Used Tires: A Booming Business with Hidden Dangers

The sale of used tires is a booming market in the U.S. that generates high profit margins for retailers and wholesalers. For consumers used tires can generate unseen safety hazards, even if tires have legal tread depth and appear usable. An examination of the used tire business reveals some unsafe practices—and a business that often starts in a scrap heap.

Safety Research & Strategies began looking into the used tire market after finding that a significant number of crashes documented in its “aged” tire research were purchased used. These tires, all six years old or older, were sold to consumers who believed they were getting tires that were safe, based on their visual condition. Motorists buy used tires for a variety of reasons: the low price, for use as a spares, or because owners don’t plan on keeping the vehicle for very long. And they buy them assuming that used tires are safe. While many used tires are purchased because of tight budgets, consumers across socio-economic strata are lured by one thing—the appearance of a bargain. What they don’t bargain for is the lack of safeguards that allows potentially unsafe used tires to make their way back into the market.

According to the Rubber Manufacturers Association, a tire industry trade group, an estimated 30 million used tires are sold to motorists each year. That represents nearly 10 percent of the 318 million new tires sold in the U.S. annually. Some tire dealers only sell used tires. Others sell used tires to supplement their sales of new tires. Either way, for the sellers, used tires are a lucrative business—garnering much higher profit margins than the sales of new tires. In fact, trade journal articles suggest that used tire sales should be part of retailer’s business warning that they are missing a key profit opportunity if they don’t.

There are several good reasons to avoid used tires. One is age. Acknowledgement is growing among the industry, researchers and government agencies that aged tires—regardless of their visual appearance and tread depth—can pose a significant threat to safety. The used tire market remains an unknown and unregulated source of aged tires. Tires age in a way that often cannot be detected visually. Oxidation of the internal components causes tires to deteriorate from the inside out. A tire that can appear new on the outside can be compromised internally as the material and chemical properties of the tire have changed significantly, increasing the risk of catastrophic tread / belt separation. Think of those old rubber bands in your desk—when new and fresh they are very elastic, as they age the rubber properties change. Stretching will result in cracking and they break much easier and more quickly then when they were new. Yet, age does not automatically disqualify a tire from the used tire market. Often—but not always—used tires are older than new tires and stored, before sale, in conditions that may contribute to rapid deterioration.

The way used tires are collected, processed, stored, and selected for sale also raises concerns. More often than not, the provenance of a used tire is unknown. Used tires enter the market from many points ranging from tire service center scrap heap to salvage yards to Craigslist. However, the bulk of the used tire market is supported by large multi-state recyclers who do little more than give each tire a visual inspection to determine that tread depth is adequate and wholesale them back into the market. If a tire has at least 2/32nds of an inch of tread left and no glaring visual defect it’s resold—and often cleaned and even painted black to make it appear new.

Rotating Tires from the Scrap Heap to a Vehicle

Lakin Tire is a good case in point. Lakin Tires, with offices in Connecticut and California, processes some 17 million used tires annually and by their own account they sell an estimated 6 million used tires annually. Lakin, like many other recyclers, charges a fee to collect scrap tires from tire retailers. Once tires are collected they are either processed into scrap rubber for other uses or wholesaled back to tire retailers, usually by the trailer-load. Companies like Lakin have a significant profit incentive to direct these scrap tires back into the retail stream as used tires. Instead of taking part of the $1 per tire fee to process them into scrap for bulk resale, recyclers can resell the “grade-off”—tires that have legal tread and are resellable—and wholesale them from $1 up to $10 each, a much more profitable venture.

According to deposition testimony filed in a civil lawsuit, Lakin’s clients include some of the biggest tire sellers in the U.S: Costco Wholesale, Sears Roebuck, Pep Boys, Goodyear Tire & Rubber Company corporate owned stores and Bridgestone/Firestone corporate owned stores. Once the tires are picked up from retailers’ scrap heaps, they are trucked to processing facilities, where they are unloaded onto conveyor belts. There, inspectors, called graders, eyeball 22,000 tires a shift on either side of the belt as they chug along.

The first set of graders, called rough graders, “pull out obvious junk,” says Randall Roth, vice president of Lakin Tire West, the company’s California division. The tires that make the first cut, head for the “skilled graders,” where they can remove a tire, place it tread up on a grading table, and rotate it as they inspect the tire, looking and feeling for separations, cuts, bead damage, sidewall fatigue, lack of tread, uneven tread wear, inner liner defects, punctures and improper repairs. What graders are really looking for are the two most salient characteristics for resale: the popular tire sizes that their retail tire customers want and tires with sufficient tread depth. Lakin CEO Robert Lakin says that the minimum tread depth on a light truck tire would generally be about 25 percent of the tread remaining, or 3- to 4/32nds of an inch. But a used tire is not automatically disqualified by advanced age or even if it has already been repaired once.

Some tire recyclers will reduce the cost to haul scrap tires if the retailers provide them with a good percentage of grade-off, thus forgoing traditional and more costly recycling in favor of selling high-profit used tires. In other instances, tire shop managers are given direct payments from recyclers based on the level of grade-off they get from their scrap heaps.

While most used tires typically undergo simple visual inspections, others may undergo more processing. In the case of Lakin, if the retail client pays for it, or for an extra fee, some used tires will be sent to a detailing department, where workers will spread the tire for further inspection, inflate it to ensure it retains air, patch it if necessary, and repaint them black.

“It makes the tire look new,” Roth says.

According to Lakin officials, the company has more than 60 grading classifications and they guard that information zealously. In deposition testimony Lakin officials declined to disclose exactly how their employees grade the tires claiming their process was “detailed, proprietary” information. Yet, they admit that this critical information is not even memorialized in any training manuals or videotapes—instead the information is passed on orally.

“Graders are provided one-on-one personal training by senior members of the graders supervising staff and senior graders,” says Roth, in his deposition.

At Lakin, about 80 percent of the tires are declared scrap and the rubber is ground up for other uses. The remaining tires deemed suitable for resale are placed in piles until they are shipped to a retail tire center for sale. Lakin sells them in bulk lots, and under the assumption that some bad tires will slip through the grading process, it adds five to seven percent to the order to make up for any tires that are no good. Lakin says it is the tire retailers responsibility to re-inspect the order to determine if any of the tires are not saleable.

Buyer Beware

In 1989, former Michelin Tire manager Clarence Ball published a column in a tire industry trade journal calling for used tire standards. He conducted his own casual survey of used tires for sale and was sobered by what he found on the racks in his area: “My worst fears were realized when I found a number of tires that looked good – until I examined inside. I doubt that the tire fitter or customer would have spotted loose cords in the tires, evidence that they had been run while under inflated. Several tires had tread repairs which would have caused a number of weights to be used in an attempt to balance them and a few had puncture repairs that looked like they had been done by a plumber.”

Unlike retreaded tires, used tires are not subject to any federal standards. Their road-fitness is governed under state tread-depth laws. A recent survey of state requirements for legal minimum tread depth for passenger vehicle tires in the United States found that most states require a minimum of 2/32 of an inch (approximately 1.6 mm) of tread. Some states, such as California, the margin of safety is thinner –1/32^nd of an inch of tread, while others have no requirements and defer to the federal criterion for commercial vehicle safety inspections. The 2/32 of an inch requirement is consistent with the height of the tread-wear bars built into passenger car tires sold in the United States, but the robustness and rationality of that measure is far from clear.

In Great Britain, manufacturers of new tires have issued warnings to consumers for more than a decade on the hazards of buying what the British call “part worn” tires. The Tyre Industry Council, a trade group, has worked toward promulgating regulations to prevent unsafe tires from reaching the market. In 1995, the UK implemented a part-worn tire standard that outlined the wear conditions under which a used tire would not be considered legal for sale. The TIC has continued to pressure used tire sellers to maintain those standards. In recent years, the council resumed cautioning motorists about the dangers of used tires, after a 2000 survey of used tires in North Yorkshire found that 40 percent of the tires did not comply with structural safety; and 30 percent contained structural defects which could have led to a sudden and rapid loss of tire pressure while on the road.

How big is the problem?

The scope and magnitude of the used tire problem is an unknown because the business operates with no oversight. Lack of records tracking the tires back to wholesalers—or in many cases even the retailers—is the norm. Individual tires are not tracked by sellers and many used tires sales are cash and carry. Federal crash datasets don’t capture critical information on tires like make, model size, and tire ID numbers, let alone whether they were purchased used. In the event a tire fails, there are often no records of the sale and the tire maker whose name is on the sidewall can take the brunt of any liability. And the liability can be significant if there are deaths and injuries.

In the U.S., however, the Rubber Manufacturers Association has remained silent on the issue for fear of invoking federal anti-trust regulators. And the Tire Industry Association (TIA), a trade group that represents tire dealers and others in the tire business, has sidestepped the issue because a large number of their members generate revenues from used tires. In one TIA member survey, 75 percent of respondents indicated that they sold used tires.

What’s the Solution?

SRS believes that a key solution to removing unsafe used tires lies in the use of shearography, a machine that can non-destructively examine the inside of a tire, similar to the way an MRI is used in medicine. Large used tire wholesalers who move millions of tires can afford the shearographic machines that cost $150,000 to $250,000 each. These machines can be automated to scan tires much as they are in new tire plants—rejecting those that show normally invisible internal problems. At least one maker of the shearographic machines claims that this can be done in 25 seconds at a cost of $0.25 per tire. In addition to a visual inspection, a shearographic exam can eliminate the dangers associated with used tires—and in a cost effective manner.

Used tire sellers, particularly the large wholesalers, should move toward a higher standard of care and adopt meaningful tire inspections that combine visual reviews with internal exams. Tires should be tracked and the accountability should fall on the wholesale and retail sellers. Much like car retailers have adopted “certified used” standards the used tire wholesalers can adopt a similar protocol for used tires and provide a useful and safe product they can stand behind. Without self-policing and a more transparent business model, used tire sellers are courting disaster and the potential ire of state regulators who could (and should) examine how to ensure consumers are getting safe tires.