Posted on August 25, 2020
Ah, the age old question for potential timeshare buyers. Debating whether you should try before buying a timeshare goes back nearly as far as timeshare itself. There are reasons for renting first before buying, but the issue is not as cut and dried as it may appear.
One element is prior experience with the brand. For instance, you may be a member of one of the numerous loyalty programs that are run by various hospitality brands such as Marriott Bonvoy or Wyndham Rewards. Using accumulated points may give you an opportunity to experience the brand and how they provide service, perhaps through business or leisure travel. In this case, you wouldn’t necessarily need to rent first, since you would have already tried them out.
Or perhaps you previously stayed in a timeshare resort and may not even realize it - without having to pay for a rental - by using your points. In this case, you would have more confidence in buying into a timeshare program than a vacationer without this level of experience.
Renting with an interest in potentially buying a timeshare will almost always involve a tour of a resort when you get there. Or at least an invitation to tour. This is a way to find out the ins and outs of the resort and how the program operates. But keep in mind that you will be with a salesperson and their entire objective is to get you to buy at the highest possible price. This is why it is imperative that you already have a resale price in mind before you try before you buy, because resales will be priced at 50-60 percent less than the resort prices.
The sales staff will try to “discount” the sale price at the resort, but it will almost always be higher than the resale price for a corresponding timeshare on the secondary market.
Think of this in terms of buying a car. No matter what the car salesman can offer you on the lot, you know that it will be more than what you can pay as a “pre-owned” car. And there aren’t any new timeshare warranties available like there are at a car dealership.
From the title of this blog, there is an assumption that you want to buy but you just have a hesitancy leading you to try first before buying a timeshare. But there may also be a presumption that renting is cheaper than buying in the long run. This is not necessarily the case.
When comparing the long term cost benefits of renting versus buying, the primary variable is use. This may seem obvious but you’d be shocked at how many people just don’t use their timeshares for whatever reason. Sure, the industry average hovers around 80 percent each year for timeshare occupancy, not including the era of COVID, but that means 20 percent of owners don’t use it – and they’ve already paid for it! That’s about two million owners just in the U.S.
The industry is getting better at educating their owners about how to use their timeshare, but historically it has done a poor job of educating owners beyond the initial sale. Especially when it comes to using booking windows and the use of exchange services. If you buy, make sure you find out as much as you can about the booking process and how you can use your timeshare.
So, back to the price issue. Because prices at the resort include the marketing costs and sales commissions needed to sell you the timeshare, these costs drive the price up. This is why prices on the resale market start with a 50-60% discount compared to resort prices, because those overheads don’t exist with resales.
The prices at the resorts vary depending on factors such as the resort itself, the associated brand, location, size and season of ownership and whether points are involved. These variables are why the American Resort Development Association refers to the cost of an “average weekly interval” rather than the cost of a standard week when they discuss prices. That average price for a week’s worth of timeshare purchased at the resort – $22,942.
Now compare that to resale prices. As an example, a two-bedroom deluxe unit at Wyndham at Waikiki Beach Walk can range from 250,000 points to 500,000 points (for New Year’s week) needed for a week’s vacation. The majority of weeks in the Lower category range from 250,000 – 315,000 points. There are points packages being advertised from $500 to $3,500 on our site that would cover the points needed for a week at Waikiki.
Now the big comparison – the price of renting versus buying a timeshare. Using the example above for Wyndham at Waikiki Beach Walk, you can book a 2-bedroom unit online for October (presuming the COVID restrictions have lifted by then) at $2,423 for a seven night stay.
Even factoring in annual fees, buying 300,000 points on the resale market to stay at the resort would cost about $1,650 for the week (using the advertised resales mentioned earlier) if the cost is prorated out over a 20-year use period. Remember, this is a use product so the primary benefit is using it each year for an annual vacation. Plus, you can use those points at other Wyndham timeshare resorts in the network if you want to vacation at a different destination.
Sure, trying before buying is like dipping your toes into the water before you take the plunge, but over time it isn’t the cost-effective way to take an annual vacation that you may think. Remember, we’re talking resale prices for comparison and not the expensive prices at the resorts.
Our licensed agents would be happy to discuss the comparisons with you and answer any questions you may have in a no-obligation consultation. Just give us a call at 877-624-6889 or fill out the form on our Contact Us page and we’ll be in contact with you as soon as we can.