On the sidewall of most new tires are red and yellow painted dots.

These are
markers or guides to be aligned with particular points on the wheel. The alignment
matters for the balancing of the wheel: If these dots on the tires are properly
aligned with certain points on the wheel, minimal weights will be used for
balancing. The less lead used for wheel weights, the lower the cost for balancing.
The more weights are used, the higher the cost to balance your tires.

The Yellow Dot

When tires are made, they are almost never perfectly balanced. Most manufacturers
will place a yellow dot on the section of the tire where there is least weight. The
technician is then supposed to line up this yellow dot to where the valve stem is
located. Where the valve stem is located is the heaviest point of the wheel. By
aligning the lightest spot on the tire with the heaviest point on the wheel, the
tire/wheel balance is as close to optimal as can be. As such, you won't be using as
many lead weights around the wheel to balance out the tire and wheel. Using fewer
weights means you get a more balanced wheel, which then means a quieter, more
comfortable ride, and a longer-lasting tire. All these add up to significant
savings for the user.

The Red Dot

In the same way tires are never perfectly balanced from the manufacturer, tires are
never perfectly round, either, even when new. They have high and low points because
of where the belts are joined, and these points can cause vibrations when a tire is
rolling. The red dot indicates the tire's high point. Most of the time, a wheel
will also have a dot�either a drilled dot or a sticker to indicate its low point.
If you have these marks, you should align the red dot with the mark on the wheel.
By doing this, you minimize the vibration caused by the high point of the tire.
Minimized vibration is a good thing and ultimately also saves you money.

Red over Yellow

Now, if you have both red and yellow dots on your tire and you don't have any dots
or marks on your wheel, red takes precedence over yellow and you should align the
red dot with the valve stem. Canceling out the high point takes precedence over the
lightest point of the tire, which can be addressed with wheel weights.

So the next time you have tires mounted, make sure the technician follows these
tips. You will get a smoother ride for less money, and your tire will also last
longer.