| Update: RV Time Shares and Fractional Ownership by Jaimie Hall-Bruzenak |
| Question: How can you go road tripping in an upscale RV without having to shell out half a million dollars to buy one? Answer: Buy a time share or fractional ownership. These ownership options have lots of potential for the recreational traveler, but they also have some pitfalls. Jaimie Hall-Bruzenak gives an update. |
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Update June 2021: In the early 2000s there was a lot of discussion about various ways to own high-end RVs. The buzz was all about “Fractional Ownership”. By 2007, almost all of the companies involved in this practice were out of business or otherwise disgraced. We have left the pages about this practice live on the RTA site, providing a historical perspective on these practices. To our knowledge, none of these businesses have been active since about 2010.—RTA Editors.
Many people have contacted me over the past two years about a column I wrote for RoadTrip America called "Fractional Ownership: Time Share RVing." Most of them wanted more information. When I was recently contacted by a company with a new approach, ShareACoach, I figured it was time for an update on the subject.
An RV time share or fractional ownership can be appealing for two reasons. First, you have the use of an RV without the large capital outlay. Second, you can get a larger, more upscale RV than you can with a typical RV rental. If you want to go RVing for only a few weeks of the year, a fractional ownership or time share might be the way to go.
Miguel Edwards thinks so. Edwards is vice president of sales and marketing at ShareACoach LLC, a Montana company that offers time shares on Country Coach motor coaches. "Our studies found that the average person buys an RV, uses it for 21 weeks, then sells it," Edwards says, pointing out that if you purchase a Country Coach outright, your half-million dollar investment will take a big hit in depreciation when you decide to sell. According to Bob Gummersall, chief technical officer at RVers Online, as well as other analysts, new RVs typically lose 20 percent to 30 percent of their value the moment you drive off the lot.
The typical RV fractional-ownership arrangement is set up as a limited liability company (LLC), usually for a three- or five-year period. You purchase one or more shares in a particular coach and have the use of it for specified weeks. At the end of the time period, the RV is sold and the proceeds are split among the owners. The LLC is designed to limit personal liability, so you are protected in the event that one of the other owners has an accident.
ShareACoach
ShareACoach works a little differently. Instead of selling fractional ownerships, it sells 10- and 21-week memberships, which Edwards describes as true time shares. Unlike fractional ownership, you are not limited to a particular time period or to a single coach. You can use your weeks all in one year or spread them out over several years. The company has six Country Coaches in its own fleet and has access to additional units, which are similar, through another program. ShareACoach promises that if you make your reservation for a coach 90 days in advance of your road trip, you will have a coach -- guaranteed.
Memberships are not cheap. The 10-week membership costs $45,000 and the 21-week membership costs $85,000. According to Edwards, this is less than you would pay to rent a similar unit. Plus the coach is delivered to wherever you would like to start your trip and is picked up wherever you finish. Moreover, ShareACoach operates as an LLC, assuming most of the operating liability unless you are grossly negligent or disregard prohibited uses. It's similar to a rental car agency in that respect.
Current fractional ownership companies
I located two other companies on the Web offering fractional ownerships at this time:
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A third company on the Web, Share RV, has a Web site almost identical to Coach Share, but there is no address or telephone number listed on the site and my e-mails came back marked "undeliverable." The company is apparently not operating at this time.
Two of the three companies listed in my column two years ago no longer have active Web sites; presumably, they have gone out of business. The Orlando (Fla.) Sentinel reported in January 2007 that another company, Universal Luxury Coaches LLC, which had also offered fractional sales, had gone out of business and that 172 investors had lost money in a scheme that left two executives in the company facing fraud and racketeering charges.
Before you participate
The checkered histories of some of these fractional-sale companies should serve as a warning: Investigate any fractional-sale or time-share arrangement thoroughly, and have a lawyer review the contract. Ask a lot of questions. If the company went under before selling all the shares for your unit, what would happen to your investment? Does the company have related businesses in the industry or a partnership with a manufacturer? Are there any extra fees? (Most companies have some sort of maintenance fee in addition to the cost of membership or the cost of your shares. ShareACoach waives this fee if you pay the entire price of your membership upfront; otherwise, you must pay a monthly maintenance fee until you use up your weeks.)
Time shares and fractional ownerships are excellent ideas that work well for houses, boats and airplanes. With the right company, it could work for upscale RVs, too.
Jaimie Hall-Bruzenak
10/14/07
