If you pay attention to all the various automobile ads on TV, you’d probably notice that just about every make and model of vehicle has won some sort of award from some magazine, or that its been “rated highest in its class” by any number of organizations. But what many people don’t know is that these awards and thumbs-up ratings almost always cost the car companies a pretty penny.
Take as an example Consumers Digest (which has absolutely nothing to do with our kin at Consumer Reports or our benevolent benefactors at Consumers Union). The publication doles out awards for vehicles it deems “Best Buys,” and then charges the manufacturers thousands of dollars just to mention the awards in their advertising.
By its own admittance, Consumers Digest typically charges $35,000 for the first award and $25,000 for each subsequent award. Which means GM, which had 15 vehicles on the Digest’s 2010 Best Buy list, likely paid around $385,000 to Consumers Digest for the right to mention the honors.
Writes the Wall Street Journal:
Consumers Digest Editor Rich Dzierwa said the fees don’t influence its picks, and each winner is described in its magazine. But its Web site displays only the reviews of cars from auto makers that paid a licensing fee. Winners who don’t pay the magazine are listed on the site as winners, but no further information about those models is given.
Then there are very official-sounding things like the U.S. Global Quality Research System study, which Ford has been bragging about since it claims to have received the highest marks of all car makers in customer satisfaction. Only issue here is that Ford paid for this survey and they won’t actually tell anyone how the competition scored.
And of course there is J.D. Power & Associates, who reportedly charge hundreds of thousands of dollars to car makers just for access to their survey results and then charge another big-time fee for the right to mention their awards in ads. Additionally, they provide a separate, equally pricey service where they help car companies make improvements that should result in higher ratings.
Some biggie at J.D. Power stands by the company’s assertion that the survey and consulting sides of the business are separate entities.
“Core to our success is that our clients believe that the research is entirely independent,” he said. “If they felt that you could buy a better score, then the score would become worthless.”
By comparison, there is Consumer Reports. CR purchases all their test vehicles from dealers, does all its own testing and refuses to sell or allow the use of their ratings for use by car companies. Of course, we have to confess that we’re a little biased in favor of their lack of bias.
Regardless, do you think that the amount of money car companies pay to use awards and ratings like those mentioned above casts doubt on the awards’ validity? Is it possible to maintain impartiality toward a company that pays you to rate them?