To finance or not to finance

[northshoremama]

just curious how any folks out there who have purchased a DVC membership financed their purchase? i read somewhere that if you have to finance it, then it really isn't that great of purchase since you have to pay interest...

not sure about you, but i don't have 20% down for 200 points (about $34k). i could possibly save it and purchase my membership by the end of the summer, BUT i'd still have to finance the rest.

so...just wanted to get your thoughts on this. to finance or not to finance?

 

[Brancaneve]

We purchased an "add on" contract of 110 points and charged it to our Disney Visa, which gave us 6 months at 0% interest to pay it off. Of course, we had to call and increase our loan amount and let them know a big charge was on its way. We were able to pay it off within the 6 months. That could buy you a little bit of time?

Of course, many will tell you it's never good to finance ANYTHING! The vacation will be so much better knowing that it's all paid.

 

[msjprincess]

Personally I wouldn't finance. If something happens down the road I don't want to have to worry about a vacation payment. I thought about DVC for almost 20 years before I finally bought. I waited until I could pay cash, I bought a resale and started out with only 120 points, figuring I can add on later if I want.

 

[KAT4DISNEY]

just curious how any folks out there who have purchased a DVC membership financed their purchase? i read somewhere that if you have to finance it, then it really isn't that great of purchase since you have to pay interest...

not sure about you, but i don't have 20% down for 200 points (about $34k). i could possibly save it and purchase my membership by the end of the summer, BUT i'd still have to finance the rest.

so...just wanted to get your thoughts on this. to finance or not to finance?

I personally did not and would not have financed to buy DVC. It's prepayment on future vacations and I consider that a discretionary item.

Just checking that you also are aware of resale? It could be a goal that can be met sooner if DVC truly makes sense for your situation. And there also so other many great ways to visit Disney that can be saved for with no large up front payment. Onsite at at values, moderates or even deluxe, renting points or staying offsite. I did those for years and actually have no regrets that we didn't buy in to DVC when we first were introduced to it. When we could afford it and felt it made sense then we did.

 

[gharter]

Unless you can get a very low interest rate or 0% rate, I would not finance. Many of your finance options make it becomeextremely expensive. As others have stated, we considered this a discretionary purchase rather than a neccesity. From your post, it appears you are looking at buying direct. I would seriously consider resale, if you have not already. For the number of points you are thinking of purchasing, the upfront savings is thousands of dollars. We paid about 60% of what direct from Disney would have cost for he same points (if they were available).

 

[sndral]

I wanted to buy DVC and I didn't want to finance and I didn't want to wait too long to buy. My strategy was to buy resale and buy 1/2 the number of points I wanted as that's what I felt comfortable spending @ the time. By using banking and borrowing to vacation on those points a couple of years I've saved some more cash to buy the second half of the points. Not paying for deluxe rooms for my annual WDW trips sped up the saving part for contract #2. Meanwhile I found that I like the DVC system and love the 1 br. villas, so I'll be buying another resale contract w/ cash when the time comes.

 

[Dean]

just curious how any folks out there who have purchased a DVC membership financed their purchase? i read somewhere that if you have to finance it, then it really isn't that great of purchase since you have to pay interest...

not sure about you, but i don't have 20% down for 200 points (about $34k). i could possibly save it and purchase my membership by the end of the summer, BUT i'd still have to finance the rest.

so...just wanted to get your thoughts on this. to finance or not to finance?

I don't recommend financing luxury items. By definition, if one can't pay for it, they can't afford it. Some could but chose to finance anyway, they're choice but not a good one, IMO. Financing adds risk to ones situation. I believe if it's important and one could afford it, they can pay cash but they might have to skip a trip or make sacrifices in other areas to do so.

 

[msjprincess]

You could buy 200 points at SSR or AKV through resale for $16-$18K.

 

[kristenrice]

This was my rationale for financing our 50-pt add-on...

For several years, I had $25 out of each paycheck directly deposited into an online account to cover the cost of our DD's pre-school tuition. Once the youngest hit kindergarten, we no longer needed that account. As it turned out, HHI was being sold (direct) for $80/point and I had been waiting for a 50-75 point contract with a Feb UY to come available via resale. I called up our guide and asked about the availability and cost. Our monthly payment for 50 points is $49.08 so I simply continue to make the $25 direct deposit and allow DVD to directly debit our monthly payment. I know that I will be paying a lot in interest, but looking back, I feel it was the right decision. Resale prices have gone up and anything under 100 points is almost non-existent. On top of that, direct prices are now $115 so if I would have saved and waited until I could pay cash, I still may have ended up paying the same amount in the long run.

People will say that financing a timeshare is a bad financial move. They aren't wrong, but the bottom line is that it is your money and you are free to use it however you want.

 

[DisDadDVC]

Not to.

 

[kniquy]

Ask yourself if you would take out a loan to take a vacation. That is essentially what you are doing. I know many people do finance timeshares, but it is really a luxury item and you should purchase when you have the funds. Just as if you don't have the funds you don't take a vacation. We had a sum of money that we used to purchase a small 120 pt contract that we could afford at the time. We plan on going every other year. We would like to add on but will only do so when we have the cash. Someone else mentioned that they used their chase visa for 6 months free interest and paid it off. That is one way to earn some cash back on the purchase, but it has to be paid off in that time frame. That should only be used by those who are disciplined enough to make the payments.

 

[jodifla]

I financed way back in 1996. I'm glad I did. I was able to buy it 20 years ago, paid it off in less than 5 years. We do finance luxury items, typically one at a time, because we try to never dip into our savings. So, now we have a lot of savings going into retirement.

I have read over and over again how people looked decades ago, didn't buy, and now it's SO much more expensive. Oh, and they've been dumping money into Disney hotel stays all these years in the meantime.

 

[disneynutz]

The only reason to buy DVC is to save money for people who vacation at Disney at least every 2 years and who stay at deluxe resorts.

To compare if DVC is a cost savings you need to compare the DVC rented rate to your purchase cost, dues cost, and loan cost, minus what you might net if you sell later.

Bill

 

[jerseyduke]

I am going to go against the grain here as one who is not TOTALLY opposed to financing.

I have financed, but 3 caveats are 1. I financed small amounts. 2. I did so at low interest rates. 3. Not financing would have required me to liquidate some security which would have resulted in tax implications I did not want- it was better for me to pay some (rather small amount of)interest

I get what people are saying it is a luxury item. Yet people finance new cars regularly. And those seem to depreciate faster.

But, I would not recommend financing the amount you are talking about. That is a pretty major financial burden for what it a luxury item. Financing mathematics and debate aside, it is one thing to take on a 100$ payment a month for 2 years. Its a whole other animal to take on a 300$ for for 5-10 years.


I would either do the following:

1. Buy resale. Unless you want the Polynesian without question, you can pick up a lot on the resale market, and a much lower price. You can always sell that down the road and buy a Polynesian resale.

2. If you must have the Polynesian, buy 50-75 points. Enough to get you one week every other year. Save and add on. It life permits, buy another 50 next year.
Added benefit----When buying direct, it can be advantageous to buy smaller contracts. This enables you to downsize in the future. If you buy 1 200 point contract, and you want to sell, you MUST sell all 200 points. If you have 4 50 point contracts, you can sell only 1. Also smaller contracts are more valuable on the resale market.

Also realize, 200 points at the poly = 100$ per month in maintenance fees on top of your monthly payment for your financing. It will add up!

 

[northshoremama]

THANK YOU, everyone for your input. i do need to look into renting points or resale. i'm also looking at aulani as my 'home' resort.

what is a good website for resales? i saw that there is a forum here for renting/trading points as well.

my questions about resale though...what benefits do i lose if i buy resale? can i still take advantage of adventures by disney or the disney cruise line?

 

[crazyventures]

THANK YOU, everyone for your input. i do need to look into renting points or resale. i'm also looking at aulani as my 'home' resort.

what is a good website for resales? i saw that there is a forum here for renting/trading points as well.

my questions about resale though...what benefits do i lose if i buy resale? can i still take advantage of adventures by disney or the disney cruise line?

I'd recommend the sponsor of this board, TTS. We had a great experience with them. They were responsive, timely, kept us updated through every step of the process, and even sent reminder emails to both sides. We closed before the contract's date and now we're just waiting for our membership number!

Best of all, we paid much less for a loaded 100 point contract at BLT than we would've paid for the same amount of points at Poly. The benefits of buying direct (using points for cruises, Adventures by Disney, non-DVC Disney hotels, etc) just weren't worth the $168/point for us.

 

[DisDadDVC]

I'd recommend the sponsor of this board, TTS. We had a great experience with them. They were responsive, timely, kept us updated through every step of the process, and even sent reminder emails to both sides. We closed before the contract's date and now we're just waiting for our membership number!

Best of all, we paid much less for a loaded 100 point contract at BLT than we would've paid for the same amount of points at Poly. The benefits of buying direct (using points for cruises, Adventures by Disney, non-DVC Disney hotels, etc) just weren't worth the $168/point for us.

They are NEGATIVE benefits IMO.

 

[SteveBlues]

I second tts. They were great and always post the full out of pocket cost. I would not finance, unless you can get a good rate. I have heard of people using a home equity loan to borrow cash at a low rate and then purchase DVC with the cash. The rates available for DVC direct or resale finance options are just too high and will remove most of the value of using dvc.

 

[Dean]

...what benefits do i lose if i buy resale? can i still take advantage of adventures by disney or the disney cruise line?

None of value.

 

[suebeelin]

You don't really lose any benefits. Renting out your points and paying cash for the cruises or adventures or concierge is a better deal for your pocketbook.

Most ppl that I know who have bought direct have never used the their points for non dvc options. They actually need more points than they have, so they don't rent out either.

I aldo concur with the general consensus about financing... It's ill advised. Renting or buying a smaller resale contract is a better option.

Curious-- why aulani over BLT?