Highlights from the Dave Ramsey Show

Question: A Twitter listener asks what Dave thinks about timeshares. Dave says you should never buy a timeshare.

Dave Ramsey's advice: They suck. Never buy a timeshare. Never buy a timeshare. There is no market to resell them, and so all you did was prepay your hotel bill for six years. Stupid. You can't get rid of it. You're stuck in it. Don't buy them. They have no value. There is no market to resell them. You can't give the freaking things away. Don't buy timeshares. They have a 97% customer dissatisfaction. They're one of the worst products out there.

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Question: Ellen on Facebook asks why Dave isn't a fan of timeshares. Dave is more than happy to explain why.

Dave Ramsey's advice: Oh, let me count the ways. Number one, you pay $14,000 or $15,000 or $9,000 or $29,000 to get to use a one- or two-week period of time in a property that you don't own. You cannot sell it because there's no market for it. No one will buy your timeshare. So what did you do, effectively? You prepaid the rent on a condo or an apartment or even a home in a luxury area or a resort area for 15 years ahead of time. That's what you did. You prepaid your rent for 15 years.

Some of the deals work and you can trade them for other weeks in other places, but most of that's a bunch of hooey. It doesn't work. Otherwise, you're going to the same place every year, and you just prepaid your rent. Why don't you just go down there and rent from somebody? And maybe you don't want to go there next year, so you go someplace else and rent.

There are a few places you may want to go back to over and over again, but most of us want some variety in our travel. So there's no market for it for resale. It's a total consumption item. If you interview people who have bought timeshares, you will find about 97% of them feel ripped off and say that the purchase sucks and they wish they hadn't done it. When you've got anything that has a 97% dissatisfaction rate, that ought to give you a hint. It's one of the few financial mistakes I haven't made.

You don't own an asset here. It's air. You just consumed it. All you did was rent a hotel room or apartment or condo and prepay your rent for 15 years. That's stupid. There's no point in it. You get nothing for doing that except the loss of choices and the loss of your money. That's why I hate them.

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Question: Jennifer in Pittsburgh and her husband bought a timeshare in 2002. They paid $12,000 for the basic point system. They've never used it even though they've had it all these years. They've unsuccessfully tried to sell it. Now they've been approached by another company. After Dave gets the details, he offers another idea.

Dave Ramsey's advice: I'd offer them 20% to be settled upon the time they send me a check. Escrow accounts can be manipulated. It could be on the up and up, but I'm not going to personally bet $1,200 on somebody that contacted me from New Jersey living in Pittsburgh. I didn't contact them, and just because you haven't been able to find anything negative on them doesn't mean it's not out there. It scares me to death. I'm not doing that. I think it's a good way to lose $1,200.

Upfront is just not an option. If you can sell the thing, I'll give you a percentage of it if you can get my money back. Real estate agents do that all the time. There's a formal closing that takes place with a timeshare. When you sign the paperwork, they can withhold from the closing—from the proceeds—that whole thing.

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