JD Power: Vehicle Complexity Complicates Auto Valuation

The number of unique vehicle configurations sold in the U.S. surpassed 600,000 in the 2025 model year, creating a growing challenge for auto insurers as they work to capture the configuration and replacement value of modern vehicles.

JD Power shared that assessment in a new report, warning that rising vehicle complexity—combined with a strong used vehicle market—is leading to “a widening gap between the values insurers assume during underwriting and the costs they ultimately face when repairing or replacing vehicles after a claim.”

The global data analytics and consumer intelligence company said that because automakers now offer a wide range of factory-installed options, packages and custom features, two vehicles with the same year, make, model and trim can have vastly different original values.

For example, a 2024 Ford F-150 Lariat 4WD SuperCrew with a 5.5-foot bed could sell for $69,630 with standard options, while a fully optioned version could climb to $84,465, according to the company’s data.

JD Power said the shortened “squish VIN” identifier many insurers rely on when building underwriting models or quoting policies provides basic information but lacks the detailed configuration data needed to accurately assess a vehicle’s full replacement value.

“For insurers, this creates a consequential underwriting blind spot,” the report said, noting that without the full 17-digit VIN and the corresponding OEM build data, carriers may not know the exact configuration they are insuring.

At the same time, used vehicle prices remain elevated. JD Power reported the average used vehicle retail price has reached $29,488, up more than 20% over the past five years. The company attributed much of the increase to supply shortages caused by pandemic-era production disruptions, which limited the availability of late-model used vehicles entering the market.

Traditional valuation models have long relied on the assumption that most mass-market vehicles depreciate roughly 20% per year, the report said, but these recent market dynamics have disrupted those patterns.

Compounding the issue is the rising cost of repairs. While rapidly evolving vehicle technology improves safety and reduces the likelihood of severe accidents, even minor accidents involving vehicles outfitted with sensors, cameras and radar modules can require costly replacements and complex recalibration procedures, the report said.

“For an insurer, moving from generic VIN decoding to precise, configuration-level data transforms the business from reactive to surgical,” the report said. “As vehicles have become ‘computers on wheels,’ with significant price variations, knowing the exact build data—not just the year, make, and model—is the difference between profitability and a loss ratio spike.”

Last month, Reuters reported that automakers are offering relatively few budget models and filling showrooms with bigger, more upscale models—pushing the average new U.S. vehicle price to around $47,000. That marked a 40% increase from December 2018, research from JD Power shows.