Phoenix, AZ (PressExposure) December 27, 2009 -- For many timeshare owners, once they sign on the dotted line, the promises of a lifetime of vacations turns into a lifetime of fees and frustration. Once reality sinks in, it is often too late to rescind. Resort salespeople rush prospective buyers through sets of disclosures that are designed to warn them of the potential pitfalls that ownership may entail. Within months of purchase, the costs associated with ownership really start to show themselves.
The typical timeshare owner will finance at least a portion of the purchase price. Many, lured with promises of vacationing with a lifestyle that they could otherwise not afford, finance the full amount of purchase even though they are not necessarily in the strongest financial situation. There are a few reasons why this purchase decision is made. The salespeople often misrepresent the value of the timeshare in many cases stating that the timeshare will actually be an investment and appreciate in value like real property. Even a brief look into the resale market makes it abundantly clear that this is not the case.
The interest rates on the timeshare mortgages are extremely high. Owners report paying between 12%-18% on average with common finance terms of 7-10 years. Owners are untruthfully told that they can easily refinance on their own with an outside financial institution. With all of the interest added in the total amount paid approaches almost twice the original purchase price. For a $12,000 timeshare financed at 14.9% over 10 years, an owner will pay over $23,000 during the course of the loan.
Breaking that number out on a yearly basis means that person is paying $2,314 per year for ten years. Once maintenance fees are added in, the total jumps to around $3,000 per year for one week of usage. What compounds this issue is that there is essentially no hope of ever recovering the money that was spent. After paying out thousands of dollars per year for close to a decade, owners find out that there is essentially no resale market for the timeshare at any price.
Despite all of the information that exists with regards to how bad of an investment a timeshare really is, people continue to purchase. The often deceptive marketing strategies that the resorts employ attract hundred of thousands of new buyer per year. With such a large amount of people getting into the industry each year, this issues will most likely persist for the foreseeable future causing a tremendous amount of financial difficulty for owners across the country.