Tire Road hazard

[nge]

We have been growing tire sales for the last few years and have considered offering in house road hazard warranty.  For the shops offering road hazard was curious what your pricing model is and how your claim process works.  Any insights would be greatly appreciated!

[tyrguy]

We include a RH with every tire we sell. It's included in our price. It's a straight proration  from day 1 and continues until the tire is down to the last 2/32s. Besides the prorated price the customer pays for mounting and balancing. We also offer an optional Tire Pros warranty for $4.95 a tire that is nationwide and no proration for the first year.

 

[nge]

Can you share some more details about how you factor it in?  Right now are tires are a flat markup.  What is your markup like on tires and then how do you factor in the road hazard on top of that into the tire cost?

[tyrguy]

Who says tires have to be a flat markup. Although we use a few tire matrixes for our program brands, they only vary by a few points. But here is a generic tire matrix we use. Cost  0-49.99 /63,  50-74.99 /66,  75-99.99 /69,  100-124.99 /73,  125-149.99 /74,  150-174.99 /76 and so on. Resulting retail prices include valves, mount, balance, alignment check, taxes, lifetime rotation, balancing, flat repair and road hazard. Obviously when quoting tires it's important to point out everything that's included. So, last week the average tire that went out of here had an average invoice cost of 97.89. We'd retail that tire for 141.95. Profit on a set of 4 would be 176.24. Now, we run sales every month where we give "instant counter rebates" of 40-60 off a set which might bring the profit per set down to 136.00-116.00.

[PherBag]

I hear 10% of the retail cost is what some places charge. We don’t sell a lot of tires, maybe 40-50 a month. I had 2 different ladies call to ask about RH after a tire was ruined from being driven on flat. I told them the tires didn’t come with RH, but I would help them out with the cost of a new tire. Both ladies were good with the offer and still come back for oil changes, so I know they are really happy.


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[OTPAuto]

What about the Road Hazard coverage from some of the parts stores programs, like O'Reilly's 'Certified' program?