GMC Sierra LD
Chevrolet Avalanche

Nick Zulovich can be reached at Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.

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