DVC RESALES
DVC RESALES

Go Back   The DIS Discussion Forums - DISboards.com > Disney Vacation Club > Purchasing DVC
facebooktwitterpinterestgoogle plusyoutubeDIS UpdatesDIS email updates
Register Chat FAQ Tickers Search Today's Posts Mark Forums Read





Reply
 
Thread Tools Rate Thread Display Modes
Old 01-12-2013, 10:57 PM   #76
ELMC
DIS Veteran
 
ELMC's Avatar
 
Join Date: Jul 2011
Location: Connecticut
Posts: 1,981

Quote:
Originally Posted by MichiganDVC View Post
Point is, how many people can really buy, with cash in hand, a 160 point resale contract at AKV? That's $13,000 roughly. OR...they can finance $22,000 for those same points for up to 10 years.
Quote:
Originally Posted by JimMIA View Post

So essentially, your strategy is to purchase at more than double the price, and then finance at a higher interest rate than is available elsewhere -- possibly 10% higher?

Why? Because you want it?
What's surprising to me is the poster's open admission that they are paying double AND financing. Typically the justifications don't ever address this difference in cost. People buying direct and financing are not paying $22,000, they are paying $307 a month with 10% down. We all know that this is the salespeople's way of getting potential buyers to ignore this significant price discrepancy. In those cases it's helpful to point out the real numbers and the fact that one would most likely be paying triple the cost of resale over 10 years. More times than not this sparks some kind of realization and perhaps even a change of heart. But when someone admits knowing that ahead of time and still wants to proceed, I think all we can do is wish them luck. And yes, maybe do this...
__________________
ELMC is offline   Reply With Quote
Old 01-13-2013, 08:34 AM   #77
GoofyDad1970
Earning My Ears
 
Join Date: Jan 2013
Posts: 35

Generous interest rate?!?

Quote:
Originally Posted by MichiganDVC View Post
I tried to read through all the posts, but I may have missed this. Resale buyers do NOT get the generous financing that Disney direct buyers do. We are required to have $10,000-$20,000 in cash all at once. (Yes, some may choose to get their own loan, but at a higher interest rate than Disney offers.)

Point is, how many people can really buy, with cash in hand, a 160 point resale contract at AKV? That's $13,000 roughly. OR...they can finance $22,000 for those same points for up to 10 years. So, unless you have $13,000 in cash, your best bet is to finance with Disney for 10 years. Much more affordable. So, let's not pretend that buying resale is this golden piece of cake. You have to have tens of thousands of dollars available, right now.

WHAT?!?! Disney's interest rate is outrageous! They told me it would be around 13% and they never even did a credit check. I financed 250 AKV resale points with my bank for around 3% over five years, which I am fortunately in a position to pay in two years. Many on this board would argue that even my financing deal was a bad one, but clearly 13% over ten years is insanity. I actually thought about financing through Disney with a direct purchase, or financing a resale through the place recommended by the timeshare store, and I am just grateful I came to my senses.
GoofyDad1970 is offline   Reply With Quote
|
The DIS
Register to remove

Join Date: 1997
Location: Orlando, FL
Posts: 1,000,000
Old 01-13-2013, 09:53 AM   #78
ELMC
DIS Veteran
 
ELMC's Avatar
 
Join Date: Jul 2011
Location: Connecticut
Posts: 1,981

Quote:
Originally Posted by GoofyDad1970 View Post
WHAT?!?! Disney's interest rate is outrageous! They told me it would be around 13% and they never even did a credit check. I financed 250 AKV resale points with my bank for around 3% over five years, which I am fortunately in a position to pay in two years. Many on this board would argue that even my financing deal was a bad one, but clearly 13% over ten years is insanity. I actually thought about financing through Disney with a direct purchase, or financing a resale through the place recommended by the timeshare store, and I am just grateful I came to my senses.
At 3%, financing your resale purchase may be more about leveraging debt and could actually make sense, especially when you consider what money you would spend on non-DVC vacations that would not have applied to your purchase. You bring up a good point, though. I think it's important to distinguish between financing a resale purchase at 3% and financing a direct purchase at 13.99%. They are two very different things.
__________________
ELMC is offline   Reply With Quote
Old 01-13-2013, 10:07 AM   #79
Dean
DIS Veteran
 
Dean's Avatar
 
Join Date: Aug 1999
Posts: 31,573

Quote:
Originally Posted by ELMC View Post
At 3%, financing your resale purchase may be more about leveraging debt and could actually make sense, especially when you consider what money you would spend on non-DVC vacations that would not have applied to your purchase. You bring up a good point, though. I think it's important to distinguish between financing a resale purchase at 3% and financing a direct purchase at 13.99%. They are two very different things.
The problem with the cheaper choices is often the added risk. If you do it on a CC (and have other CC debt) such that you might jump to an even higher interest than DVC or risk your home, the risk could actually be more than the cost for the direct interest, in my book. For those that have CC debt, there are other ways to kick in that 20% range of interest than simply being late on a payment. For some, just your debt circumstances can do it in some cases.
__________________
Dean
Dean is offline   Reply With Quote
Old 01-13-2013, 04:45 PM   #80
GoofyDad1970
Earning My Ears
 
Join Date: Jan 2013
Posts: 35

Quote:
Originally Posted by Dean View Post
The problem with the cheaper choices is often the added risk. If you do it on a CC (and have other CC debt) such that you might jump to an even higher interest than DVC or risk your home, the risk could actually be more than the cost for the direct interest, in my book. For those that have CC debt, there are other ways to kick in that 20% range of interest than simply being late on a payment. For some, just your debt circumstances can do it in some cases.
Dean, I did not put it on a credit card. Having said that, if you know where I can get a credit card that has a fixed rate of 3%, please let me know the name of the lending institution. Thanks.
GoofyDad1970 is offline   Reply With Quote
Old 01-13-2013, 04:59 PM   #81
Illini Al
Mouseketeer
 
Join Date: Feb 2010
Location: Illinois
Posts: 97

Quote:
Originally Posted by GoofyDad1970 View Post
WHAT?!?! Disney's interest rate is outrageous! They told me it would be around 13% and they never even did a credit check. I financed 250 AKV resale points with my bank for around 3% over five years, which I am fortunately in a position to pay in two years. Many on this board would argue that even my financing deal was a bad one, but clearly 13% over ten years is insanity. I actually thought about financing through Disney with a direct purchase, or financing a resale through the place recommended by the timeshare store, and I am just grateful I came to my senses.
3% isn't bad, especially if you're going to pay it off in two years. For the total amount we're talking, I'd still pay cash, but I understand that many can't.
I'm generally against financing anything associated with a vacation, but I know lots do. Congrats on your purchase and have fun!!
Illini Al is offline   Reply With Quote
Old 01-13-2013, 05:51 PM   #82
Dean
DIS Veteran
 
Dean's Avatar
 
Join Date: Aug 1999
Posts: 31,573

Quote:
Originally Posted by GoofyDad1970 View Post
Dean, I did not put it on a credit card. Having said that, if you know where I can get a credit card that has a fixed rate of 3%, please let me know the name of the lending institution. Thanks.
If you'd like to share you're welcome to. I was simply trying to point out that most of the options people have used to try to purchase with less interest have risk, sometimes significant risk. Some CC are actually free for some situations, assuming you dot the I's and cross the T's and many have posted about doing so, esp the Disney CC. I think some of the options that people have used include CC, second mortgage or HELOC, car loans and secured loans against CD's or similar. All have risk but some more than others. However, even at 3% against a CD, it is still a poor choice, IMO.
__________________
Dean
Dean is offline   Reply With Quote
Old 01-13-2013, 11:13 PM   #83
ELMC
DIS Veteran
 
ELMC's Avatar
 
Join Date: Jul 2011
Location: Connecticut
Posts: 1,981

Quote:
Originally Posted by Dean View Post
If you'd like to share you're welcome to. I was simply trying to point out that most of the options people have used to try to purchase with less interest have risk, sometimes significant risk. Some CC are actually free for some situations, assuming you dot the I's and cross the T's and many have posted about doing so, esp the Disney CC. I think some of the options that people have used include CC, second mortgage or HELOC, car loans and secured loans against CD's or similar. All have risk but some more than others. However, even at 3% against a CD, it is still a poor choice, IMO.
I think this is an important point you're making and it does tie back to leveraging debt. For example, a business parther of mine is involved in a great municipal bond fund. It returns 7% annually, tax free. For him it makes sense to take the money he would spend on DVC and instead invest it in the bond fund and finance the DVC purchase. This would net him 4%. Obviously it would be cheaper not to buy at all, but we're operating under the assumptions that we have all decided to spend some amount of our net worth on vacations, specifically DVC.

My point is, if you have a next best alternative for the money that returns a higher interest rate than the interest you pay on the loan, financing a DVC purchase may make sense (assuming you factor in risk, liquidity, overall DTI ratio, etc.). But I will suggest that this is most likely applicable to a very small percentage of people's situations.
__________________
ELMC is offline   Reply With Quote
Old 01-14-2013, 06:59 PM   #84
Dean
DIS Veteran
 
Dean's Avatar
 
Join Date: Aug 1999
Posts: 31,573

Quote:
Originally Posted by ELMC View Post
I think this is an important point you're making and it does tie back to leveraging debt. For example, a business parther of mine is involved in a great municipal bond fund. It returns 7% annually, tax free. For him it makes sense to take the money he would spend on DVC and instead invest it in the bond fund and finance the DVC purchase. This would net him 4%. Obviously it would be cheaper not to buy at all, but we're operating under the assumptions that we have all decided to spend some amount of our net worth on vacations, specifically DVC.

My point is, if you have a next best alternative for the money that returns a higher interest rate than the interest you pay on the loan, financing a DVC purchase may make sense (assuming you factor in risk, liquidity, overall DTI ratio, etc.). But I will suggest that this is most likely applicable to a very small percentage of people's situations.
Clearly a 3% loan with little risk (not tied to house, car, etc) isn't a big deal for one that can "afford it" otherwise. To me the behavior in question is far more damaging than the simple dollars involved. Personally I'm not sure that any debt is good no matter what the likely return is, but that's esp true for an individual over a company.
__________________
Dean
Dean is offline   Reply With Quote
Old 01-14-2013, 09:19 PM   #85
ELMC
DIS Veteran
 
ELMC's Avatar
 
Join Date: Jul 2011
Location: Connecticut
Posts: 1,981

Quote:
Originally Posted by Dean
Clearly a 3% loan with little risk (not tied to house, car, etc) isn't a big deal for one that can "afford it" otherwise. To me the behavior in question is far more damaging than the simple dollars involved. Personally I'm not sure that any debt is good no matter what the likely return is, but that's esp true for an individual over a company.
I agree. I am often taken aback by the nonchalant way many people talk about going into significant debt over a rapidly (actually immediately) depreciating asset. It scares me. The reason I worked so hard to get such a low price on my resale contracts is because I wanted the ability to completely change my mind a year from now and be able to get most (or all, or ever more) of my money back. I don't plan on doing that, but it's nice to have the option. I would be uncomfortable buying at today's direct prices and having absolutely no reasonable exit strategy.
__________________
ELMC is offline   Reply With Quote
Old 01-15-2013, 03:01 PM   #86
djwood24
Earning My Ears
 
Join Date: May 2007
Location: Catskill NY
Posts: 10

I paid cash for my resale a few years back and do not regret it at all
I like most say wouldn`t finance it as I hate paying interest on vacations
djwood24 is offline   Reply With Quote
Old 01-15-2013, 10:21 PM   #87
Mickey'sApprentice
Shamelessly demand, it works better
DIS Veteran
 
Mickey'sApprentice's Avatar
 
Join Date: Dec 2005
Location: Montgomery, Alabama
Posts: 4,504

Quote:
Originally Posted by JimMIA View Post
There is a problem with this egalitarian approach. How does DVD differentiate direct sales and make them more attractive except by giving direct buyers something they don't give all owners?

Dean's example above of airlines is very apt. When I fly American Airlines (which is almost always), I am treated WAY better than someone who flies only occasionally. I get preferred seating they can't even hope to book, early boarding so I never have to worry about having a place for my carryon stuff, free baggage check instead of paying, and LOTS of other stuff. And if the weather is nasty, I get home as soon as possible and they don't because the airline bumps them off their scheduled, confirmed flight so they can put me in their seat. AA has even re-routed me so they could do that.

Is that "equal treatment?" Of course not. On the other hand, if I spend more money each year with them, is it really "fair" to give people who don't the same treatment I get? I don't think so. Preferential treatment of your better customers is sound business practice.

I would not be at all surprised to see DVC eventually go to some kind of a VIP program based on direct purchase of a certain (high) level of points. There are numerous models for that type of program in the timeshare world -- DVC is one of the few who doesn't use it...yet.

I really doubt DVC would ever go to home-resort only booking for resale customers; that would destroy their model and really wouldn't be good for direct purchasers either. But there are many, many other things they could do.
We last stayed at WL Hotel in 2005. At previous trips had been in 1992, 1994, and 2002. We paid extra for a courtyard view and received the bottom corner room on the villas side that overlooked some trees. The room view really belonged on that thread for bad views.

Fast forward to last week. We had joined DVC in 2006, bought APs starting in 2009 and had stayed many nights on AP rates at non-DVC hotels. We reserved using AP rates, and paid for a woods view. Well...our view and room was fabulous!! We had a 4th floor room overlooking the beautiful courtyard and Bay Lake.

Plus, everytime we stay at Port Orleans before or after our DVC stays we get larger corner rooms.
__________________
Apr '92 Off Property (Honeymoon): Dec '94, Feb '02 CR: Jan '05 WL/POR: Nov '06, Jan '09 HHI: Apr '07: First Trip "Home" to BWV: Jan '08: BWV, Mar '09: POR/BWV: Jan. '10 POR/AKV (Jambo), July '10: POFQ/BCV: Dec '10 AKV (Kidani)/POR:Sep. '11 POR/BWV, Jan '12: POP, Apr '12: POR/BWV, Jan '13: Conference/WL, Jul "13:POR. Dec '13: DOL/BLT, Jul '14: BWV 40th B-day Trip Report

Mickey'sApprentice is offline   Reply With Quote
Old 01-16-2013, 07:17 AM   #88
Disney Doll
DIS Security Matron
 
Disney  Doll's Avatar
 
Join Date: Nov 2000
Location: Too far from WDW!! :(
Posts: 28,903

I've never been treated differently by any DVC person because of my resale.

I have found the salespeople, when I have encountered them, to be lovely and conversant, like to talk about what you own, what you bought, how you bought and how you use it.

Maybe you just hit someone having a bad day? Or you hit someone who isn't goign to work for Disney for long....
__________________
Disney Doll
Prepare your child for the path, not the path for your child.
Stop telling your God how big the storm is. Instead, tell the storm how big your God is.
It's time to put on your big girl panties and deal with it!
Don't be so open-minded that your brains fall out.
There's no pill that cures stupid.
He is your friend, your partner, your defender, your dog.
You are his life, his love, his leader.
He will be yours, faithful and true, to the last beat of his heart.
You owe it to him to be worthy of such devotion.
~~In loving memory of Teddy~~1994-2007~~
Disney  Doll is offline   Reply With Quote
Reply



Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

DVC-Resales.com | 1-800-550-6493 (Contact The Timeshare Store) | DVC Resale Listings

facebooktwittergoogle plus youtube itunesDIS Updates
GET OUR DIS UPDATES DELIVERED BY EMAIL



All times are GMT -5. The time now is 09:18 AM.

Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

Copyright © 1997-2014, Werner Technologies, LLC. All Rights Reserved.