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J.D. Power and Associates Reports: Vehicle History Reports Are Becoming Increasingly Important to Used-Vehicle Buyers

Many Buyers Look to Previously Owned Hybrid Vehicles to Combat Higher Fuel Prices

WESTLAKE VILLAGE, Calif., May 10 -- As last year's hurricanes cause concern about flood-damaged vehicles potentially appearing on the market, vehicle history reports are becoming an increasingly important tool among used-vehicle buyers, according to the J.D. Power and Associates 2006 Used Vehicle Sales and Certification (UVSC) Study(SM) released today.

The study, now in its fifth year, finds that 34 percent of used-vehicle buyers report obtaining a vehicle history report (VHR) before purchasing their vehicle-up from 30 percent in 2005. Additionally, 57 percent of respondents say they would refuse to purchase a used vehicle without a VHR -- up from 53 percent in 2005.

"Vehicle history reports are an inexpensive way to ease the concerns of consumers about potentially buying a vehicle that may have been heavily damaged in a hurricane or other natural disaster," said Jane Crane, director of automotive retail research at J.D. Power and Associates. "Approximately 30 percent of manufacturer franchise dealers are opting to provide vehicle history reports to potential buyers at no charge. This gesture of goodwill can go far in earning the buyer's trust by showing that the dealer has nothing to hide."

Another way consumers often alleviate the fears associated with buying a used vehicle is by purchasing a manufacturer-sponsored certified pre-owned (CPO) vehicle. Consumers typically pay an average premium of $1,680 for CPO vehicles, which have passed through extensive inspections and often include extended warranties. However, the study finds that certified used-vehicle buyers are less satisfied compared to 2005 with the price paid for the vehicle.

"In light of the large incentives many manufacturers were offering buyers of new vehicles in 2005, it may have been harder to convince used-vehicle buyers that this premium was worth it," said Crane. "Dealerships have to work hard to communicate the value of certification to their customers and have strong policies in place to follow through on CPO warranties. This can go far in keeping customers satisfied, which increases the likelihood of the customer recommending the dealer to others and returning to the dealership for future vehicle service."

With fuel prices continuing to rise and sales of new hybrid-electric vehicles increasing every year, many consumers are turning their attention to used hybrid vehicles. The study finds that 44 percent of late-model used-vehicle buyers are willing to consider a pre-owned hybrid-electric vehicle rather than a traditional gasoline-powered vehicle, even at an additional cost. Major concerns that used-vehicle buyers have with considering used hybrid-electric vehicles are the estimated higher maintenance costs, reliability, and the life span of the vehicle's battery pack.

"Previously owned hybrids are perfect candidates for certification programs, where in-depth inspections and longer warranties help alleviate the concerns of buyers about purchasing used hybrids," said Crane.

The 2006 Used Vehicle Sales and Certification Study is based on responses from more than 12,800 used-vehicle owners who purchased a 2001 to 2006 model-year used vehicle that was registered between September and October 2005.

        Five Tips to Improve Your Used-Vehicle Purchase Experience

  1.  Consider buying a certified pre-owned vehicle.

Certified pre-owned (CPO) vehicle programs typically select used vehicles in excellent condition with low mileage and put them through a rigorous set of inspections recommended by the manufacturer. CPO vehicles often come with additional warranties from the manufacturer and/or special services for breakdowns, such as 24-hour roadside assistance. Always check the warranty thoroughly before purchasing a CPO vehicle and be aware of any maintenance services offered under the program.

2. Ask to see the CPO inspection report.

During the certification process, CPO vehicles are typically tested on more than 100 factors-including the engine's mechanical condition, electrical system, tires and wheels, and a road test-to ensure high quality. Ask your dealer to see the actual inspection report of a CPO vehicle you are considering to confirm that all inspection steps were meticulously followed.

3. Check with your dealer for special financing offers.

Special financing rates are sometimes offered to buyers as part of a CPO program, so be sure to ask your dealer what may be available on the certified pre-owned vehicle you are considering.

4. Ask your dealer to provide a vehicle history report, or plan to purchase one, if necessary.

Vehicle history reports are an inexpensive way to check the track record of any used vehicle. Vehicle history reports provide customers with a detailed record of the repairs, accidents and recall data within the lifetime of a used vehicle. If your dealer does not offer a free vehicle history report, or you're buying from a private seller, one can easily be purchased online from Web sites such as AutoCheck or For approximately $20, these reports serve as a wise investment to ensure your peace of mind regarding your vehicle purchase.

5. Consider visiting both independent and manufacturer franchised dealerships.

Most manufacturer-franchised dealerships outperform independent used-vehicle dealerships in terms of sales, but when dealing with lower-mileage used vehicles, customer satisfaction with independent dealerships are indeed competitive with regard to price and the paperwork/finance process.

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, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 290 offices in 38 countries. Sales in 2005 were $6.0 billion. Additional information is available at