Nine out of 10 part-worn tyres being sold in Birmingham failed to meet the minimum legal standards, a trading standards investigation found.
Among failures discovered were tyres which had nails embedded, illegal tread depth and exposed cords.
Three cases were being investigated with a view to prosecution, the city council said.
It bought 10 tyres and nine lacked the correct markings required, which identify them as a part-worn tyre.
People will be cautioned in connection with that, the authority said.
A spokesman for TyreSafe, an organisation which raises awareness about the dangers of defective and worn tyres, said the results of the investigation were "extremely worrying".
"Although guidelines do exist about the condition of tyres being sold as part-worns, they are clearly not being adhered to by all traders," he said.
Councillor Neil Eustace, chairman of Birmingham public protection committee, said: "We are disappointed by the increase in this year's failure rates.
"Over the last nine years we have made significant efforts and progress in educating traders across the city about their responsibilities in selling part-worn tyres.
"However, the latest results show that this is not a problem we can forget about."