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What Is J.D. Power — and Why Do Its Ratings Matter?

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2018 Buick LaCrosse

The Buick LaCrosse was ranked no. 1 in the Large Car segment in J.D. Power’s 2018 Vehicle Dependability Study

Over a lifetime of watching television, you’ve probably watched countless car commercials — and many have probably included boasts about how the vehicle is highly rated by J.D. Power.

So, just what (or who) is this J.D. Power, and why do its ratings matter?


How it began

J.D. Power is a market research firm started by James Davis Power III in 1968. Part of Power’s research involved sending out surveys to new-car owners.

These completed surveys were a valuable source of information about the experience of purchasing and owning a vehicle. They could also be used to identify problems that buyers were experiencing with specific models.

Eventually, automakers realized how useful Power’s research could be and began paying him for it. As his company grew in prominence, automakers also started using its survey ratings as a way to market their vehicles.

J.D. Power sold his company to McGraw-Hill in 2005, and today the company is owned by XIO Group. But his name still carries a great deal of clout — especially through the company’s two key measures of quality.

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J.D. Power ratings

GMC Yukon wins Best Premium SUV in J.D. Power's 2017 Mexico Vehicle Dependability StudyJ.D. Power rates vehicles using results from a pair of surveys.

The Initial Quality Study quizzes vehicle owners about problems they encounter over the first 90 days of ownership. This survey includes hundreds of questions that cover eight categories: vehicle powertrain, driving experience, exterior, climate controls, seats, features/controls/displays, audio/entertainment/navigation, and overall interior.

The Vehicle Dependability Study asks owners similar questions, except about problems they encounter over the first three years of ownership.

J.D. Power compiles the results of these surveys and uses them to rank a wide range of vehicles every year.

Over time, these vehicle ratings have become hugely influential — eagerly pursued by automakers and highly regarded by potential buyers. However, J.D. Power’s approach has also been criticized by companies that aim for more objective quality ratings.

It’s important to keep in mind, though, that J.D. Power ratings aren’t necessarily meant to be objective. Customers who fill out the survey often identify actual malfunctions, but they can also report aspects of the car that they have a difficult time using or just don’t care for — even if nothing is actually broken. J.D. Power takes both types of response into account when rating a vehicle.

What J.D. Power aims to do is measure customer satisfaction — the positive or negative experience of owning a vehicle. Since our buying decisions are so often subjective, based on intangible desires and needs, this ends up being an approach that resonates widely with consumers.

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Sources: Vox, Jalopnik