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USED vs. NEW? Safety first

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AKRON—As prices for new tires continue to increase and the economy remains unsteady, more motorists are trying to cut costs wherever possible while possibly looking toward more eco-friendly options.

And that means they're shifting their attention and consideration, in some cases, to buying used tires.

“Everybody wants to recycle, and there is a large group of tires that are used that still have life left in them,” said Kurt Oldendorph, manager of Alton, Ill.-based Drake Tire & Auto Service. “It's the same way as a used automobile.”

While operators of landfills look for ways to reduce the amount of tires going into the ground—and environmentally concerned citizens push for better ways to recycle them—Mr. Oldendorph said many tires eventually will end up piled up somewhere or in the ground. A good way to prolong their worth is by selling safe, good-quality used tires.

“I think it's a big opportunity,” he told Tire Business. “People with limited incomes that can't afford the new ones, somebody who has a newer vehicle, let's say 50,000 miles on a Goodyear tire and they damage one, they don't want to really put a brand new (tire) on because of the tread depth difference.

“And we've got a good used one that matches those three,” so the vehicle owner can end up with a matching set “and they save a bit of money that way.”

Rob Lyln, owner of Excelsior Springs, Mo.-based Rob's Used Tire, shared a similar sentiment on why he decided to open his shop in May 2012 and specialize in selling used tires.

“Well, I worked at a new tire place for years and we would get 10 or 12 calls a day for used tires and we never had any.... With the price of new tires over the past several years going up, I kind of put two and two together and decided maybe the world was ready for used tires,” Mr. Lyln said.

At Dayton, Ohio-based Neace Tire, owner Steve Neace said the shop got its start selling used tires from day one, when his father first opened the business in 1958, and it has stayed on that path ever since.

He said the shop is in a more economically depressed area and his dad saw a need for what he called gently-used tires.

Scott Musser, owner of S&S Distributors L.L.C. in Forest Park, Ga., said that his company distributes 10,000 used tires a week, so there is clearly a market for them. What people may not realize, he added, is that “when you're driving your car right now, you are driving on a used set of tires. That tire has 30,000 miles on it or 10,000 or 15,000 miles on it. I sell used tires with less mileage on them than what you are driving now.”

Essentially, he continued, every tire in America is used because—just like a car—once they're driven off a lot, they're no longer new.

Mr. Neace said his dealership has seen a dramatic increase in sales of used tires, which have always been his store's predominant product. But the business also has experienced issues going up against such competitors as Wal-Mart Stores Inc. and its Sam's Club unit, Costco Wholesale Corp., etc., because of their low prices for new tires.

“I think the last couple of years especially, we've definitely sold more used tires than we have new,” he said. “It's really been challenging lately to keep pace with the new tire side of things. We used to do 25-30 percent of our business was new...but it's definitely fallen off in the past couple of years. It's in the 15-percent range (new tires). But it's definitely noticeable.”

Drake Tire's Mr. Oldendorph has seen other trends driving used tire sales, but said he believes it's an availability issue rather than an economic one.

Several years ago when the federal government promoted the “Cash for Clunkers” program, he said a lot of tires that normally would have cycled through the industry just went away—scrapped with the vehicles.

“It's not so much that it was a bad thing,” Mr. Oldendorph said. “It's just that with the sizing, we're at the transition (point) where the (15-inch) and 14s are starting to go away,” but there are still a number of cars on the road that need those sizes, so “everything's drying up.”

Mr. Oldendorph said he thinks every region and every situation is different, but that more people are starting to consider used tires as an option. Customers who “probably would have never thought about putting a used tire on but are now thinking, 'I've got two kids in college, two cars needing work done. How can I save?'

“I think it's an option.”

Mr. Neace said one area in the market where he has especially seen an increase is in Neace Tire's sales of used high-performance tires. “We sell a decent amount of those.”

The typical customer?

Perhaps a person who was doing well six or seven years ago but has hit some rough times. Instead of buying a new tire that might cost $250 or more for his or her BMW SUV, that person is “looking for anything he can save money on,” Mr. Neace said.

“So he's more willing to consider a used tire. That's the thing we can really help save customers money on, if we sell them a gently-used version for...less than half the cost of new tires. There's definitely a market there.”

On the other hand, Mr. Oldendorph said he has seen an opposite effect when it comes to the SUV tire market because many of those vehicle owners are not driving them as often, so the tires are not getting worn as quickly.

“That (market) has slowed down almost to a whisper because people aren't driving the bigger SUVs,” he said. “They may still own them, but (the SUVs) spend more time in the driveways” as owners instead get smaller cars to drive during the week and only drive their SUVs on weekends.

Customers also have become more selective in the number of tires they're purchasing, opting for a single used tire, a pair or set of four, depending on need.

“Our average sale is two tires,” Mr. Neace said. “I really haven't seen an increase in the number of customers who are purchasing just one.

“But we definitely have a big chunk of our business that is people coming in on that temporary spare that are just looking for a nice, good-conditioned used tire to put on their vehicle and save some money.”

Mr. Oldendorph said Drake Tire sees a lot more single tires or pairs being purchased. “You know if somebody's got an older car that they're not sure if they are going to keep,” they may be looking for something to get them through the next six months.

Rather than put a new set of tires on it then end up trading in the vehicle, he said, they'll often choose used tires. Or perhaps they hit a curb, blew out a tire and just need a cheap one so they can get home.

Mr. Lyln said sales among singles, pairs and sets of used tires at his dealership break down to a third for each—something he did not anticipate when opening the store less than a year ago.

All four shops contacted by Tire Business have their own way of scrutinizing used tires—through a series of air tests, checking for any kind defect or previous repairs, tread depth inspections, etc.

Rob's Used Tire offers a no-fault warranty on the tires depending on the grade. “We warranty all of them and (offer) free road hazard (on) all of them,” Mr. Lyln said. “So it's a no-fault warranty, two, four or eight weeks, based on grade.”

Mr. Oldendorph said Drake Tire provides a 60-day unlimited warranty that covers “everything. If they have any kind of issue, any kind of problem, for 60 days we will replace (the tire at) absolutely no charge.”

In light of the Rubber Manufacturers Association's considering re-introduction of a bill it floated last year to keep unsafe used tires off the road—and perhaps limit their sale—used tire sellers agreed that standards should be set.

“It's just (a matter of) what kind of condition the tire is in,” Mr. Musser said. “There needs to be parameters on what people out there (are selling).... You have some people out there selling bald tires.... I don't.

“We sell a good grade tire. Everything we sell is basically a half grade or better.”

Mr. Neace said he thinks that a self-policing system could work; however, he has seen competitors who do not have the same standards he does.

Mr. Oldendorph said he could support used tire legislation “as long as the bill is done in the right light.” However, he added that he'd hate to see legislation passed that would end up barring him from selling any used tires. “I think it would be a huge waste.... It would be like saying, 'OK, if your car hit 100,000 (miles) you have to turn it in.'”

He said he also sees people taking home their own used tires in attempts to sell them on websites such as Craigslist, and then returning them in a week because it was too much of a hassle.

“I do see that trend—where everybody wants to be a salesman,” Mr. Oldendorph said.



To reach this reporter: jkarpus@crain.com; 330-865-6143.
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