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You get an email from a big fancy resort offering you a 4-night stay in their best condo for only $200 if you listen to their timeshare pitch. You’re thinking, “Woo hoo an extra cheap vacation for the family!” knowing you won’t buy into the timeshare option. But somehow they rope you in during the presentation and now, here you are with a timeshare. Many Americans have been in this situation.
Whether you’ve been dreading your timeshare from the moment you signed the papers or you used to enjoy it but no longer do, we’ll explain some options on how to get out of a timeshare and discuss another strategy for managing your money which will give you more control of your financial future.
There are a variety of timeshare contracts and ownership types that can play into how different timeshares work. The overarching idea of a timeshare is that it lets you share property costs with others on a vacation property arrangement that guarantees you time at the property each year. On paper, the idea of a timeshare sounds great, but what they don’t tell you is how much maintenance fees will be and other incidental costs incurred every year. These are the costs that can make ownership a nightmare and make it more difficult to get out of a timeshare. While getting rid of a timeshare is a tricky business, here are five options to consider.
If you just bought a timeshare and want to back out, you may be in luck! There is a short window of time called the rescission period when you can retract your buying decision and walk away. The Federal Trade Commission’s minimum rescission requirement is three days, but each state in the U.S. can set its own rescission period. This means the window of time can range from a short three days to a longer 15 days, depending on the state laws where your timeshare is located (not where you live). If your timeshare is outside of the U.S., you’ll want to research that specific country’s laws to determine your options. It’s also important to find out what action triggers the rescission period. Does it start on the day you buy the timeshare? Maybe it’s when you receive the public offering statement? This information is often included in the list of general information about the timeshare or in the time disclosure statement.
If you know you’re still in the rescission period, all you have to do to get out of your timeshare is write a timeshare cancellation letter to the resort and mail it to their cancellation address. More often than not, the cancellation address is in fine print or not included at all. If this is the case, you are legally entitled to call the resort and ask them for the address. Since state laws differ it’s important to know the laws and regulations where your timeshare is located. Some states won’t even start your rescission period until you’ve received the cancellation address and instructions, which is good news for those who have timeshares in those states. Once you write the letter and obtain the cancellation address, you’ll want to make sure the letter gets to the resort in a way that they won’t be able to contest. It’s a good idea to use a mailing method where the resort has to sign for the letter and prove it was actually received. It’s also important to avoid falling for any “cancellation penalties” the resort may tack on without questioning those fees.
If you’re past the rescission period, your next line of defense is to ask the resort to take the timeshare back. Sometimes timeshare deals include a deed-back clause. A deed-back clause/program allows you to give your timeshare back to the resort. Look through your paperwork to see if this is an option for you. If your paperwork doesn’t include a deed-back clause, you may be able to barter with the sales manager and offer them an incentive to buy back your timeshare. This is not always the best way to handle getting rid of a timeshare so make sure you know what you’re doing before trying this.
If the first two options don’t work out, you still have some ways to get out of your timeshare, but you may have to put more money into it before you can get out. Realize, that selling your timeshare may not be an option if your loan is still outstanding. You’ll most likely have to wait until it is paid off to sell. If you don’t have a loan or if it has been paid off, you can look into researching how much the timeshare is worth. Real estate agents, timeshare resale sites, or other listing sites can be helpful places to start. Once you’ve decided on a price, you can list your timeshare through various methods – a real estate agent, listing website, etc. It’s important to keep in mind that you may not be able to recoup all your costs depending on the market and the current value of your timeshare. At least this option allows you to avoid more timeshare costs in the long run.
If you’ve exhausted all other options with no luck, your next move might be to hire an attorney or timeshare exit company. These options will likely cost more, but if you hire the right people, they’ll hopefully be able to win the case for you and get you out of your timeshare. If you’re hiring an attorney, be sure to find one who specializes in contract law and guarantees their services. For timeshare exit companies, you’ll want to make sure you hire a company with a good reputation and which has experience in the timeshare industry. A proven track record of helping people get out of their timeshares is usually a good thing.
There are a lot of people out there who will give advice on how to get rid of a timeshare, but not all the advice is worth taking. Here are some options you’ll want to avoid:
Rather than buying timeshares, consider a vacation strategy that lets you keep more of the money you make under your control.
Many of our clients at McFie Insurance, choose to save their “vacation money” by paying premiums on a participating whole life insurance policy. When they take a vacation, they can access money via policy loan to self-finance their vacation and then repay the policy loan over the next year, or however long they wish to take. This spreads the cost of a vacation over time and makes it more comfortable for your budget.
Over time, the cash value in the life insurance policy is guaranteed to grow more than all the premiums that are paid. This provides a way to save for vacation and pay for your vacations while getting a return on your money which is higher than simply putting it into a bank savings account.
Instead of locking in your vacation destinations through a timeshare, which you feel like you must use regularly, you’ll have the freedom of choosing your vacation destinations without any pressure or nebulous ongoing maintenance costs on a timeshare contract.
Even if you like to return to the same destinations, this strategy can often work out to be less expensive over time than locking into a timeshare contract, and you will have more financial flexibility.
At McFie Insurance, we design and sell participating whole life insurance. Participating whole life insurance is a contract designed for the insured’s whole life and usually requires premiums to be paid every year.
The contract guarantees payment to the beneficiaries of a policy upon the death of the insured and also allows the policy owner to grow cash value in their policy over time and receive any non-guaranteed dividends from the excess profit generated by the insurance company.
Here’s a breakdown of how it works:
Maybe you’re struggling with your finances from timeshare missteps or simply want to plan for future vacations and learn more about what a well-designed life insurance policy can do for you. Either way, schedule an appointment with McFie Insurance.
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