Snow tires are pretty expensive in the 225/45/18 setup which would be the same as stock. I found a 225/40/18 set of snow tires for cheap. I know there is over a 3% difference in overall diameter.

I am wondering if this setup will be worse in the snow because of the TSC and ABS getting funky readings due to the smaller tires or cause any issues with the vehicles drive ability.

Thanks in advance.

 

no, you'll be fine.

 

As long as all four tires are the same the ABS/TC/DSC won't know the difference.