Saturday, November 26, 2011

The Price of Tires

The price of tires has skyrocketed in recent years.   Not a few years ago, most tires were under $100 each.  Today, tires as high as $300-$400 apiece are not unusual.  What is going on here?

I recently ordered a set of Yokohama tires from The Tire Rack.   It was a hard decision to make, what with all the tire makes, models, and sizes.  I had been using Michelins on the X5, and they have lasted 50,000 to 60,000 miles each, but at $321 a tire, retail, (P255/55 R18) they are very expensive tires, indeed, and the price has increased by nearly $100 a tire since I put the last set on, less than five years ago.

(The price, at WalMart, of all places, is a staggering $361 per tire, plus mounting and balancing.  Always the low price?  I think not!).

So I decided to go with a less expensive tire, which hopefully won't be a bad mistake.  I had a set of Yokohamas on the SHO and they worked well.  They have a good tread life rating, good traction rating, and best of all, they were about $154 apiece, as opposed to the $268 that the Michelins would run, at the Tire Rack.  And likely these will be the last tires I put on this car, as it creeps up toward the 200,000 mile mark.  For longer trips, I think I will get a newer, less esoteric car in a few years.

I have had good luck with The Tire Rack, by the way, and while there are cheaper tires out there on the net (no-name brands from China, usually sold to the Bling Rim crowd), Tire Rack prices are very competitive and they the Amazon.com of tires (and Amazon sells tires, too, by the way).  Plus they have people working there you can talk to who are very knowledgeable.  Shipping was very reasonable, about $59.80 or about $15 per tire.

By the way, the consumer reviews on the site are all over the map, and parsing the reviews was hard to do.   As one reviewer noted, nearly all the tires had stellar reviews ("these are the best tires ever!") and crappy ones ("these went bald in 9,000 miles!").    Some of the reviews were suspect - for example, I can't imagine a set of Michelins going bald in 9,000 miles, unless you had severe front end problems.  Other reviewers complained about "cupping" wear, which is caused by bad shocks, not bad tires.  Filtering out those reviews, as well as the ones with bad grammar and poor spelling, you can sort of parse out what is going on.

I chose the Yokohamas as they seemed to be the best balance between treadwear, price, and review ratings.  We'll see if this was a bad choice or a good one.  But the bottom line was this:  I didn't want to spend $1200 on a set of tires for a $9000 car.  It just doesn't make any sense.

On the other hand, there were cheaper tires out there, but their treadwear ratings were in the low 300's.  While I don't expect the Yokos to go 50,000 miles, they probably will be on the car when I sell it.

And I can see, in the near future, that people may end up junking a car because the replacement cost of the tires exceeds the book value.  Oh, brave new world!

So why are tires so expensive these days?  I think a number of reasons:



1.  Proliferation of Tire Sizes:  In the olden days, we had three tires sizes:  13", 14", and 15", which were usually for compact, mid-sized, and full-sized cars, respectively.  Few sizes meant that volume production could lower prices.  And since dealers needed only to stock a few sizes, they could cut overhead as well.  Today, we have so many Prescription Tire Sizes that it isn't funny!

2.  China Tariff:  The Obama Administration signed a Tariff Order recommended by the ITC which added a 35-55% tariff to Chinese Tires.  While this "only" affected the price of Chinese tires directly, the net effect is to reduce price pressure across the board.  Since cheap Chinese tires are no longer cheap, other manufacturers don't need to cut tire prices to stay competitive.  By the way, if you think slapping import duties on Chinese goods is a good way to "save jobs", go shopping for tires sometime.  Imagine everything you buy going up in price by 50% in just a few years.  Fun, eh?"


3.  Price of Oil:  Oil is a component in tire construction, and the price of oil has gone up in recent years.

4.  Rubber Shortage:  Apparently, there is a rubber shortage in India.

5.  Demand for Cars in China:  The Chinese are buying cars like mad, and it is the world's fastest growing car market.  And all those cars need tires.  So the demand for tires is skyrocketing, worldwide, as well.


So what can you do, to avoid sticker shock at the tire store?  A number of things:

1.  Get a car with standard tire sizes:  Esoteric tires sizes or "sport" package high-performance tires are always more expensive than standard passenger car sizes.  15" tires were the most common size, until a few years ago.  16" and 17" are now becoming the norm.  18" is an oddball size, and 19" and 20"+ sizes are also more esoteric.  Ultra-low profile and "staggered" and unidirectional tires are also harder to find and thus more expensive.  When shopping for a car, avoid oddball tires and high-performance tires.  Most people don't need or want them!

2.  Rotate your tires regularly and check for unusual wear:  Many cars wear tires in one spot or another, and rotating tires will even wear and extend tire life.  If you find the front tires are "scrubbing" on the inside or outside, have your alignment checked. Cupping or other unusual wear is often a sign of suspension problems and can eat up perfectly good tires in short order.

3.  Check Inflation regularly:  Even though new cars have tire pressure monitors, be sure to check your tire pressures regularly and make sure they are to factory spec.  Under-inflation is the #1 tire killer!

4. Shop Around and Shop Online:  Online tire sites like Tire Rack have prices that are far below the "come on" prices that many tire shops charge.  Most chain stores won't quote you a price until they have your car up on the rack - they hope to "persuade" you to buy whatever they have in stock, rather than let you shop around.

5. Avoid Super-Cheap Tires:  Modern tires have tread wear ratings, which are not an exact science.  However, they give you an idea of the tread life of a tire.  Unless you are really in the market for performance tires, look for a tire with a decent tread life and tread warranty.  More expensive tires may be less expensive, in the long run, if they provide more miles of service.  Cheap tires that last barely 30,000 miles are often not worth it.

Myself, well, when I go shopping for my next car, it will be a car that does not require prescription tires, prescription oil (and the X5 takes nearly 8 quarts of it!) a filter that only a few places have, high-octane gas, and parts that are available on a catch-as-catch-can basis.  BMWs have been a fun trip, but I am more interested, at this point in my life, in doing things rather than owning things.

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