J.D. Power: Buyers Act on Preconceived Notions

Recently, we looked at a study conducted by Consumer Reports that tries to determine the choices buyers use when they select a new car. Fresh off the heels of that, J.D. Power has released their own annual survey that also looks at the same thing, albeit with a focus on why consumers either avoid or reject models.

The results of the J.D. Power study are stunning. More consumers make decisions on preconceived notions about a brand’s quality (43 percent) than on actual reviews and ratings (38 percent) that offer concrete data on issues such as quality. An even smaller percentage (14 percent) base their decisions on prior ownership of a make or model. In short, once a car has a certain reputation, it sticks even when there’s evidence to the contrary.

“The fact that so many new-vehicle buyers may be basing their opinions about quality and reliability on pre-conceived notions, rather than concrete information or data, demonstrates how important it is for automakers to promote the quality and reliability of their models,” said Jon Osborn, research director at J.D. Power and Associates. “For some brands, namely those that have created marked improvements in their quality and reliability in recent years, it’s even more vital to tell their improvement story, rather than just waiting for perceptions to change over time.”

The study also found that gas mileage/fuel economy were the most important reason buyers cite for purchasing a particular vehicle model in 2012, surpassing the influence of other key reasons such as reliability, the price of the car, or ability to get a deal and exterior styling. This even surpassed consumer reports in some cases.

That’s a different result that we saw with Consumer Reports, where fuel economy didn’t even crop up as a major key feature for most shoppers.

Being considered an American company was also key, according to J.D. Power. The study also found that the percentage of buyers who avoided import models because of their origin has increased to 14 percent in 2012 – the highest level since the inception of the study in 2003. Conversely, the percentage of buyers who avoided domestic models due to their origin has declined to 6 percent, a historically low level. The effect of customer service at the dealership was not measured.

The study was based on responses from approximately 24,045 owners who registered a new vehicle in May 2011, and took place between August and October 2011.

What Car Factors Are Considered in Insurance Rates?

Do insurance policies base their rates on the same factors drivers do? Of course, underwriters are subject to fallacies just like other people. In an increasingly automated world, insurance rates are calculated based on a range of factors including what car you drive.

Insurance algorithms look at the replacement cost of your vehicle. They also look at the safety ratings and any additional safety features your car may have. Insurance premiums may go down, for example, if you have collision warnings or prevention. 

For the most competitive annual premium, your current insurer may offer loyalty and other similar discounts. Don’t automatically assume your current company is giving you the best price? Clean driving records are crucial. In an increasing number of cases, insureds are also lowering their rates using telematics programs. In some cases, insurance agencies are offering incentives to switch carriers in the form of lower insurance costs. 

In our experience, customers shopping for an auto policy do look at insurance ratings and, in particular, ratings from other customers. Especially with rising gas prices, many drivers are price sensitive, responding to any perceived rate increase. To see the difference for yourself, enter your zip code in our calculator and see what insurance quotes are available.

We can compare basic liability coverage with collision coverage. We can also get quotes on the same coverage with a set collision deductible from different companies. This way, you can make a truly informed decision on our auto insurance without spending hours searching for an insurance expert.