J.D. Power Offers New, Competitive Residual Value Predictor
J.D. Power is launching a benchmark product to help automakers, their finance companies, and other lenders calculate accurate residual values for vehicles when they are first leased. With leasing currently at record levels, and at a time when a record number of off-lease vehicles are coming back into the market, J.D. Power can bring a new perspective to vehicle residual values.
J.D. Power Residual Values will help determine fair, third-party residual values that will later be useful for shoppers in their new- and used-vehicle research, especially since the residual value is a key variable when determining a lessee’s monthly payment and purchase price at the end of a lease.
The new residual value product will be based on real-time retail sales transaction data sourced from the Power Information Network® (PIN) from J.D. Power in addition to data provided by the company’s NADA AuctionNet service plus a wealth of customer-based information from J.D. Power’s Initial Quality Study (IQS); Vehicle Dependability Study (VDS); Automotive Performance, Execution and Layout (APEAL) Study; and Auto Avoider Study.
Deirdre Borrego, senior vice president of data and analytics at J.D. Power, said in a statement that the new product comes out at a time when there are record levels of new lease originations, but also at a time of declining used-vehicle prices when automakers and lenders need to accurately forecast the residual value of a vehicle for better sales and profitability.
According to the company, the new J.D. Power Residual Values product is the first “transparent challenger or third-party model” to be delivered by J.D. Power’s new data and analytics division that includes the NADA Used Car Guide, which was acquired by J.D. Power in 2015 and is now called J.D. Power Valuation Services.