The vehicle pricing models used by U.S. auto insurers are failing to keep up with the number of ways vehicles are built, creating gaps between expected and actual claim costs, a new report from J.D. Power has found.
More than 600,000 unique vehicle configurations were sold in the U.S. during the 2025 model year, reflecting a sharp rise in customization as automakers expanded options across powertrains, safety systems and trim packages. On high-volume vehicles offering multiple customization options, such as the Ford F-150, the number of possible builds available can exceed 100,000.
Insurers often rely on shortened vehicle identification numbers when pricing policies. These truncated VINs provided basic details but did not include full build data. Without the full 17-digit VIN, insurers did not know the exact configuration they were insuring, creating gaps in valuation that reached roughly US$15,000 ($20,000) per vehicle.
Standard identifiers such as year, make, model and trim did not capture those differences. In one example included in the report, a 2024 Ford F-150 Lariat ranged from about US$69,630 ($94,000) to US$84,465 ($114,000) depending on options -- a spread of nearly US$15,000 ($20,000).
At the same time, shifts in the used-vehicle market added volatility. Average used vehicle prices rose more than 20% over the past five years to about US$29,488 ($40,000), following supply shortages that reduced the number of late-model vehicles entering the market.
In one example cited in the report, a 2024 Ford F-150 was valued at about US$50,965 ($69,000) in the market, but its value was estimated at US$55,165 ($75,000) under standard models, leaving a gap of about US$4,200 ($5,700).
“Traditional valuation models have long relied on the assumption that most mass-market vehicles depreciate roughly 20% per year,” the report states. “However, recent market dynamics have disrupted those historical depreciation patterns.”
