Car Leasing & Winter Tires

It is both interesting and perplexing why the new car automakers have not become heavily involved in a new car winter tire package on the vehicles designated for sale in Canada.  The leasing community which represents the majority of premium and sporty brands of the new vehicles sold in Canada are in need of some innovative and creative solutions regarding winter tires and vehicle leasing.

It is no secret that Canadian weather patterns consists of several winter months that include snowstorms, cold temperatures and snow-packed roads (perhaps parts of southern BC and Vancouver Island could be exempt from this winter statement but let’s agree that Canada is a distinctly winter country).  It’s also very evident that the tires installed on the vast majority of new vehicles sold in Canada would be considered “summer” or “sport” tires despite the “all season” moniker that many tires have. In other words, the OEM tires that new cars are delivered with are not very effective in the snow, ice and temperatures below 5 degrees C.

Jim Matthews, President of LeaseBusters stated; “I can’t speak for all new car buyers but I can certainly relay my experience with customers who take over leases.  The vast majority of lease transfer ‘Buyers’ want winter tires and actually try to negotiate incentives based on their desire for these tires, especially during the winter months”.  Matthews went on to say that “winter tires are not only a fantastic safety feature for vehicles, they’re also a strategically sound lease investment since most original sets of tires will not survive the full term of the lease whereas a set of summer and a set of winter tires should last the full term of most leases”.

Here’s where the automakers and their dealership network can become trendsetters in the leasing community.  Automakers can use their extensive buying power to acquire above average grade winter tires, steel wheels or an upgraded alloy wheel that dealers can order as an optional feature for their vehicles.  OEM’s can also make these features a dealer installed items that can be ordered through the dealership’s parts department. Factory leasing companies can now authorize winter tire and wheel packages to become part of the new vehicle and thus be eligible to be part of a factory lease package (i.e. part of the MSRP, the residual value and the lease payment).

Winter tire and wheel packages should be part of leases but alas, after researching several OEM dealerships, not one automaker offers this factory option however until that happens, many dealerships offer winter tire packages through their financial services office at the time of sale.  This offer allows leasing customers to add a winter tire and wheel package to their lease payment and be protected throughout the term of the lease. As mentioned, this option will allow both sets of tires to survive the term of the lease and the package can be amortized for the full term of the lease using factory subsidized interest rates.  This is not a perfect solution but it is much better than customers scrambling to find their tire size in stock in mid-to-late November and paying a premium for winter tires.

Other significant advantages to the OEM solution winter tire package solution indicated by Matthews:  “Having winter tires as a factory option converts this option as relevant throughout the spring and summer market (when customers aren’t thinking about the winter) and as importantly, it makes the lease more attractive in the lease-take-over marketplace and lastly, the winter tires can also be insured through the end of lease excess wear and tear protection that can be purchased at the lease’s inception”.

In the end, winter tire and wheel packages should become a mainstream factory option for all new cars sold in Canada.  It saves lives, lowers insurance rates and reduces driver anxieties during winter driving; all pretty darn good reasons for automakers to consider or reconsider this initiative.

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