DECISION TIME! Why I'm prob going to pass on buying into DVC

[Airb330]

5) Long term savings. Now this is the ONE benefit I can get behind, but I suspect a lot of people have themselves talked into savings that they really aren't going to see. I absolutely know if I go to WDW twice a year for the next 30 years...owning will save me $. But for me, and probably a lot of others even if they don't want to admit it...I won't go to WDW enough over the next 30 years to realize that savings. My vaction this year is gonna cost me about $3000. If I owned DVC and went twice it would cost me about $4800. So yes I'd "save" $1200 but I'm also spending $1800 more than I normally do because I'm taking 2 vacations instead of 1. If a person would take 2 trips a year regarless of owning or not...and they go twice a year for decades...yes, it will save them. That's not me though...and I bet it's not a lot of people who own DVC. $

You also would be going twice and presumably getting more enjoyment out of it. No one is forcing you to go once or twice.

Is there something I'm missing? Another benefit you get by owning DVC vs renting? If these are the majority of the benefits...they're not really benefits because you can get them without owning. After looking at the #'s for the past week I don't see any major benefit that I can get by owning...but I do see the large up front cost of owning as a major negative. It will take me 14 years to essentially "get my money back" by owning DVC. Given the fact that renting will give me almost everything an owner can get....I see renting periodically at a higher point cost as a much better financial decision than paying the large up front cost to own. If I were 25 years old and planned to go twice a year forever...then I'd own. But I'm 40 and go once a year and occasionaly twice. For someone like me it's a bad financial move and one I can avoid by renting and still enjoying almost all the benefits of owning.

You keep saying "14 years". So when you are 54 will you want to vacation at WDW? If yes, then buying may be a good idea. If not, then no. Move on and book cash or rent points. I feel like you want us all to convince you, but you seem really stuck on the 14 year figure. Why not consider a smaller contract? If you really don't want to go that often, a smaller contract makes more sense, or as you say, renting may be better for you as well as an infrequent visitor.

 

[theguda]

[/QUOTE]You keep saying "14 years". So when you are 54 will you want to vacation at WDW? If yes, then buying may be a good idea. If not, then no. Move on and book cash or rent points. I feel like you want us all to convince you, but you seem really stuck on the 14 year figure. Why not consider a smaller contract? If you really don't want to go that often, a smaller contract makes more sense, or as you say, renting may be better for you as well as an infrequent visitor.[/QUOTE]

A smaller contract is going to have to same payback time of 14 years +/-...depending on the final price of the contract. My issue is that a lot of DVC owners say "if you go every year...even every other year...then owning is the way to go"...and that simply is not true unless you buy in young and go to WDW multiple times per year. If you go to WDW once a year then you're wasting money being a DVC owner...OR...you have been pursuaded to spend more money than you normally would by taking more vacations. Yes, you get to enjoy the extra vacation...but you have changed your normal behavior to "save" money even though you're actually spending more.

 

[sweetdana]

Finding someone to transfer the points to you can be difficult especially if you want to do it every year!!

it is not really hard at all.. at least I have found a willing/able/ party within 1-3 days so far every time I have been ready to buy since 2009. every yr.

the exact resort I wanted every time. 1 yr I bought the 2nd yr, for 2$ less by taking the yr I wanted and there next yrs were only 8$ or so..
I do not agree with this statement at all.

I have used dis for all buy 1 yr and tug for 1 yr.. if I buy points in 2013.. I intend to do the same.. so far I don't need them.. but will use this if I do.

 

[LisaS]

If you transfer points from another resort like BC....can you book BC at the 11 months window with those transferred points?

Yes. Transferred points retain their home resort and Use Year. If you transfer BCV points into your account you can use them to book BCV (and only BCV) 11 months out. You can use them to book any resort 7 months out.

 

[mjc2003]

At first glance this does seem very interesting. If you transfer points from another resort like BC....can you book BC at the 11 months window with those transferred points?

Yes. Transferred points retain their original use year and home resort priority. They can be banked, but not borrowed (I believe).

For the record, this is what we did. We needed about 275-300, but I only bought 200. I've done a transfer each of the last 2 years. You can only do one transfer a use year. Takes some work.

 

[sweetdana]

At first glance this does seem very interesting. If you transfer points from another resort like BC....can you book BC at the 11 months window with those transferred points?

YOU get what ever you buy ..

you transfer in BC June UY to your SSR Jan UR contract they follow JUNE BC UY rules. Meaning your bank/expiration date for your SSR contract are nothing.. ( and you can conbine them at 7 months with yours, if needed too.)



So yes, 11 months out, I booked 8 days in a 1 bedroom for f and w at the BC in oct.. using transferred in BC points. ( and being an SSR owner) . and if I have to cancel.. I will not lose them.

 

[LisaS]

They can be banked, but not borrowed (I believe).

Correct.

You can only do one transfer a use year.

To add to this, you can transfer points either into or out of your account (not both) once per UY.

 

[fmer55]

I don't understand this thread, on the ROFR thread you say you have an agreed contract, are you weighing your options and going to back out using your 10 day exemption? Is that what all this is about?

Your analysis is incomplete, as is all DVC analysis, IMO. You are trying to justify getting out of/not signing the contract, which is fully understandable. I recommend ripping up the contract and renting away, and letting the seller get back to selling his contract.

SSR ends in 2054, 41 years from now, obviously there is a breakeven point in there somewhere. IMO

 

[tjkraz]

4) Annual Pass. I've often heard people say if you go to WDW at least once a year then buying DVC is worth it. I assume part of the reason for this argument is having the ability to save on park passes by utilizing the AP, which costs a family of 4 about $1600. But let's say you only go to WDW one time per year. You can get 5 day hoppers for less than $1600. So the AP isn't a discount unless you go more than once.

People who visit 1x per year can still make use of Annual Passes if they stagger their trips accordingly.

An Annual Pass purchased (or activated) on July 1, 2013 is valid through July 1, 2014. Staggering trip dates just a bit easily allows folks to get two years worth of trips from one AP. In this example, the 2013 trip is take at the start of July while the 2014 trip is planned sometime before the end of June.

With that sort of pattern, not only do you get two years worth of trips under one AP but you buy the APs every-other-year instead of annual MYW pass purchases. After the July '13 AP purchase, the next buy wouldn't be until sometime in 2015.

A smaller contract is going to have to same payback time of 14 years +/-...depending on the final price of the contract.

Using your figures, I agree with that. (Although you will have to make some broad assumptions regarding future rental rates.)

But to cut right to the chase, after 14 years of renting you would have an empty bank account.

After 14 years of owning you would have a DVC contract with some value, plus the prospect of many more years of discounted vacations. As I said in my example, my points purchased 10 years ago would return 70-80% of what I paid if sold today.

My issue is that a lot of DVC owners say "if you go every year...even every other year...then owning is the way to go"...and that simply is not true unless you buy in young and go to WDW multiple times per year. If you go to WDW once a year then you're wasting money being a DVC owner...OR...you have been pursuaded to spend more money than you normally would by taking more vacations. Yes, you get to enjoy the extra vacation...but you have changed your normal behavior to "save" money even though you're actually spending more.

DVC ownership can work for pretty much any usage pattern. The important part is simply to not buy more points than you need. There are many people who own fewer than the de facto minimum of 160 points. By banking and borrowing, they are content with a single trip every 2-3 years.

On the other hand, there are people who visited WDW every 1-2 years and have dramatically increased their trip frequency after buying. To them, DVC was a way to spend similar dollars for more trips. And yes, this group does certainly end up spending a lot more of their hard-earned dollars at the Disney parks.

Either approach works.

 

[pmaurer74]

You're assuming that you'll always be able to rent points cheaply. I wouldn't assume that. A few years ago the "going rate" was $10 per point. In five years it could be $20 per point.

I was going to say the same thing.... or maybe in the future you may not be able to rent points at all. There is no guarantee.

 

[Missyrose]

I don't understand this thread, on the ROFR thread you say you have an agreed contract, are you weighing your options and going to back out using your 10 day exemption? Is that what all this is about?

Your analysis is incomplete, as is all DVC analysis, IMO. You are trying to justify getting out of/not signing the contract, which is fully understandable. I recommend ripping up the contract and renting away, and letting the seller get back to selling his contract.

SSR ends in 2054, 41 years from now, obviously there is a breakeven point in there somewhere. IMO

The OP started this thread before making an offer on a contract, but this thread has lived on...

 

[NHTikiBeckie]

The OP started this thread before making an offer on a contract, but this thread has lived on...

It was started yesterday, so he made an offer since then?

 

[bighoo93]

A smaller contract is going to have to same payback time of 14 years +/-...depending on the final price of the contract. My issue is that a lot of DVC owners say "if you go every year...even every other year...then owning is the way to go"...and that simply is not true unless you buy in young and go to WDW multiple times per year. If you go to WDW once a year then you're wasting money being a DVC owner...OR...you have been pursuaded to spend more money than you normally would by taking more vacations. Yes, you get to enjoy the extra vacation...but you have changed your normal behavior to "save" money even though you're actually spending more.

I've started to write this post several times, then every time I finish I decide nah, forget it, and then again the same thing comes up, so maybe I will actually post it this time.

I think it is worth keeping straight what a payback analysis is. It means how long it will take you to earn back the amount of money that you originally paid for your investment. A payback analysis doesn't include opportunity cost, among other things. It is a known weakness. It is a quick and dirty tool, with some value, but as with most analyses it is only one perspective and multiple dimensions give a better picture. Still, I think it is worthwhile to not speak of payback as 14 years, because it really shouldn't be even close to that. I think you are including an opportunity cost of investing your money in an interest-bearing account at 5% annually.

And as far as saving money, that is another thing that is routinely confused. Saving money on lodging and then subsequently choosing to spend that savings (and maybe more) on something else are separate decisions. When someone says they "saved money" on a purchase, that is generally not understood to mean that they permanently stashed that money in their mattress or checking account, but that they spent less on a particular purchase than they otherwise would have. If they choose to spend that extra amount on Disney souvenirs or eating out at a restaurant or whatever, that is their choice of what to do with the money they saved on lodging. It was still money saved, but you got additional goods and services out of it instead of just a higher bank account balance. I don't think people should be considering DVC if they aren't already expecting to vacation regularly at WDW, by which I mean at least every couple of years over at least the next decade or more. It is a fairly straightforward direct comparison of your alternatives, and again, money "saved" is on lodging, nothing else.*

*Technically, you could save on meals by buying groceries and preparing them yourself. But again, this needs to be balanced in the comparison. You save money, but making your own food in your villa kitchen is not the same thing as being served in a restaurant.

 

[bisney]

But when I look at the #'s it just seems like a bad financial move and I can't allow a fuzzy feeling to lead me into a bad decision.

To be quite honest, when you look at the numbers for virtually ANY vacation, it's a bad financial move but we all do it for the warm fuzzy memories.

At this point, it's safe to say that you have more than enough information to make your decision and this decision is yours and yours alone. Since you've stated that you anticipate going annually to WDW for the next 10 years, I would say that it makes sense to buy given that you can sell your contract through the resale market after 10 years and recover much of your initial buy-in.

And if you do go to WDW for more than your self-assessed payback period of 14 years, you have something of value that you can pass along to your children or you can enjoy staying in deluxe resorts for years to come at a fraction of the rack rate.

 

[Missyrose]

It was started yesterday, so he made an offer since then?

Made an offer and had the contract accepted. From the ROFR thread.

I've got to say, I worry about someone who lets strangers on the Internet talk them into a purchase this large.

 

[disneynutz]

At first glance this does seem very interesting. If you transfer points from another resort like BC....can you book BC at the 11 months window with those transferred points?

There are a lot of things that Disney does well, certain aspects of the DVC isn't one of them. Transfers seem to confuse MS, they don't always post them correctly to your account and they don't show up online. When you want to use them you run the risk of your reservation getting screwed up.

We have had two transfers. The first time we were booking AKV CL and by the time MS figured out how to apply the transfered points, someone else swooped in and took the inventory.

The second transfer mishap occurred when we made a reservation through MS and we saw it online. A few weeks later I tried to add a room request to the reservation and it had been canceled by MS. I escalated to a supervisor who told us that we had canceled the reservation. I contacted member satisfaction who took the time to research and found out that the transfered points were not posted correctly and some type of audit caused MS to cancel the reservation in error. We were re-booked with magical inventory and they gave us a gift basket when we checked in.

We no longer do transfers but I am sure that other have without incident.

Bill

 

[bighoo93]

I've got to say, I worry about someone who lets strangers on the Internet talk them into a purchase this large.

He came here for information and feedback, listened to what people had to say, and then made his decision. Shouldn't that be what the Purchasing DVC board should be all about?

 

[PCMama]

He came here for information and feedback, listened to what people had to say, and then made his decision. Shouldn't that be what the Purchasing DVC board should be all about?

I agree. That's what boards are for. I have like two friends I know IRL that are owners. I want feedback from a larger community so I look here. The op shouldn't be criticized for asking questions.

 

[amomgrine]

First off...thanks to everyone who has replied on a couple threads I've started about me looking into DVC. I really do appreciate all the feedback and comments. I'm 99% sure I'm going to pass buying into DVC. I just don't see it as financially a good decision.

The offer I have in hand is basically $10,500 for a 160 point contract with 160 banked points from 2012. Going back to my original post...I can rent points anytime I want for $12 without buying into DVC. So I need to compare the cost of buying into DVC vs the cost of just renting points whenever I want to go to WDW. I understand there are some ancillary benefits to being a DVC member...but we're flexible in our vacation times so I don't expect much of a problem finding the resort we want by renting points.

Looking at it from strictly financial standpoint...I pay $10,500 and get 320 points in 2013 and 160 every year afterward. Again, let's say for the sake of comparison that I rented those points each year with a average profit of $7 per point (I'm basing this # on the last few years of maintenance fee costs vs what people have been renting point for). So on aveage I'd "profit" $1120 per year. Divide my initial cost of $10,500 by $1120 and it will take me almost 8.5 years for my "profit" to match my upfront cost (remember, I started with 320 points instead of 160).

But this also doesn't take into consideration the interest I'd make on that $10,500 if I invested it instead (which I would). If I instead take that $10,500, invest it and get a moderate 5% rate of return...I'd have $15,600 at the end of 8 years. Now my recoup time extends to almost 14 years. I don't consider taking 14 years to recoup my initial cost as a good use of my money.

The beauty of this exercise is that it's easy to compare renting vs owning. Yes, I could use my points instead of renting them....BUT...the difference between renting and owning is still the same. I'm either "saving" by owning and paying a lower maintenance fees....but my upfront cost is huge....OR....I'm "saving" by renting for a larger amt per point with zero up front cost. Either way...the #'s end up similar.

I'm gonna pass on owning DVC and just rent points. For me, it just makes more sense although I'd LOVE for someone to prove my theory wrong because I would love to be a DVC owner...I just don't think it's financially worth it. Is there something I'm missing...a huge error in my #'s that I don't see? Again....I'M LOOKING AT THIS FROM A $ STANDPOINT. I don't have to be a DVC member to go to WDW anytime I want. To me, the best option seems to invest the money and rent points.

ALTHOUGH...if I bought and recouped my inital cost in 14 years....every year afterward I'd realize a massive savings. The contract ends in on 1/31/2054. So after my 14 year remcoup time is done I'd still have 27 years of heavily reduced resort stays because all I'd have are the maintenance fees. I guess I could allow my daughters to benefit from this (they could take their families to WDW using my points when they grow up). So that is a pretty large benefit in my eyes.

My husband and I were Quoted 20,400 recently for joining the DVD with 120 or 140. Why is there such a $ difference? We were going to get 2012 point also but my quote was $10,000 more with less points. This was at the beginning of April we got our quote.

 

[PCMama]

My husband and I were Quoted 20,400 recently for joining the DVD with 120 or 140. Why is there such a $ difference? We were going to get 2012 point also but my quote was $10,000 more with less points. This was at the beginning of April we got our quote.

Op is buying resale. You were probably quoted the direct price.