How Tire Financing Works in Canada

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Let’s be honest. Tires are expensive. High-end tires can cost anywhere between $300-$1000 each, and even lower-end tires can cost upwards of $150 each. That means that by the time you install four new tires, you’re looking at a bill between $600 and $4000. Most people would need tire financing or a loan to pull that off.

And if you are a believer in summer and winter tires, you’ll need to double that amount. Not everyone can afford tires, but they are extremely important for your safety. So today, we’ll take a deeper look at how tire financing works so that everyone can afford to drive safely. 

Do I really need new tires?

We all like to cut costs here and there, but tires are not a good place to start when it comes to doing so. Tires are one of the most critical aspects of your vehicle in terms of safety – they are what keeps your vehicle planted on the road.

It’s also your tires that stop your vehicle. Anytime you have to slam on your brakes for any reason (we’ve all had to do it), it’s your tires that keep you from crashing. 

Furthermore, a good set of tires can be your saving grace if you ever encounter bad weather. If you hit the ice, rain, or heavy snow, it will be your tires that prevent you from skidding out.

If you don’t have a good set of tires, you could easily be in an accident. So yes, you really do need new tires whenever recommended by a specialist.

How often do I need to replace my tires?

Unfortunately, there’s no “one-size-fits-all” answer to this question. How often you need to replace your tires will depend on many factors, including how often you drive, how you store your vehicle, and what types of weather and conditions your tires have been exposed to.

Industry standards suggest that you should replace your tires every 6-10 years, but again, this can vary greatly depending on conditions. 

So how do you know when to replace your tires? The key is to keep a close eye on their tread. The tread on your tires can tell you a lot, beginning with their depth. The tread depth is the measurement of the grooves in the tires. Generally speaking, you want your tires to be able to pass the “penny test”. 

To conduct a penny test, first, you need to find the shallowest groove on your tire. Take your penny and place Lincoln’s head (upside down) into the groove. It’s okay if you see his chin, nose, and eyes, but if you can see the top of his head, then it’s time for new tires. 

Age can also impact the safety of a tire. When tires age, the rubber in them begins to change. Things like environment, storage conditions, usage, and non-usage, can all result in rubber changes. This is why it’s recommended that you change your tires at least every 5-6 years regardless of condition. 

What if I can’t afford new tires?

As we’ve already established, tires are expensive – and not everyone can afford to pay for them outright. But the good news is, you don’t have to pay for your tires up front.

Instead, there are several different financing options available to you in Canada. This means that you can cut it down into smaller bills that you pay each month rather than paying the entire bill upfront. Here are a few different ways that you can finance a tire loan in Canada:

1. In-house financing

Depending on which auto company you purchase your tires from, you may be able to find in-house financing. This simply means that the company you are purchasing from will finance your tires for you, and you can pay them back monthly.

In-house financing is a good option because then your entire transaction is completed in one single place. With that being said, not all companies offer this option, so be sure to ask if it’s something you are interested in. 

2. Financial Institution financing

Regardless of what you need finances for, your bank is always a good place to reach out for help. On that note, banks do offer financing for tires. The drawback to this is that you usually need good credit to obtain a loan from a bank. If your credit is poor, this option might not be available to you. 

3. Online lenders

There are lots of online options in Canada for obtaining loans. Websites like Lendmate.ca offer fast, safe, and easy loans. The main benefit of these is the ease with which you can obtain a tire loan.

Online applications are usually quick and easy, and some don’t even consider your credit. With that being said, interest can be high, so you want to make sure you are able to pay back the loan on time. 

If none of the above options work for you, you can always reach out to a private lender. And if a private lender is not an option, you can use a credit card as a last resort.

How does Tire Financing Work?

The exact dynamics of tire financing will differ depending on who you obtain your financing from. With that being said, most lenders will require you to be the age of majority and to have a steady income.

While not the case for all lenders, most will also require you to have strong credit. If your credit is poor, you should expect to pay significantly more in interest rates. 

In terms of choosing your tires, once you have your financing, you can choose any tire brand you like within the price range. Popular tire brands include Michelin, Pirelli, Firestone, and BC Goodwrench, though there are many other brands to choose from as well.

In regards to tire financing, the brand and type of tires you select should not matter.  

Once you have been approved for financing and used the funds to pay for your tires, it is your responsibility to pay back the financier every month. The exact amount you owe each month will depend on the contract you worked out with the lender and will be based on how much you borrowed.

Always remember that you will owe the lender the borrowed amount plus the agreed-upon interest rate. The faster you can pay off your debt, the less interest you will incur. 

In-store Tire Financing

One of the most popular places to buy tires in Canada is from the store Candian Tire. When you buy tires from here, in-store financing options are available. In fact, when it comes to financing your tires, Canadian Tire has a great plan. 

Why is Canadian Tire financing such a good option? Because, unlike many financing options, Canadian Tire offers plans based on no interest and no fee! As long as you pay your monthly payments complete and on time, you will not incur any interest on your financing.

This works out to be a win-win situation – you don’t have to pay interest, and Canadian Tire gets your business. You can apply for tire financing with the Canadian Tire Triangle Card either online or in-store. 

Of course, many other companies also offer in-house financing with low fees and/or no interest. The key is to shop around and find a financing plan that best meets your needs. 

In conclusion, when it comes to cutting costs – don’t do it with your tires. Failing to replace your tires when needed can be very dangerous and put you and others at increased risk of an accident. If you can’t afford tires outright, apply for a financing plan that you can pay back monthly. 

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Chalene

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Avid researcher, freelance writer, and personal finance enthusiast passionate about financial education and literacy.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.