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Tire Cost Analysis


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You’ve read Tire Rack’s test reports, consumer reviews and survey results, but still can’t decide between your top tire choices. It’s an important consideration because tires play an important role in your vehicle’s safety, operating costs and fuel-efficiency and you’ll be riding on your decision for years to come.

Tire traction, treadwear and rolling resistance are determining factors, too. So much so that the State of California and the U.S. National Highway Traffic Safety Administration are currently developing new tire rating standards that will better communicate tire capabilities to help consumers make more informed decisions about the tires they might purchase.

For many, the initial purchase price is first and foremost on their mind, though. But sometimes drivers can actually spend less by paying more.

Total Cost of Ownership (TCO)

You may have heard of Total Cost of Ownership (TCO) before, you probably thought of it as an accounting practice used by big businesses and corporations. TCO can also be used by consumers to help them compare long-term direct and indirect costs associated with multiple options offered by similar products or services.

Initial tire cost is a big part of the decision, but consumers should also consider three operating costs their tires influence over their lifetime:

  1. Initial purchase price/installation costs
  2. Vehicle fuel economy
  3. Treadwear cost per mile

We’ll use the new Michelin Defender Standard Touring All-Season tire as an example. Michelin established lofty goals for their new tire compared to the popular HydroEdge line it replaces. They required better all-season traction (achieving 15% more grip in snow) and enhanced fuel-efficiency (17% lower rolling resistance) while retaining long wear (backed by a 90,000-mile warranty*). When comparing popular P215/60R16 95T options, a set of Defender tires costs about $600.

Initial Purchase Price/Installation Costs

Fortunately, for many of today’s vehicle applications, tire manufacturers are producing tires that can reduce a driver’s total cost of ownership, while possibly making tire buying for the family vehicle a one-time proposition. Purchasing longwearing tires reduces how often new tires will have to be purchased and installed. Considering that mounting and balancing costs typically range from $60 to $100 per set, purchasing tires that project to last as long as you’re planning to keep your vehicle will eliminate having to buy additional sets of tires and pay installation costs multiple times. And even if you sell your vehicle earlier than planned, there will be more remaining tread depth to sell to prospective buyers.

Vehicle Fuel Economy

Defender’s 17% lower rolling resistance will save an estimated 2% in fuel costs throughout the tires’ lifetime compared to the HydroEdge. For a typical driver averaging 30 mpg for 15,000 miles a year, Defender tires will help them save 10 gallons of fuel per year (an approximate $40/year savings) and about 60 gallons of fuel during their six-year lifetime (for an estimated $240 in fuel savings). So lower rolling resistance tires like Defender may cost more to purchase initially, but their greater fuel efficiency will payback on that investment for the driver.

Treadwear Cost Per Mile

Which set of tires costs the least?

  1. $400 set designed to last 60,000 miles
  2. $500 set designed to last 75,000 miles
  3. $600 set designed to last 90,000 miles
  4. All of the above

While differences in initial cost make the answer appear obvious, all of the above is correct when treadwear cost per mile is considered. All three sets of tires offer the same cost per mile, it’s just that Defender tires offer an additional year or two of service compared to the others for America’s 15,000 mile a year drivers.

Total Cost of Ownership

While there’s no doubt that vehicle depreciation, insurance premiums and mechanical repairs costs associated with buying, driving and maintaining a vehicle have gone up over the years. The U.S. IRS established 55.5 cents per mile as the standard mileage rate for vehicles used for business in 2012.

However, high-quality, longwearing tires may be the real value in the equation, as they will cost drivers less than a penny per mile for their treadwear.

Sometimes drivers can spend less by paying more.

*Tire Rack recommends drivers consider replacing their tires when they reach 4/32” of remaining tread depth if wet roads are expected in their future.

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