Wheel-and-tire insurance is a valuable product. There, I admit it.
It’s not the “snake oil” that a cynical friend once espoused it and other F&I products to be. The friend believes the products are big money-makers for the dealership but costly and useless to the consumer.
The dealer’s profit margins are indeed fat. One F&I manager told me if the dealership pays $400 for a policy, it will sell that policy to a consumer for about $800.
But my change of heart toward wheel-and-tire protection is directly attributable to the terrible Michigan roads that have destroyed the tires on my new car.
I bought a 2013 Volkswagen GTI in September. It has about 12,000 miles on it. Yet, I’ve already replaced two tires to the tune of about $300. I have two more that will need replacing soon because they are “cupped.”
I need to replace a bent wheel, too, although it’s still safe to drive on for now. That wheel will cost about $250 or more.
Then there is the cost of my time spent running around pricing aftermarket tires to save a few bucks. And there is the stress from driving on a spare tire until a replacement tire is in stock. There’s no way to assign a financial figure to all the time and stress levels.
F&I managers say some wheel-and-tire policies start at around $500 for a five-year program at brands such as Volkswagen and Subaru. For Infiniti, it can start at $800; for BMW it starts at $1,000 or higher. My dealership told me the five-year package for unlimited wheel-and-tire repair is $600.
But I’m out of luck because the store will only sell that policy at the time of the vehicle purchase.
Had I not waived off the F&I product menu when I bought the car, I would already be ahead of, or at least break-even with, the cost of a wheel-and-tire policy. Not to mention, I probably wouldn’t have wasted so much time on tire repairs.
Given the poor Michigan road conditions, many more tires and maybe wheels will need replacement on the GTI. That’s especially true given the car uses 18-inch low-profile tires with thin sidewalls that do not endure bumps and chuck holes the way a standard tire might.
Now, instead of kicking the tires, I’m kicking myself.