Timeshare math isn't math, but sales tricks are used to lure unsuspecting victims into the timeshare trap. In this article, I will cover the real math behind timeshares - including purchasing costs and timeshare maintenance costs.
Our goal is that you can avoid being trapped into another timeshare purchase, and also can use this information to get a leg up on your timeshare company.
The easiest way to cancel a timeshare is to never buy one.
Timeshares are a poor financial decision.
No matter how you skew the facts. Timeshares are not logical financially (this does not include secondary market timeshares/resale timeshares). That doesn't mean you should not buy a timeshare, but only do so knowing that you are paying a premium to own a timeshare.
The reality of buying a timeshare from a timeshare developer is such a ridiculous notion that timeshares are most often sold because of unethical timeshare salespeople lying to deceive timeshare buyers.
The biggest area these timeshare companies dupe people is with their math - or rather their lack of transparency regarding the cost.
When you add the cost to buy, the cost to maintain, and the cost to exchange your timeshare - while also factoring in what you are actually buying (the actual features and benefits) it is one of the worst possible financial decisions.
The cost to purchase a timeshare
The first area timeshare companies grossly mislead buyers is the actual purchase cost of the timeshare. The biggest considerations they will not tell you on the timeshare presentation is that:
- The timeshare is not an asset, but is actually a financial liability - this is because benefits convey from the developer meaning the timeshare does not have a resale value anywhere close to the developer price tag. Check here to see what timeshares are selling for and you will see the reality that timeshares have ZERO value on the secondary market.
- The interest rates on timeshare financing are usually in the double digits - unless you pay cash for the timeshare you are going to spend almost double the purchase cost to finance the timeshare if you pay through the end of the loan term.
- The amount of points purchased will most likely not cover the vacation time you want to take, the unit size you need, or the season you prefer to travel during - over 71% of the timeshare transactions were from existing owner upgrades according to an industry report by ARDA who acts as the timeshare industry lobbying organization. The original argument by the salesperson when you bought the timeshare was that the cost to own a timeshare would be cheaper than renting hotels or condos - but we need to calculate a nightly rate with the financing included to see what we're actually spending.
Timeshare Maintenance Fees
The second (and often most hated part of owning a timeshare) is the never-ending maintenance fee cost. When you think about the math from above it's already impossible to justify purchasing a timeshare directly from a timeshare developer, but maintenance fees just perpetuate the absurdity of the timeshare industry.
- The maintenance fees never end - This is a cost that never goes away and is one of the biggest downsides to owning a timeshare.
- The fees go up almost every year - Ask any timeshare owner when the last time their timeshare maintenance fees went down.
- Calculate timeshare maintenance fee costs and project your total cost over time.
- The HOA is usually controlled by the timeshare developer - Check the quarterly filings (available for free here) for any of the publicly traded timeshare companies and you will find that they often money by managing HOAs (usually a 10% fee of the annual resort budget). Where it gets sketchy is that these same companies usually maintain a controlling interest in each timeshare plan or resort they sell.
In closing
Whether you're looking to get into a timeshare for the first time or already own a timeshare. Follow these rules to make the best decision for your family. The last thing you want to have to deal with is terminating an unwanted timeshare.
❌ Do not trust the math the salesperson gives you
⏳ Take your time to examine the actual cost of the timeshare
🏝 Check out resale timeshares that are available for free
💳 Avoid any and all timeshare financing
Ready to cancel your timeshare?
Start with your free copy of The Cancel Timeshare Handbook.
