Owning a vehicle comes with several ongoing expenses. Among the bigger ones is tire replacement. Plus, winter tires are commonplace among Canadian drivers considering the harsh conditions of this season. Given the high cost of tires, it may be difficult to come up with the funds upfront to cover the entire cost. Thankfully, tire financing is available.
Key Points
- Tire financing allows you to spread out the cost of an expensive purchase rather than cover the purchase in total upfront.
- You can finance your tire purchase from various sources, including banks, private lenders, online lenders, or credit cards.
- Be sure to consider all costs associated with tire financing, including interest and fees.
Benefits Of Tire Financing In Canada
Tires are a key factor in safe driving. The thing is, they don’t last forever. Good-quality tires often come with a steep price tag, especially if all four need to be replaced.
Here are a few good reasons why you may want to consider financing your tires:
- Spread Out The Cost: Tire financing in Canada allows you to spread the cost of this big purchase over time instead of having to come up with a big lump sum payment upfront.
- More Options: With tire financing, you may be able to afford better-quality tires that may otherwise be too much for your budget to handle.
- Emergency Replacements: If you’re in urgent need of tire replacement but don’t have the money to pay for new ones, tire financing can prove to be a major help.
- Flexible Payment Plans: Lenders may offer flexible financing options customized to your needs and financial situation, including low monthly payments and longer terms.
How Does Tire Financing Work?
Tire financing works similar to other types of loan programs:
Step 1: Apply For Financing
You’ll need to fill out an application, which usually requires that you provide your personal and financial information. You may also be required to supply documents to prove the details included in your application, such as pay stubs, bank statements, and photo ID.
Step 2: Get Approved
The lender you apply with will determine how long it will take for you to get approved, Online lenders tend to provide quick approval, often within minutes.
Step 3: Choose A Payment Plan
Once approved, you’ll select a payment plan that suits your needs and budget. For instance, you may choose a short or long term, which determines how long you have to repay your loan.
Factors To Consider When Financing Your Tires
Before choosing a financing option for your tire purchase, consider the following factors:
Interest Rates
The interest rate you’re charged will have a direct impact on the overall cost of tire financing. Given how important this factor is, be sure to do some comparison shopping to find the lowest rates.
Repayment Terms
Consider the length of the repayment term and the monthly payment amount. A shorter term mean higher loan payments, but less interest paid over the life of the loan. On the other hand, a longer term means more interest paid, but your monthly payments will be smaller.
Fees and Charges
Be wary of additional fees, such as origination fees, prepayment penalties, or late fees. These fees can add to the overall cost of tire financing.
Where To Get Financing For Tires
Fortunately, when it comes to tire financing, there are plenty of options for you to choose from. Below are the different sources for tire financing:
In-House Financing
Some tire companies offer in-house financing to their customers to facilitate their purchases. Other auto companies may offer this type of financing as well. Using in-house financing can be advantageous because you can complete the whole transaction in one place.
Traditional Lenders
Banks and credit unions may be willing to extend a loan to help you cover the cost of new tires. Keep in mind that applying for financing with traditional lenders typically requires that you have good credit. Otherwise, it can be challenging to secure financing and you may need to explore other options.
Private Lenders
Private lenders are available to those with bad credit. If you’re unable to secure financing with your bank, you may have better luck with a private lender. These lenders look at other factors besides your credit, such as your income and assets.
However, you’ll likely pay higher interest for your loan, which will make this a more expensive way to borrow.
Online Lenders
Online lenders tend to be very flexible with who they extend credit to. Also, their terms and conditions can be adjusted to best suit the borrower. Loans Canada works with a wide variety of lenders in the auto industry and can help find you the right match so you can purchase the tires you need.
Buy Now, Pay Later (BNPL)
BNPL services, such as Afterpay or Sezzle, are becoming increasingly popular for covering the cost of an expensive purchase, like tires. These services work by splitting your purchase price into smaller, interest-free payments over a few weeks. You’ll have to see if the retailer you buy your tires from offers this service before using it.
Learn more: The Real Cost Of A Buy Now Pay Later (BNPL) Service
Credit Card
Credit cards are a good way to finance things in the short term, as long as you have enough credit to cover the cost. Before using a credit card to finance a tire purchase, consider how long it will take you to pay off the credit card balance. If it will take you an excessive amount of time, another financing option might be better.
In addition, you could look for a credit card product that has an introductory period with no interest. Using one of these cards would allow you to finance your tires without interest, so long as you pay off the balance within the introductory period. Typically the introductory period is around six months.
Learn more: Credit Card Balance Transfers: How To Come Out Ahead
Tire Financing Requirements
Every lender has unique requirements for their applicants. That being said, you can expect the following minimum requirements from lenders:
- Be the age of majority in your province
- Have a stable, steady income
- Have good credit
Again, you may not require good credit to secure tire financing if you work with a private or online lender, However, traditional lenders may require good credit as part of their loan criteria.
What Tire Brands Can I Finance?
In general, you should be able to finance any type or brand of tire that you want. Brands that you may come across while shopping include:
- BFGoodrich
- Bridgestone
- Goodyear
- Dunlop
- Michelin
- Firestone
- Pirelli
- Continental
Whether the tires are seasonal, summer or winter shouldn’t matter for financing purposes. When shopping, be sure to select tires that work well with your car but are also affordable, and always make sure you stick to your budget.
Learn more: Winter Tire Laws in Canada
How Much Do Tires Cost?
The average cost of car tires varies a great deal depending on factors such as the brand, type, and size. Here are some general cost estimates for different types of tires in Canada:
| Tire Type | Average Cost |
| All-Season Tires | $80-$200 per tire |
| Winter Tires | $125-$200 per tire |
| Performance Tires | $200-$400 per tire |
Don’t forget to account for other costs associated with tires, such as:
- Rims
- Mounting and installation
- Tire Pressure Monitoring Sensors (TPMS)
- Tire storage
These components can add to the total cost of your tire purchase.
How To Save On Your Next Tire Purchase
Financing may be a big help, but you can minimize the sticker shock by doing one of the following:
Time Your Purchase Right
Look out for seasonal sales and promotions, particularly around Black Friday, Cyber Monday, and at the end of the season when dealers have clearance sales. Also, check for manufacturer rebates, which can help you save.
Compare Prices
It’s easy to comparison shop thanks to the internet. Go online and compare prices among local tire stores and online retailers. Many retailers also offer price matching, which means they’ll match a lower price that you found somewhere else.
Buy From Wholesale Retailers
Rather than buy your tires from a dealer or tire shop, consider shopping at a wholesale store, like Costco, which often sells tires at lower prices compared to conventional retailers.
Consider All-Season Tires
Depending on your specific needs, you may want to forgo having two sets of tires (one for winter and one for the rest of the year). Instead, you may consider buying all-season tires, which eliminates the need for separate summer and winter tires.
Buy A Cheaper Brand
Certain brands are more expensive than others. As such, you may want to opt for a brand that offers good quality tires without the price tag that comes with the brand name.
Final Thoughts
Financing your tires can make this purchase easier to afford. That way, you don’t have to wait to save up to cover the full cost upfront, which can be especially helpful in an urgent situation. By understanding the different financing options available, you can find the best solution for your needs.
