It’s that time of year again around here where it is cooling off and promising snow. I actually want the snow because I love to ski. I grew up in a small town in Northern Ontario where we could actually ski from late November to late March. I remember once getting a “snow day” off school from a freak storm in early June and skiing around town with my friends thinking it was the coolest thing ever. We had to appreciate the snow since we had it for such a big chunk of the year.
I now live in a more southern area of Canada where many people don’t have the same appreciation of snow. Most people around here think that I am loonie when I smile gleefully at the first big dump of snow.
Some also get freaked out and put winter tires on their cars. Ironically, we never used snow tires (as we called them) in my home town where we had so much snow that we didn’t bother plowing or salting much. We just drove on it to pack it down and sprinkled some sand if it got slippery. Instead of snow tires, we just drove really slow, walked, or drove a skidoo. In my case, I walked, wishing I had a skidoo.
Life down here is much more fast paced. Admittedly, I have given into that and put on winter tires. While I was putting them on this morning, it made me think of some personal finance points that are worth passing on and pondering. Yep, manual labour does that to me.
In this post we will examine:
- Are winter tires worth it from a safety perspective?
- Are winter tires a financially viable option?
- Is it worth it to change your own tires or should you outsource the job?
Are winter tires worth it from a safety perspective?
I remember my uncle telling me, “The only thing worth spending money on in a car are safety features.”
He was an engineer and also followed that sentence up with, “All the engineering in the world won’t change the simple laws of physics…… Force = mass X velocity squared.”
He drove a massive Chevy Suburban; really slowly. However, these are definitely true words of wisdom that apply to winter tires.
Winter tires can be worth buying for safety reasons, but they don’t overcome the laws of physics – you still shouldn’t drive fast like an idiot in the snow.
Safety facts on snow tires from the Canada Safety Council:
- They are made of a softer rubber that grips better than all season tires when the temperature drops below 7C. On the other hand, they also wear faster and don’t perform as well in warmer temperatures.
- They have deeper directional treads to channel away snow and slush.
- In -20C on 3-5cm of compacted ice and snow on asphalt, for a car or minivan going 50km/h, the stopping distance is reduced from 165 feet to about 125 feet. So, snow tires make a big difference when it is cold and snowy, but you still have a long stopping distance – and this was only at 50km/h. Source: Government of Ontario.
So, whether snow tires are worth it from a safety perspective depends on how cold your winters are (below 7C) and how much snow you get. They also don’t make up for bad driving habits and they need to be touching the ground to work 😉
Are snow tires worth it from a financial perspective?
Putting aside the fact that your safety and that of your family and other drivers is priceless, snow tires do come at a cost. This is a financial blog, so let’s look at this aspect.
The best winter tires as rated by Consumer Reports, and also not the most expensive, were the Michelin X-Ice Xi3s. They were on sale at Costco for $590 after tax and installed for a set of four for my Subaru Impreza. I have mine mounted on some plain steel rims making it easy to swap them each year – they cost about $100. So, winter tires will set you back some money up front ~$700 in my case.
However, there are two things that offset the cost:
- Most insurance companies will give you ~5% discount. That is about $80/yr in Ontario.
- Using winter tires has prolonged the usable lifespan of my all season tires. They only have about 40000km on them after 4 years, but apparently I am an aggressive driver in the summer. The tread on them is good for summer, spring, and fall – definitely not for winter. I would have had to replace them a couple of years ago, but they are still going strong.
I am not a big driver, so my tires will probably need to be changed out due to age rather than mileage. Tire rubber slowly deteriorates with exposure from sun and heat, lasting 5-7 years or so. Given the lifespan and my insurance savings, my winter tires will just about pay for themselves by the time I need to get new ones. If I count how they prolong the usability of my all season tires, it is even better.
Is it worth it for you to change your own snow tires?
I mentioned that I came up with the idea for this post while changing my tires. That’s right, I am a high falutin’ doctor and I change my own tires. There is a direct link to this and personal finance.
Money is just a vessel to hold value – what is the value of your time and effort?
We exchange our time and effort to make money and we spend money for experiences, services, and stuff that comes from other people’s time and effort. You should deliberately think about what money is worth in exchange for that. For me, changing snow tires is worth my time and effort for the money saved.
Step 1: Know what your time is worth.
This is not what you charge someone for your services. This is what you bring home per extra hour worked.
- Your Gross Income minus your Costs of Work (employees, supplies, transportation, parking, insurance) equals Net Work Income. Add in the value of benefits if you get them.
- Divide this by the number hours worked to get your Hourly Work Income.
- Now you need to factor in income taxes. When you take on a job around the house, it is in addition to your regular paying job. This is important, because the first money you make in a year is tax-free from your personal exemption and the more you work, the less you make per hour as you move into higher marginal tax rates. So, you should figure out the value of your time for jobs around the house at your top marginal tax rate. Subtract income at your highest marginal tax rate from your hourly work income to get your after-tax hourly work income.
I have done this. My after-tax hourly work income as a specialist physician is ~$100/h.
Step 2: Figure out what the job is worth.
This is a combination of the time, skill, and tools required.
Cost for paying someone to change my snow tires:
- My Time: I don’t routinely drive by any service stations. For me to go to the nearest service station would be an appointment and take about 20 minutes round trip and about 30 minutes to deal with the garage and wait around while they do the job. That is 50 minutes of my time. Value: $83.
- Cost to pay the garage to do it: $40 after tax.
- My Time again: After driving 50-100km, you are supposed to get the lug nuts re-torqued. That would be another 20 minutes of drive time and another 10 minutes at the garage. Value: $50.
- Total Cost/Value of Someone Changing My Snow Tires: $173
Cost for me changing my own snow tires:
- Equipment: I already own a car jack, tire iron, portable tire inflator, and torque wrench. They weren’t free. Their total cost was about $200. That was about 10 years ago, but the cost is actually similar still. Also, I don’t just use those tools for changing my car tires, but also for my various other vehicles. When figuring the cost of equipment, you need to amortize that over how long it will be useful and accounting for how much you will use it. In this case, the equipment has cost me about $2.50 per season for the purposes of tire changing on my car and the long-term cost would be even less because they will last for years more and I use them frequently.
A note of caution: This is also a really great way to talk yourself into buying all sorts of tools. When considering buying tools for a job, be honest with yourself. If not, you can end up with an expensive tool that you don’t use much. Or, as commonly happens in my case, my wife and I find more projects for me to do (you know – to make sure that I get my money’s worth out of the tool)…. When faced with an expensive tool that you will only use once, consider renting it. Even better, consider borrowing it. You are really doing the lender a favour – they can now feel good that the tool they never use is being used by someone 😉 Not that I have ever done that and felt that way.
- My time: I am not going to be recruited for an pit crew. It took me just under 45 minutes to change the four tires, check their pressure and re-inflate them as needed. If a task requires special training, you need to factor that time in also. The first time I changed my tires, it took me about an hour between You Tube and my muddling around. I could probably do it in 20 minutes now if I really tried, but I was thinking up this post at the same time. I also leave the torque wrench in the trunk to re-torque the lug nuts after ~50km (or sooner – I have this phobia thing about one of my wheels falling off). That takes 5 minutes. Total cost in my time: $83
- Total Cost/Value of Changing My Own Snow Tires: $85
So, for me, it clearly is worth it to change my own tires.
From a time perspective, it takes me under an hour to change the tires and make the money needed for the required equipment. It takes me a similar amount of time to go to a garage plus another 25min of working at my job for the money to pay the bill on top of that. When I get the wheels re-torqued at the garage, I spend another half hour of my time for what takes me under 5min on my own.
If I had a garage on the way of my normal driving route, it is not as bad, but still favours doing it myself. If I removed all driving time from the equation, it is still 40min of time at the garage plus 25min of work time to pay someone to do it and 50min of my time do it on my own.
What if I made more money at my job and the garage was on my normal driving route? I would have to make $240/h after tax take home pay (~$500/h gross). Wow!
What if I made a more average wage, like $30/h after tax take home pay, and the garage was on my normal driving route? It would be 2h of garage/earning time compared to 50min of doing it myself.
But it is not all about the time/money!
When weighing about whether to do a job yourself or to outsource it, in addition to the money you need to consider:
- The difficulty of the skill required, your desire to learn that skill, and the consequences of messing up.
- The “detestation factor”. My wife and I came up with this one early in our marriage when we deliberately divided chores. This is a multiplier that you apply to the value of having someone else to do a job. For example, cleaning up the aftermath of a dog-poop-nado discovered in the basement would be a factor of 10 whilst taking out the garbage might be a 1.
- The “bragging rights factor”. This is the inverse of the detestation factor. Some things are just fun or very satisfying to do.
How do those modifiers apply to me changing my own snow tires?
In this case, the skill required is relatively low. You can you tube it if you really need to. I did the first couple times. The consequences of a “fail” would be epicly bad, but incredibly unlikely given the simplicity of the task. In my case, I don’t mind the job, although I will say that getting some kneepads has made a big difference in comfort as I have aged. The bragging rights factor of this one is excellent in general. Women dig guy doctors that can change tires. The only thing hotter is a female doctor that changes her own tires. Seriously. It is very satisfying to blow up stereotypes.
On the other side of the time equals money equation is the fact that if you save money with good use of your time, you have more money to spend to by you time for the things you value more as nicely put by Physician on FIRE with his post about Money Used to Buy Me Stuff. Now It Buys Time.
I am still looking for a way to justify putting a set of these bad-boys on my car. I actually have a set on my Polaris RZR, but that is another story.
I hope that I have given you a few things to think about and take action on:
The only thing worth spending money on for a car are safety features and all the engineering in the world does not change the laws of physics. Winter tires are a good example of this .
Your safety is priceless, but snow tires can also be viable from a financial perspective.
When faced with whether to do a job yourself or outsource it, know what your time is worth and critically think about what to do.
Should you get snow tires? Should you change them yourself each season? Whatever the case, drive safe.