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MONEY Magazine: Be Skeptical of Auto Awards

May 25, 2006

Vehicle-rating firms know that the more awards they give, the more their names get publicized. At the same time, car companies get official-sounding endorsements that are more convincing than any ad copy. Be skeptical towards what actually applies to you, says Greg Melville in a MONEY Magazine report.Melville wonders if some studies, while solid in objectivity and methodology, are actually relevant. He suggests that J.D. Power & Associates’ lesser-known Vehicle Dependability Survey is more useful than its Initial Quality Survey (IQS).Telling people how a car holds up after 90 days isn’t nearly as revealing as a study that rates cars that have been driven for three years. Be wary of honors based on popularity instead of specific criteria, such as value, fuel efficiency, safety, roominess or handling, Melville says. These awards may express the majority opinion of a group of journalists who know cars, but they don’t represent people who have actually purchased, driven and lived with the car.Some awards are purely based on emotion. Strategic Vision gives out three categories of awards: Total Quality, Total Value, and Customer Delight. The Total Quality index measures car owners' emotional responses to the vehicles they drive. The Total Value Index does the same, and also weighs those responses against economic issues such as price and resale value. The company says the Customer Delight index “assesses the customers' responses to specific aspects of their vehicles, capturing the strength of the emotional response to what the vehicle delivers." These awards tell you nothing about how you personally will feel towards a car, Melville says.Some awards express little more than loyalty. R.L. Polk & Co.’s Automotive Loyalty Award determines which models are generating the most repeat business. Melville suggests buyers are returning to the familiar or comfortable, or liked the dealer or got a great lease or finance rate.In terms of safety ratings, Melville says with the quality of new cars it is almost impossible for a new car to get below a four- or five-star rating from NHTSA. He suggests comparing those to the more challenging offset front impact ratings devised by the Insurance Institute of Highway Safety.
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