Could everyone possibly be paying cash for resales??

[DMKEDM]

How do you count 0% interest loans? I bought all 515 of my points (in six contracts) by using 0% interest credit card loans (and all were repaid in full prior to any interest charges kicking in). Is that financing? I didn't pay a penny in interest (and it was before there were transaction fees, too, so I didn't pay anything at all for the use of that money).

But I don't have a problem w/financing...time and how you spend it can matter as much or more as money and how you spend it. Each year (or month or decade) you wait is vacation time (and memories) you don't get. By me, if you can afford the monthly payments and frequent Disney trips are a priority for you, then just count the interest as part of the cost to purchase, go for it, and enjoy. DVC/Disney trips are not all about money. Of course the money matters. You do have to be able to afford it. (and you get to decide the affordability issue). But so what if it costs more to finance? You get Disney time you wouldn't get if you waited. And that's worth a lot to a lot of people.

 

[crisi]

How do you count 0% interest loans? I bought all 515 of my points (in six contracts) by using 0% interest credit card loans (and all were repaid in full prior to any interest charges kicking in). Is that financing? I didn't pay a penny in interest (and it was before there were transaction fees, too, so I didn't pay anything at all for the use of that money).

But I don't have a problem w/financing...time and how you spend it can matter as much or more as money and how you spend it. Each year (or month or decade) you wait is vacation time (and memories) you don't get. By me, if you can afford the monthly payments and frequent Disney trips are a priority for you, then just count the interest as part of the cost to purchase, go for it, and enjoy. DVC/Disney trips are not all about money. Of course the money matters. You do have to be able to afford it. (and you get to decide the affordability issue). But so what if it costs more to finance? You get Disney time you wouldn't get if you waited. And that's worth a lot to a lot of people.

I count loans where money is in the bank as leverage. If you can do it, and are smart about it, its fine. Most people don't have the discipline or savings to pull it off.

Here is the deal, you can make memories and go on vacation without DVC. You can do Disney cheaper than with Disney than with DVC - and certainly cheaper than with DVC if you pay interest. I think your second point is a red herring.

 

[DISNEYSC]

We financed for a short time using LightStream and paid off early. I'd do it again since we're a bit Disney addicted and the amount we paid on interest was a lot less than we would have spent on our trips that year.

To each his own.

 

[criddopher]

If you like deluxe resorts, on a smaller contract at least, (i did math on 150 pts of SSR) even riding out the finance on moneras nearly worst rate of 13.9% you end up at like 1300 a year over the full run of the contract. I know dues will increase so on so it not 100% accurate. But to compare I just paid 1450 for 6 nights in a Savannah view AK studio renting points. If i paid cash to disney it would be 2400. So you still save money in the long run assuming you use all those points every time. That same 150 pts costing you around 1300 could get you what? 8 days in august (when im going) for 100 bucks less. And studios are a bad comparison you save more if you use 1br. So yeah, financing might not be the smartest financial move. You should buy your car and house outright also but many people cant do that either. What I'm really saying is so what? you still save money, and you go to disney! Im pretty sure many many years from now youre not going to be wishing you saved that 4 grand of interest costs, youll be savoring the memories you made in disney..

 

[hbrother]

I'd go with https://www.lightstream.com, rather than the others to finance. 5.99 vs 10%+

 

[Dean]

I'd go with https://www.lightstream.com, rather than the others to finance. 5.99 vs 10%+

While I always recommend against financing, if I were going to finance I'd only consider this type of option. Light stream is the best I know of and I find the fact it's not tax deductible irrelevant. I'd start with my local bank/credit union and see what I could get there. I would NEVER EVER recommend a HELOC or CC no matter how favorable the interest rate seemed.

 

[Orsino]

And studios are a bad comparison you save more if you use 1br.

This is the second mention that 1bedrooms are more cost efficient with DVC than studios in this thread. Is this generally accepted to be true? I always thought studios were more cost efficient. I've never had a 1 bedroom, but when I got a 2 bedroom and a studio BLT the studio was more cost efficient.

Value Per Point = Cost of Room in $ / Cost of Room in DVC points

 

[crisi]

This is the second mention that 1bedrooms are more cost efficient with DVC than studios in this thread. Is this generally accepted to be true? I always thought studios were more cost efficient. I've never had a 1 bedroom, but when I got a 2 bedroom and a studio BLT the studio was more cost efficient.

Value Per Point = Cost of Room in $ / Cost of Room in DVC points

You won't break even if you compare a Disney hotel room to staying in a one bedroom. One bedrooms are more points than studios - and are going to be more expensive than staying in a Deluxe hotel room in the vast majority of circumstances. If you compare one bedroom rack rates to saying on points you can get there. And if you are very disciplined about using the kitchen and not eating out, you might get there.

 

[MsTessP]

If you like deluxe resorts, on a smaller contract at least, (i did math on 150 pts of SSR) even riding out the finance on moneras nearly worst rate of 13.9% you end up at like 1300 a year over the full run of the contract..

The truth is that only a minority of members will own their contracts at their expiration date. I'm sure that most of the thousands of members who have sold their contracts on the resale market also thought at purchase that they would own their DVC membership until the expiration of their resort. Even those who believe that they will pass down the membership to their children cannot be certain that their children will even wish to be burdened with the membership fees or will still have the finances or the desire to continue to regularly vacation at Disney.

For this reason, I would be careful in using "over the full run of the contract" to rationalize this serious financial decision or to determine how much your decision costs yearly when you do not know for certain what will be the number of years in the equation.

 

[jerseyduke]

Everyone's situation is different. To me, debt is debt. If you pay cash for a DVC contract and then go finance a car, that is the same thing as financing the DVC purchase and paying cash for the car (of course, interest rates are different) but the principle is the same; you are taking on a debt. This should be done judiciously. Everyone's situation is different.

I am financing a portion of a resale purchase. 1. It is a small portion, and 2, it is because I do not want to incur a capital gain that would enable me to pay all cash. All in all, it is going to add about 2$ per point to my purchase price, so the contract I just got at 87 per point, is going to cost me about 89 per point. I think I would have had a hard time getting another contract at 89 per point, so it made some sense.

the big thing is money paid in interest is money you can not do something else with. Do not burden yourself with debt.

To me cash means cash in a bank. I am probably never going to have enough "CASH" to pay for a contract. I am not going to have 10K+ sitting in a checking account making today's whopping .02%, it will be going elsewhere, so I am always going to be less liquid.

The ironic thing about all of this is the crazy rise in direct prices -
When Grand Floridian went on sale to the General Public, 3 years ago this May, it was 150 per point. If you had financed 50% of the purchase at Disney's friendly 12.99% (crazy) and paid it off in 3 years (which would mean you would be paying it off this year), with interest, your effective cost per point would be 166$ (I did 200 points for 30k, 15k in cash, 15k financed at 12.99 - meaning about 3200 paid in interest). Currently VGF points are at 170, and if rumors are correct, going up to 180.

The above is not a statement justifying financing, it is a statement to suggest that the prices per point buying direct are raising at a ridiculous rate; when it is actually 'cheaper' to pay 12.99% interest than to save up....that is nuts. I wonder where the end of the line is.

 

[crisi]

To me cash means cash in a bank. I am probably never going to have enough "CASH" to pay for a contract. I am not going to have 10K+ sitting in a checking account making today's whopping .02%, it will be going elsewhere, so I am always going to be less liquid.

You should consider having that much sitting liquid. Rule of thumb is six months living expenses - for most people now that's at least $10k. Money invested doesn't do you as much good if you lose your job in a recession with a down market. Money spent usually doesn't do you any good at all - unless you've built a survivalist pantry with it.

 

[a742246]

We paid cash but we waited until all our kids were out of college ( didn't have cash when they were in college), We started by buying a small contract first, then the next year buy another, third year bought another, and the fourth year bought another.

 

[jerseyduke]

You should consider having that much sitting liquid. Rule of thumb is six months living expenses - for most people now that's at least $10k. Money invested doesn't do you as much good if you lose your job in a recession with a down market. Money spent usually doesn't do you any good at all - unless you've built a survivalist pantry with it.

Exactly....rule of thumb. That rule of thumb is a safety net, and I do have a safety net, just one that fits my situation. As i said, everyone's situation is different.

 

[suebeelin]

You should consider having that much sitting liquid. Rule of thumb is six months living expenses - for most people now that's at least $10k. Money invested doesn't do you as much good if you lose your job in a recession with a down market. Money spent usually doesn't do you any good at all - unless you've built a survivalist pantry with it.

Everyone has different savings goals.... For me, having AT LEAST a year of cash (preferably more) is a good rule of thumb. Many ppl lose their jobs and it takes more than a year to get a new job.

yes, everyone is different.

I'm probably the opposite extreme.

 

[Princess Yvey]

I am on the verge of buying DVC but need to wait for a few more things in life to happen. But when I do pull the trigger, I will need to finance. I know people on here STRONGLY recommend against financing, but I can't believe that a majority of the people that are buying resales on this forum are all paying cash. Do people really have that type of disposable income at their fingertips to just keep adding on contracts? Maybe they do, but I'd be surprised....

We just purchased resale - all cash. We see vacations and DVC as a luxury so that's something we would only do if we had the money for it.

It took us two years to decide on which property, our absolute high amount per point we were willing to pay, and just looking for the right opportunity. If you feel like you need a few more things to happen before pulling the trigger- then do so... There will be a contract "worth it" when you're ready we found a great one at Beach Club!

 

[steffani]

Check out Dave Ramsey.

 

[crisi]

Exactly....rule of thumb. That rule of thumb is a safety net, and I do have a safety net, just one that fits my situation. As i said, everyone's situation is different.

It is, but if that is a valid rule of thumb, and we grant that most people are fiscally responsible, we have a lot of people who can pay cash for DVC.

(I didn't follow it myself for a long time - we had two adults working and were living off one income while stashing the other into 529s. Job loss would have meant just not saving for college. Now we don't worry about college funding, have one adult working, and six months liquid).

 

[michelleiada]

We paid cash for our 250 pt BCV contract four years ago. I wanted so badly to buy into DVC for many years but waited until I had saved the cash to do it. Now I have addonitis and very badly want another contract. I have a savings specifically for it and will purchase when I find the right contract and have the cash to pay for it.

 

[DVCcurious]

Sha la la la la la live for today
And don't worry 'bout tomorrow, hey.

I did a 401k loan for our DVC. It would take YEARS to save that much cash. Who's got that kind of time to wait?

 

[hayesdvc]

Sha la la la la la live for today
And don't worry 'bout tomorrow, hey.

I did a 401k loan for our DVC. It would take YEARS to save that much cash. Who's got that kind of time to wait?

The way the market has been lately sad to say that a Disney timeshare might be safer bet and the interest you are paying on your loan, you are paying back to yourself.