Want winter tires, but find them unaffordable? MPI’s winter tire program may be able to help. Is the winter tire program worth it? That depends on a number of factors. There’s a lot to cover, so let’s jump right into it:
What The Program Does
The winter tire program is a financing option. MPI will offer qualifying individuals up to $2,000 toward winter tires. To qualify, you’ve got to be in good standing with MPI (not in arrears on payments). The program can also cover costs associated with winter tires, from the costs of putting on the new tires to storage costs, taxes, or even Tire Pressure Monitoring Systems. The rate MPI offers is Prime + 2%, and you have the option to pay them back over the course of 1-4 years.
Breaking Down The Financing
Let’s start with the term “Prime + 2%”. The prime rate is the rate at which major Canadian banks lend to their best clients. You can find the prime rate on the Bank of Canada’s Daily Digest page – as of the writing of this article (November 2nd, 2020), the prime rate is 2.45%. Prime + 2%, then, would be 4.45%.
Now, we don’t want to give a whole course on consumer math here, but the gist of it is that by using MPI, you’re going to pay more, over time, for your winter tires. That’s how financing works. Should you opt for the 4 year period, you’ll be paying less per month, but more over the course of 4 years than you would over the course of 1 year. In other words, if you’re trying to save money, you should avoid financing altogether, or go for the lowest financing period possible.
Is It Worth It?
The answer to that question depends heavily on a variety of factors. We do know that the widespread implementation of winter tire use decreases road fatalities in the winter. Getting winter tires can undoubtedly decrease your risk of being in an accident in the winter.
Whether or not it’s worth it depends a lot on your financial situation, how often you actually drive in the winter. Obviously, if you find yourself getting into accidents every winter, and you can’t afford winter tires without financing, MPI’s program is an excellent idea. You may very well save more in premiums/deductibles than the cost of interest.
Now, some people wonder whether or not winter tires affect their insurance rates. The answer is that they can, but not directly – if winter tires reduce the number of accidents you have, they may indirectly lower your insurance rates. To understand more about auto insurance Winnipeg residents can get, contact our brokers – we can help.