You may have heard the radio ad where the announcer proclaims, It’s not your fault you bought a timeshare! Well, I am here to say, actually it is your fault. If you agreed and signed on the dotted line, it’s your fault.
I recently had the unpleasant yet educational experience of sitting through a timeshare presentation. I was on vacation with my husband and some friends from Boston. We were in Palm Desert, CA and we were offered $200 per couple from our hotel to sit through the presentation. Basically, with two attorneys, a CFP®, and Jedi-master salesman making up our merry band of four, we saw it as an easy opportunity to snag $400 to offset the cost of our vacation.
I will say this about timeshares: gone are the days of picking your week, gone is the single-destination option, gone are the cumbersome trading calendars. The industry does seem to have picked up on the idea that their customers want flexibility. Our timeshare pitch even included cruising as an option. So, hey, you do get some options.
What’s not gone is the almost-sleazy, used car salesman pitch. First, you are no longer herded into a presentation as a group. Everything is done by couples – even the four of us were separated into respective couples. This is the separate the weak, thin the herd tactic. We were shown all of the glossy, high-glam destinations, and we were told upfront that today there would be a special points offer! But only today… We also visited a brand new model of villas to come – a far cry from the villa we were staying in. The salesman presented a very mathematically loose estimate of our lifetime spend on vacations, and the anticipated rising cost of destination vacations, but he never really connected the value he was offering.
Our cost would be just over $28,000 and points would only be .55¢ cents forever, and about $1,300 per year in maintenance and member fees. But wait… for coming in today, we can earn an instant 2,000 point bonus and a special price of just over $26,000. The lack of reaction and cold look on our faces conjured up a video for us to watch on our own. Nothing new, just a rehash of the destinations available. Next, the salesman offered us some time on our own while he would persuade his manager to join us. Oh, boy… after about ten minutes, said manager appeared and asked, ‘right, so whose credit card are we going to use?’ An attempt at humor that landed flat, hard and silent. This manager offered us another 2,000 more points (even though it would cost them) and gave us more money off bringing our offer down to just over $24,000 if we would just sign today!
So, what failed? First, we actually have no interest in being tied to one single-branded vacation provider. Second, and most importantly, the salesman couldn’t actually relay how or why we would be saving any money at all. Zip, Nada. No value relayed. Third, that points price is frozen, but the annual maintenance and member fees are not. Those will increase over time. So, think about that for a moment… invest on your own and you can vacation wherever you want! Finally, consider the changes you’ll see over your lifetime in destination accommodation. Already companies like HomeAway, Airbnb, Misterb&b and others offer an astounding array of choices at a great value and without on-going, annual, lifetime fees!
So, are timeshares investments? NO! Absolutely not. Don’t fall for the investment pitch and keep in mind that any brand of timeshare you might be interested in can be had for pennies on the dollar in the resale market. I found our special offer on a resale site for only $2,500. Tread carefully! These programs generally come with lots of caveats and restrictions, and ever-increasing fees, and your timeshare will likely never increase in value. If you do want a timeshare, be absolutely certain you can live with the fees, rules and restrictions that go with the program. But don’t fool yourself thinking it’s an investment! And those points, well… you get new points every year, but for any of the nicer destinations, you’ll find that you are going to have to buy points to cover your stay; possibly a lot of points.
We escaped unscathed, other than losing nearly two hours of our vacation time, and with $200 in hand. But wait, there’s more! Before we left the desk, we were offered another vacation valued at $695 if we would only pay $195 today and agree to sit through a future presentation. We could go anywhere we wanted, well, except Hawaii. Suddenly Hawaii was a tier 2 property destination. We took our $200 and ran to the car, as did our friends. We all had a very nice lunch!
As an independent Certified Financial Planner™, I can help you sort through the details on various offerings. No matter where you are in life, a CFP® professional can help you create a financial plan for today and tomorrow. Contact me and let’s get started! #talktometuesday #education #Hireaplanner #timeshare #travel #CFPPro #LetsMakeAPlan