What do you think a timeshare really costs? How does $22,000 with an interest rate of 14% sound? Plus an additional $970 annual fee? That doesn’t sound like a good deal at all. But, those numbers are the standard timeshare industry costs according to the American Resort Development Association or the ARDA.
It is common for a timeshare resort company to tell you that over time, you will save money and it will come out cheaper. That really isn’t the case. In our current market and economy the availability of and affordability of short-term rentals are very high. This situation makes timeshares make much less sense and comparatively much more expensive.
When you look at what a timeshare really costs, it is hard to justify the overall costs.
The Timeshare Sales Pitch
A resort you are staying at on vacation may offer you a free dinner, discounted future stays or even an extended stay. They’ll do almost anything to distract you from the fact that they are asking you to make a major life decision on the spot, right there. One of the first objections you may give is cost…you can’t afford all of that upfront. Not to worry, they’ll provide a loan via the timeshare developer. That sounds great, but what is the interest rate? They probably won’t bring that up, because they are typically very high. As we said above, the average is 14% over a 10 year mortgage term. In addition to the 14% interest they’ll probably leave out the part about regular maintenance fees. And they will definitely leave out the fact that on average timeshare maintenance fees increase by 5% per year.
The sales pitch really isn’t much of a sales pitch, if they give you all the information. Most people would turn and run if the information was clearly laid out and numbers were provided in detail. But, we know that is not the case. They paint a wonderful picture, leave out all the important details, offer some incentives and ask you to sign now before the deal goes away.
Consumer Reports provided a very good example of how timeshares compare to regular vacation costs. There is a point where owning a timeshare comes out cheaper….but that is tens of thousands of dollars and 13+ years of vacations before it starts to make financial sense to be a timeshare owner. And that is only good if you are able to use the timeshare as you want to and there is no guarantee of that.
If you have any questions about a timeshare, how to get out of a timeshare, what a timeshare exit costs, please contact us today for a free, no obligation consultation.
