• The TUGBBS forums are completely free and open to the public and exist as the absolute best place for owners to get help and advice about their timeshares for more than 30 years!

    Join Tens of Thousands of other Owners just like you here to get any and all Timeshare questions answered 24 hours a day!
  • TUG started 30 years ago in October 1993 as a group of regular Timeshare owners just like you!

    Read about our 30th anniversary: Happy 30th Birthday TUG!
  • TUG has a YouTube Channel to produce weekly short informative videos on popular Timeshare topics!

    Free memberships for every 50 subscribers!

    Visit TUG on Youtube!
  • TUG has now saved timeshare owners more than $21,000,000 dollars just by finding us in time to rescind a new Timeshare purchase! A truly incredible milestone!

    Read more here: TUG saves owners more than $21 Million dollars
  • Sign up to get the TUG Newsletter for free!

    60,000+ subscribing owners! A weekly recap of the best Timeshare resort reviews and the most popular topics discussed by owners!
  • Our official "end my sales presentation early" T-shirts are available again! Also come with the option for a free membership extension with purchase to offset the cost!

    All T-shirt options here!
  • A few of the most common links here on the forums for newbies and guests!

Does Lack of Financing Depress Resale Values?

BocaBoy

TUG Member
Joined
Jun 5, 2009
Messages
5,332
Reaction score
410
Points
368
Location
Wisconsin
Resorts Owned
Grand Chateau
Some of our longtime friends are starting to lease cars. They are finding that if they can stay under the mileage caps, it is less expensive to lease than to own for certain cars. We have always owned our cars and then ran them into the ground. We will compare to leasing next time we need a new car.

The other option is buying BMWs after they come off a 3 year lease. Apparently 70% of BMWs are leased so there is a lot of certified inventory out there and they can be bought for about 1/2 the cost of new. My 2006 BMW has pretty much the same design as the new models so people cannot really tell the difference anyway. Kind of like buying a resale timeshare. :whooopie:
We are leasing cars now. With low interest rates it is more economical for us. That would change if interest rates climb significantly.
 

BocaBoy

TUG Member
Joined
Jun 5, 2009
Messages
5,332
Reaction score
410
Points
368
Location
Wisconsin
Resorts Owned
Grand Chateau
Bundling sub-par mortgages was a key factor which led to the '08 crisis. Unlike an individual loan that is scrutinized by a banking committee, such bundles hid many bad loans. Sounds similar.

In the current scenario, this over-abundance by developers means that it is a buyers' market for resales. What do you think will happen if/when developers cannot sell the loans?
I worked many years in the investment industry. Actually, investors love to buy bundled timeshare loans from developers because they have high rates AND generally more affluent buyers than average. The quality of the entire package of loans is perceived by investors to be quite good, typically as good as (or probably better than) auto loans.
 

BocaBoy

TUG Member
Joined
Jun 5, 2009
Messages
5,332
Reaction score
410
Points
368
Location
Wisconsin
Resorts Owned
Grand Chateau
I believe that readily available financing for the resale market would clearly increase resale prices of high-end timeshares. It would bring in a whole class of potential buyers who could afford higher prices. This is similar to high-end cars--without financing, some luxury car buyers would instead buy lower-end models. Part of the appeal is the "only $XX per month" pitch. It is not all about a sophisticated numbers analysis, and the ease of getting financing is important. I do not think anyone would claim that house prices (especially for higher value homes) would be even close to their current levels if resale financing (comparable in all respects to new home financing) was not readily available.
 

klpca

TUG Review Crew: Veteran
TUG Member
Joined
Sep 11, 2006
Messages
8,273
Reaction score
7,280
Points
749
Location
CA
Resorts Owned
SDO, Quarter House, Seapointe, Coronado Beach, Carlsbad Inn, Worldmark
Which is exactly what I did.

Negotiated a cash price and then paid it with a monthly loan payment that was that price divided by 60. The “best price” is what they were willing to accept in a cash deal and that I was willing to pay.

How the manufacture’s captive finance company makes money is not my problem:D. The difference between what the dealer paid for the car and what I paid, based on my research, was about $500 for the car I got. No problem with that. Whatever additional incentives the manufacturer gave to the dealer to move the iron is unknown to me.

Bottom line, the cash price and the 0% finance price were the same.

Cheers
Same experience here. Did the whole deal assuming cash then asked about no cost financing later. The best was when the finance guy tried to talk me into leasing - payments were about the same only I didn't own the car after 3 years (or something along those lines - it was almost 7 years ago). With the quoted 0% interest rate it was pretty easy to compute the interest rate on the lease.
 

cd5

TUG Member
Joined
Mar 20, 2008
Messages
386
Reaction score
404
Points
423
Location
Montreal, Canada
Resorts Owned
Embarc
They supply the financing as well - and make a ton of money with that as well as the inflated sales price and the forfeitures. It's not property, in most cases - its a "right to use" and you often find the exact same accommodations on third part lodging sites with less restrictions and no "buy-in" required. So no, I don't believe lack of financing is the reason the price is low. It's the developers themselves that make the resale product less attractive by removing the "extras" they offer with those bought directly from them. They market their product, pay a high commission to sell it and offer all the "extras", something resale seller can't do. In any event, given the price à resale timeshare usually goes for, you shouldn't need to finance ergo no "market" for financing.
If this is the case, then why hasn't the bottom fallen out of developer sales?
 
Top