Timeshare Purchase Remorse
A timeshare may seem like a great purchase at first — a guaranteed vacation for you and your family year after year. But what happens when the appeal fades and you have a timeshare that you either can’t, or don’t want to use? With over 9 million timeshare owners in the United States2 alone, this can be a common occurance.
The top reason for this regret stems from the financial burden that comes with timeshares. Not only is there the significant cost of the original purchase, but there are also rising maintenance fees, the risk of special assessments, and the reality of lifetime contracts. On average, a timeshare costs over $20,0003 purchased new from the resort. Many owners finance this purchase, oftentimes through a credit card through the timeshare company directly. This means that they are making money off of both the original sales price, and interest accrued through the mortgage. With an average interest rate of 14%4, these high interest loans are a huge profit center for the timeshares.
Even if a timeshare is purchased on the secondary market at a lower cost, there is still the obligation of maintenance fees. The average annual maintenance fee is $9705, and must be paid to the timeshare year after year, regardless of whether or not the timeshare is used. Maintenance fees also increase over time, meaning that $970 fee is going to look a lot different by the time your children inherit it.
The less frequently mentioned financial liability is the risk of special assessments. A special assessment is a fee added on top of the maintenance fee, usually to cover the unexpected costs faced by the timeshare. This could include natural disasters, upgrades, or new management. A natural disaster such as a hurricane could damage a resort and cost owners thousands if the timeshare doesn’t have the funds reserved. Consider when owners at the Hawaiian resort Point of Poipu were faced with a special assessment of $5,893 to pay for the damage caused by “water intrusion.”6 $5,893 for every week or interval owned translated into an unexpected bill for over $10,000 for those who owned multiple weeks.
Another top reason for regretting the purchase of a timeshare is that many contracts can be passed on to the owner’s estate and/or children. If your timeshare ownership includes “perpetuity” language, you may want to have a discussion with your loved ones to see if they value the timeshare as much as you did when you first purchased. If not, they may end up inheriting something that feels more like a burden than a blessing.
While these are not the only reasons owners regret their timeshare purchase, these are four of the most common reasons people seek relief from the burden of ownership. Those who are considering exiting their timeshare for good should consider asking their resort directly to see if they offer a legitimate exit path. If a direct exit through the resort is not available, owners can seek out other proven and recommended means to exit such as Timeshare Exit Pros.