- The Washington Times - Friday, August 29, 2008

A recent study has good news for cash-strapped consumers who want to downsize their means of transportation and buy a small car or truck.

While small cars were once equated with being “cheap” and of poor quality, that is no longer the case, according to the 2008 Vehicle Dependability Study from J.D. Power and Associates, a global marketing information services company headquartered in Westlake Village, Calif. Small cars actually hold up better over time than large cars and large sport-utility vehicles, the study found.

Consumers can feel at ease if they downsize, said Neal Oddes, director of product research and analysis for J.D. Power, because these vehicles are standing the test of time, don’t require a lot more trips to the service department for repairs, and will hold their resale value.

Power has two studies that look at a vehicle’s quality. Its Initial Quality Study looks at problems owners report with their vehicles after 90 days of ownership, while the Vehicle Dependability Study measures the problems experienced by the original owners after they have owned a vehicle for three years.

The difference in a vehicle’s quality between the number of problems it has in IQS when new and its problems three years later in VDS is called the “deterioration rate.” Both studies express the results in the number of problems per 100 vehicles.

This year’s VDS is based on responses from more than 52,000 original owners of 2005 models. It found that compact cars and compact sport-utility vehicles/crossovers have about 75 percent more problems in the third year of ownership than during the first 90 days, Oddes said. That is the same as the industry average.

If you don’t think a 75 percent “deterioration rate” sounds good for the industry in general or smaller vehicles in particular that is understandable; but you are mistaken. The deterioration rate of large cars and sport-utilities/crossovers is 122 percent, almost twice the industry average.

Specifically, the deterioration rate from initial quality to long-term durability is 82 percent for subcompact cars, 78 percent for compact cars and 62 percent for compact sport utilities/crossovers.

The more problems a vehicle has, the greater the chances are for those problems to negatively impact a vehicle’s resale value.

“So this means direct money into the consumer’s pocket as well. There are benefits for the consumer all the way around,” Oddes said.

The Power study also ranks the top three individual models in 19 vehicle segments. The highest ranked subcompact car is the Hyundai Accent. The Toyota Prius is the highest ranked vehicle in the compact car segment.

In the compact SUV/CUV segment the Honda Element and Toyota RAV4 are tied for the highest ranking.

For those of you who don’t want to wait three years to figure out how reliable a vehicle you want to buy is going to be, Oddes says there is a strong statistical correlation between the IQS and VDS studies. This means vehicles that launched in 2005 with few problems in the IQS are still holding up well today and those that launched poorly are not.

In 2005 the Prius, for example, won in the IQS compact car segment and three years later has won its segment in VDS as well. The Buick Century, which is no longer being manufactured but is still in the used-car market, received the top award in the midsize car segment in the 2005 IQS and did the same in the 2008 VDS.

However, there are always exceptions and one is the Scion tC. In the 2005 IQS it received an award in its segment. In this year’s VDS, the tC quality has deteriorated by 133 percent, Oddes said.

The study also finds that long-term vehicle quality has improved by 5 percent industry-wide in 2008 compared with 2007; that means there was an overall decrease of 10 problems per 100 vehicles. More than 60 percent of the 38 brands included in the study improved from last year.

And, for the first time, Hyundai is doing better than the industry average in VDS. It has been above the industry average in initial quality since 2004 but only now has its gains in initial quality shown up in long-term durability. The industry average is 206 pp 100 and Hyundai has 200 pp 100, and the company has moved up in the rankings from 21 last year to 13 this year.

“Every single one of the models in Hyundai improved over last year,” Oddes said. More details and rankings are available at JDPower.com.

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