Strong Dependability Levels Can Elevate Residual Value and Purchase Price of Used Vehicles

Buick ties with Lexus to rank highest among nameplates in vehicle dependability -- marking the first time in 12 years that another brand ties with Lexus for the highest-rank position, according to the J.D. Power and Associates 2007 Vehicle Dependability Study(SM) (VDS) released today.

The study, which measures problems experienced by original owners of 3-year-old (2004 model year) vehicles, finds that Buick and Lexus tie for the top rank position with a score of 145 problems per 100 vehicles (PP100). Following in the top five rankings are Cadillac, Mercury and Honda, respectively.

"With three non-premium nameplates -- Buick, Honda and Mercury -- ranking within the top five, and particularly with Buick tying with Lexus for the top rank, consumers seeking a vehicle with strong dependability have good choices at various price levels," said Neal Oddes, director of product research and analysis for J.D. Power and Associates. "Consumers don't necessarily need to pay premium prices to obtain high quality and dependability."



Lexus garners five segment awards -- the most of any nameplate in 2007 -- for the GS 300/GS430, GX 470, LS 430, LX 470 and SC 430. Toyota follows with four segment awards for the RAV 4, Sequoia, Tacoma and Tundra. Ford, Honda and Oldsmobile each capture two awards. Ford models receiving awards are the Crown Victoria and Mustang (in a tie), while Honda earns awards for the Civic and S2000. Oldsmobile models receiving awards are the Bravada and Silhouette. Models by Buick, Chevrolet, Infiniti, Mazda and Scion each rank highest in one segment.

HUMMER is the most improved brand in the study, although it continues to rank below the industry average. HUMMER improves by 65 PP100 since 2006.

The study also finds that vehicle models with strong dependability may retain up to 15 percent more of their value after three years, which may increase their purchase prices when sold as used vehicles. In particular, vehicle models that demonstrate strong dependability lose their value less rapidly compared with vehicles that are not as dependable. With higher residual value, dependable vehicles may command higher purchase prices on the used-vehicle market. In addition, vehicles with higher retained value can be important assets to automakers and dealerships, which may be able to sell a dependable vehicle two to three times during its life cycle.

For example, the Scion xA -- which receives an award in the sub-compact car segment with a score of 207 PP100 -- maintains residual value averaging 71 percent, which is considerably higher than the industry average of 56 percent. After three years, the 2004 Scion xA may retain value up to $10,607 of its initial average transaction price of $14,939, compared with only $8,366 if the model's residual value rate matches only the industry average.

"Automakers may reap numerous benefits from producing dependable vehicles -- not only in higher residual values, decreased warranty costs and opportunities for remarketing their vehicles, but also in higher customer satisfaction and increased likelihood of customers recommending or purchasing newer dependable models," said Oddes. "This is why it is especially important for automakers to successfully launch new vehicle models with high initial quality and appeal -- models that perform well in these regards tend to exhibit particularly strong dependability later in their life cycle."

The study also finds that approximately 65 percent of vehicle owners experience one or more problems that require components to be replaced. Owners who have problems that require component replacements within the first three years of ownership are considerably less satisfied than owners who don't need to replace components. Satisfaction is decreased further if owners are required to replace a major component, such as a transmission, as well as if minor components, such as brake pads, need to be replaced frequently. Component failure and the accompanying decline in satisfaction can lead to decreased customer loyalty. Owners who experience component failure expect to keep their vehicle approximately one year less than do owners who experience problems but do not need to replace components.

"As owners experience vehicle problems -- particularly ones that require components to be replaced -- they are less likely to repurchase or recommend their current model," said Oddes. "Automakers can improve upon customer loyalty by working closely with their component suppliers to monitor quality, since failure of a component ultimately reflects upon the quality of the vehicle brand in the minds of consumers."

The 2007 Vehicle Dependability Study is based on responses from more than 53,000 original owners of 2004 model-year vehicles. The study was fielded from January through April 2007.

Find more detailed findings on vehicle dependability as well as model photos and specs by watching a video, reading an article and reviewing brand and segment dependability ratings at JDPower.com.


2007 Nameplate Ranking
Problems per 100 Vehicles

Buick - 145
Lexus - 145
Cadillac - 162
Mercury - 168
Honda - 169
Toyota - 178
BMW - 182
Lincoln - 182
Subaru - 192
Oldsmobile - 196
Jaguar - 197
Acura - 207
Mercedes-Benz - 212
Infiniti - 215
Industry Average - 216
Jeep - 219
Pontiac - 220
Scion - 220
Ford - 221
GMC - 222
Chevrolet - 226
Hyundai - 228
Mitsubishi - 228
Volvo - 230
Audi - 234
Dodge - 236
HUMMER - 242
MINI - 247
Chrysler - 249
Porsche - 252
Nissan - 274
Saturn - 274
Kia - 288
Mazda - 289
Volkswagen - 298
Saab - 319
Isuzu - 322
Suzuki - 324
Land Rover - 398

Top Three Models per Segment
Car Segments

Sub-Compact Car
Highest Ranked: Scion xA
Hyundai Accent
Chevrolet Aveo

Compact Car
Highest Ranked: Honda Civic
Toyota Prius
Toyota Corolla

Compact Sporty Car
Highest Ranked: Mazda Miata
Mitsubishi Lancer/Lancer Sportback
Toyota Celica

Midsize Sporty Car
Highest Ranked:
Chevrolet SSR (tie) / Ford Mustang (tie)
Toyota Solara

Midsize Car
Highest Ranked: Buick Century
Buick Regal
Mercury Sable

Large Car
Highest Ranked: Ford Crown Victoria
Mercury Grand Marquis
Buick Park Avenue

Compact Premium Sporty Car
Highest Ranked: Honda S2000
BMW Z4
Mercedes-Benz SLK-Class

Entry Premium Car
Highest Ranked: Infiniti I35
Cadillac CTS
Lexus IS 300/IS 300 SportCross

Midsize Premium Car
Highest Ranked: Lexus GS 300/GS 430
Acura RL
Lexus ES 330

Large Premium Car
Highest Ranked: Lexus LS 430
Lincoln Town Car
Cadillac DeVille

Premium Sporty Car
Highest Ranked: Lexus SC 430
Ford Thunderbird
Chevrolet Corvette

NOTE: Models with multiple trim levels are combined for ranking purposes.

Top Three Models per Segment
Truck / Multi-Activity Vehicle (MAV) Segments

Compact MAV
Highest Ranked: Toyota RAV4
Honda CR-V
Honda Element

Midsize MAV
Highest Ranked: Oldsmobile Bravada
Buick Rainier
Toyota 4Runner

Large MAV
Highest Ranked: Toyota Sequoia
GMC Yukon
Chevrolet Suburban

Large Pickup
Highest Ranked: Toyota Tundra
Ford F-150 Heritage/F-150 Lightning
Ford F-150 LD

Midsize Pickup
Highest Ranked: Toyota Tacoma
Ford Ranger
Mazda B-Series

Van
Highest Ranked: Oldsmobile Silhouette
Mercury Monterey
Honda Odyssey

Midsize Premium MAV
Highest Ranked: Lexus GX 470
Lexus RX 300
Infiniti FX-Series

Large Premium MAV
Highest Ranked: Lexus LX 470
Toyota Land Cruiser
Cadillac Escalade EXT

NOTE: Models with multiple trim levels are combined for ranking purposes.


About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

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Source: J.D. Power and Associates