Sounds like somebody (carguy) has been listening to the know-it-alls at the big chain store tire shop!
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As an automotive technician, I can tell you the main concern with slighlty wider and/or taller tires is the speedometer being off a few MPH. Mine is off 3mph with the 275/55/20 (32"X11" STOCK WAS 245/65/17 OR 30x9.5) I am using.
ZERO PROBLEMS WITH THE ABS! When I worked at the Ford dealer we put lift kits and up to 5" taller tires on all the time.
1.) I absolutely I am not "Sheepeople", and I certainly do not simply reguritate anything from anybody; least of all the idiots at most of those chain places. I do the research, and find the facts for myself.
2.) What you have said above causes me to doubt your skills/knowledge as an automotive technician, at least in regards to tires.
a.) While taller tires will have an effect an the speedo,etc..., tire width will not. The primary concern with increased width will be clearance to body/suspension/frame components, primarily at/near full-lock turning.
b.) A 245/65/17 is a 29.5" tall tire, with a circumference of 92.63", not 30", not 32". 30x9.5 is typically a 15" rim size, so not sure where that is coming from. The 275/55/20 you said you are using is a 32.1" tall tire, with a circumference of 100.794". It turns 649 revs-per-mile.
The diff between the 245/65/17 (or 245/70/16, since they are the same height,etc..) and the 275/55/20 is apprx. 8.1%. Which brings me to my next point: We are talking percentages here, not absolute #'s. Therefor, your speedo is not off 3mph (except when your speedo reads 37.03703mph, and you are actually going 40.03703), it is off by 8.1%. This also means that the absolute error increases with speed. When your speedo says 70mph, you are actually going 75.67mph; a difference large enough to possibly get a hefty ticket.
c.)As for the ABS/ traction control. Ok, I accept that the ABS prob. won't be affected, if all 4 tires are changed. (actually 5. don't forget the spare, unless you want your flat tire to result in a torn up t-case/diffs as well) The traction control could still very well be affected. If the front wheels are not moving, 0mph is 0mph regardless of tire size. If the rears start to spin, they will be spinning 8.1% faster then the computer thinks they are. This also means that they will have begun to spin, and reached a certain threshold of slippage that would normally activate the traction control, before the computer even knows it happened. As you may know, it is much harder to stop a tire from slipping once it has stared, then to prevent it in the first place. The slight delay in activation could also mean the difference between sliding into a ditch or not. Yes, this is an extreme example that you may not encounter on any regular basis, but it is still a possibility.
I still maintain that it can also cause long term trans damage. As I said, and many of you know, the Explorer ecm does tranny shifts based on MPH, not nesc. rpm. Therefor, incorrect speed reading to the ecm means incorrect shift points. Again, depending on where/how you drive, you may never "feel" a problem. Or, you may struggle with it everyday. For example, you're going up a hill, trans upshifts early, thinking you are going faster than actual. Now, based on the excessive engine load, it may downshift. Then upshift again, based on erroneous speed readings,etc.... It's called "hunting" and it kills trannys, as it builds up a lot of heat, and wears the clutch packs.
d.) You said you installed up to 5" bigger tires at a Ford Dealer. Well, first of all, what do you mean by 5" bigger? Wider? No, I doubt that, as it almost certainly wouldn't fit. So, that leaves 5" increase in either diameter or circumference. A 5" increase in diameter results in a 15.7" increase in circumference. So, big difference. That would be like going from a 29.5" tire (stock 245-70-16) to a 35.5" tall tire. That is huge. Increasing the circumference by 5" is approx. a 1.6" increase in diameter. That would like going from the stock 29.5" to a 31.1" tire (close to the 265/75/16 the OP was asking about). Either way, making these changes WITHOUT correcting the error (in the ecm, thru a tuner/programmer, in the case of a late model explorer) is very unprofessional. I find it hard to believe a dealer would do with this, with the liability issues and all.
e.) Not that you mentioned it, but I want to reiterate my statement on the effect on gear ratio. While it has nothing to with the speed error, it is something to keep in mind when doing this. Tire size (circumference) definitely contributed to the final drive ratio. Consider the 8.1% error in your case (joecool); if you started out with (and kept) 3.73 gears in the diff, your tire change alone would be the equivalent of installing 3.42 gears with the stock tires. That will have a significant effect on accelleration and fuel economy. In a lighter vehicle, taller gears may improve fuel economy. In something heavy like an explorer, going from 3.73's down to 3.42's may actually reduce fuel mileage.
Finally, to sum it up: If you are going to make any modifications to your vehicle, do the research and do it right. Don't do something just to look "cool" or "badass" if it is going to compromise safety and performance. I'm not saying don't mod, just do it right or don't do it. Todays modern computer-controlled vehicle are very sophisticated. Making one change can have many other consequences that need to be accounted for.
If your changing overall tire diameter/circumference, then you need a programmer to correct the ecm. Period. Anything less is a half-assed, half-finished project.
OOowwww, my fingers hurt now......from all the typing....