Would you buy a car without first test driving it? Probably not. So how could you pay thousands of dollars on something you’ll keep for many many years without seeing how it performs? That’s the theory behind renting a timeshare before you buy it. There are limitations to this because brand new timeshares developments won’t have any owners for you to rent from, or the new owners won’t be tired of it yet and won’t be renting it out. However, if you have your eye out on a “used” timeshare, you could rent it before you consider buying it for good.

Where do you go to rent? If you have a specific place in mind, simply call up the management office and ask if there are any rentals available. If you don’t have a specific place in mind, you probably won’t want to rent it for the sake of test trying it out. You can rent a hotel or something in the geographic region to see if that place is for you because timeshare experiences can vary greatly. There’s no sense test trying a timeshare you won’t be getting (unless you simply want to take advantage of favorable rates).

What to look for? Now that you’re test driving a timeshare, take great pains to look at the little things on the property. Is there an adequate level of maintenance? Are the paths kept clean, trash bins emptied, grilling areas clear and pools properly maintained? You’ll be paying a lot of money each year for maintenance, be sure to see that the property is kept in good condition with your hard earned money. Check the rooms for proper maintenance as well, are the showers, sinks, and toilets in good working condition? If you have a kitchen, are all the appliances working properly? How about the windows and sliding doors? Be meticulous about everything. You’ll be writing a check each year for maintenance and it will help your mind to know that it’s going towards maintenance, not some guy sitting around in an office sucking up air conditioning.

So, before you buy a timeshare, test drive it first if you can.

Let us compare the cost of owning a Disney Vacation Club membership versus all the other options available to you if you were to stay at a resort.

The example used at MouseSavers is this one:
Let’s say you buy 160 points at Saratoga Springs Resort. For purposes of this example, 120 points would cover 11 nights of vacation in a Saratoga Springs Studio unit: a 6-night stay (including one weekend night) in Magic Season and a 5-night stay (including one weekend night) in Choice season.

• Your dues for 160 Saratoga Springs Resort points cost $659 in 2007. (This ignores the buy-in cost of $16,640 and the associated opportunity cost.)
• If you rented points from an owner to stay in a Saratoga Springs studio for the same dates at $11 a point, it would cost you $1760.
• Maybe you’d be just as happy staying in the least expensive Disney Deluxe hotel room, and you’re able to get a modest discount on the hotel room. If you stayed at Wilderness Lodge in Regular Season with a 10% discount, 11 nights would cost you $2925.21 with tax in 2007.
• If you paid the full “rack rate” charged by Disney to stay in a Saratoga Springs studio for 11 nights in Regular season, it would cost you $3789.89 with tax in 2007.

The takeaway here is that the difference between a typical discounted rate, of $3000 for the Wilderness Lodge, is far more than the annual dues of $659 if you owned membership in the Disney Vacation Club. However, even if you factor in the opportunity cost and the fixed membership fee, you’re still looking at savings. So why doesn’t everyone do this?

Not everyone is planning on visiting Disney for eleven days each year. If you were, then the Disney Vacation Club is a perfect choice, much like many other timeshares (especially if you purchase on the secondary market), for the Disney-phile.

So, the lesson here is that if you are going to visit Disney every year like this guy, then timeshares and vacation clubs is your best bet. If you don’t plan on going every year, you could always rent points from an owner and get a big discount!

The main components to TCO for a timeshare are:

• Opportunity cost
• Annual or maintenance fees
• Usage fees
• Exchange fees
• Exchange club membership fees

Opportunity cost refers to the second best alternative for your money. For example, if you pay $5,000 for a timeshare, that’s $5,000 you don’t have sitting in an investment account earning a return on your money. Your opportunity cost is the income you would’ve earned from that investment.

Annual or maintenance fees are those fees you pay to the timeshare for the upkeep of your room.

Usage fees are those fees you pay when you use your timeshare.

Exchange fees are those fees you pay when you exchange your timeshare at the exchange company’s spacebank. We assume that you’ll do this every other year (or none at all) in the example below.

Exchange club membership fees are the fees you pay for the ability to exchange your time any year you’d like.

Total cost of ownership:

• $800 – 10% of $8,000 purchase price of the timeshare.
• $200 – annual and maintenance fees.
• $100 – usage fees.
• $80 – exchange club membership.
• $60 – exchange fees, every two years.

Total cost: $1,240

How does this drive the purchase price? It has to do with the opportunity cost. As you can see, that’s the biggest driver of the price (your annual/maintenance fees may be higher than $200 a year!), so you should use this metric to drive your purchasing decision.

Brand new resort and you want a spot. This is the number one reason people purchase a timeshare directly from a developer. If you can get a coveted timeshare on the secondary market, that’s wonderful because it’ll be a much better deal. However, if a resort is brand new, you won’t see any timeshares on the market because there simply hasn’t been enough time. Now, is that resort really all its cracked up to be and worth the demand? That’s for you to decide.

Very specific requirements. If you’re looking for a specific week in the year in a specific area, you might have to go to a developer simply because you may not find such a deal on the secondary market. The resale market will have plenty of supply, but depending on how specific your needs are, you may not be able to find something you want.

Bonus offers or amenities. Sometimes developers will offer incentives that you can’t get on the secondary market, such as bonus exchange weeks for a set number of years or bonus points available through some other program. Sometimes hotel companies offer hotel points in addition to the timeshare so you get a few hotel stays out of it as well.

Comfort. As with any resale market, there are unscrupulous characters trying to pull a fast one on an unsuspecting buyer to turn a quick profit. It’s a problem in any resale market of any car, be it timeshares or cars or houses, and sometimes people aren’t comfortable buying on the secondary market. This is a good, albeit expensive, reason to go with a developer sale rather than the resale market.