Who actually financed their DVC purchase?

[DeeCee735]

We own 5 contracts (initial purchase and 4 add-on's), we paid cash up front for the first three, went with financing on the last two very small add ons -total of 50 between the two. Closed last month, first payment is due August 15th, I've already paid 3/4 in full, plan to do the same with the last 1/4 before Aug 15th. I don't want the finance charges, but financing the purchase gave us some time to put together the cash and get it paid before finance charges start, so thats what we did. I'm really happy that we took this last add on - and it most likely will be our last. We have what we can handle in maintenance fees and don't want to add any more. Plus the amount of points we now own serves our needs, and then some.

Good luck with your decision.

 

[drakethib]

We did both.

Paid cash for 250 points and one of our adders of 50 points we financed.

We could pay it off tonight without issue if we wanted to.

Different strokes for different folks

 

[DVC Eric]

We financed through disney claim interest for taxes and no regrets.

 

[mule714]

We financed through disney claim interest for taxes and no regrets.

same here... finance, write-off, no regrets

 

[Nikisha421]

finance, write off, who care, just another bill. I GUESS. MY DAUGHTER LOVES DISNEY, I LOVE DISNEY AND I GUESS WE WILL DO ANYTHING FOR THE LOVE OF THE MOUSE. HAHA

 

[rcchello]

I think this response was sound advice and well thought out and wish I had made it. Not that I think most people will listen to the advice :-(

Uncommon? Certainly not. Plenty of people do it every day.

Unwise? This may not be a popular opinion, but I would say usually yes.

It costs more--sometimes LOT more--to finance. But the more important thing is that, chances are, if you don't have the cash to buy your DVC membership upfront, there's probably something better you could be doing with your money.

Do you have other debts ....

Good luck with whatever you decide!

 

[twinklebug]

Whether choosing to finance DVC or pay cash is a sound financial decision depends on your personal financial behavior.

Some folk feel financing at a low apr (if you can get one) is good as opposed to pulling their cash out of other investments (taking into account average return rates/penalties etc). Remember to look into all your financing options including borrowing from your own 401K.

Other folk just don't know or trust what's coming down the pike financially and don't want to get stuck with payments - for them cash is their best friend.

Obviously, if one has debts, then paying those off first is probably their best first move before adding to them if financing... unless the investment 'thing' I mentioned above comes into play regarding those debts.

I've played with the numbers back and forth for a long time now & financing makes a certain degree of sense for me when I find myself 'thowing away' money by booking the resort rooms... but then again, I have stumbled across 40% off deals and many times I've found myself booking the same room for close to the same it would cost an owner in fees & interest (assuming they had financed) alone... and I can book into the weekend without worries of paying for those extra points. No guarantee I'll come across these deals down the road though. I'm saving up to buy in paying cash. My reason... I just want the purchase done & out of the way with only the fees to pay going forward. I'm one who worries about what's to come.

 

[ctydisneyfan]

Hello,
Just wanted to add something. You noted earlier that you currently have a cash reservation... If you financed with disney, closing is very fast, but once the paperwork is printed your guide can make a request for the your current reservation and get you a resi with your points. Then, you can use that money you currently have in the cash resi for the downpayment. Ecentionally, you are prior to the 45 day cancellation on the cash resi so you would get the full refund. Therefore this money can be used for an additional down payment instead. Remember, buying points on a financed contract is far better than paying cash resi, unless you are already using a discounted resi with either renting or annual pass discount. If your intention is to go every year than points purchase if far better the alternative is renting from a DVC member. Cash resi's are the most expensive way to travel to disney.

Every person has their oppinion and whats best for you may not necessarily be best for the next. Just remember, all financed contracts with DVC can always be paid off early, secondly, as mentioned, the use the the Disney Visa to pay off your contract is a double benefit! You get the reduced financing and the point accumulation for disney rewards!

In the end, we financed at 10.5 for 10 years and we have already paid over half off. Paying more is always and option and now with the advanced online site, making a payment is so simple...in the end it like paying off a car but with many more years of enjoyment and family fun!

Good Luck!

 

[supersuperwendy]

Hello,
Just wanted to add something. You noted earlier that you currently have a cash reservation... If you financed with disney, closing is very fast, but once the paperwork is printed your guide can make a request for the your current reservation and get you a resi with your points. Then, you can use that money you currently have in the cash resi for the downpayment. Ecentionally, you are prior to the 45 day cancellation on the cash resi so you would get the full refund. Therefore this money can be used for an additional down payment instead. Remember, buying points on a financed contract is far better than paying cash resi, unless you are already using a discounted resi with either renting or annual pass discount. If your intention is to go every year than points purchase if far better the alternative is renting from a DVC member. Cash resi's are the most expensive way to travel to disney.

Every person has their oppinion and whats best for you may not necessarily be best for the next. Just remember, all financed contracts with DVC can always be paid off early, secondly, as mentioned, the use the the Disney Visa to pay off your contract is a double benefit! You get the reduced financing and the point accumulation for disney rewards!

In the end, we financed at 10.5 for 10 years and we have already paid over half off. Paying more is always and option and now with the advanced online site, making a payment is so simple...in the end it like paying off a car but with many more years of enjoyment and family fun!

Good Luck!

Thanks for your insight! We haven't actually booked the ressie since 2009 packages haven't been released yet. What we have decided to do is open a savings account...and when we have extra $$$ that I would normally apply to the trip I will just deposit it real quick before I spend it! Then when it's up to a decent amount I will do the Disney financing and put that money down! I'm thinking by this time next year or possibly a little sooner we will be ready for our DVC purchase! We already have a trip coming in 76 days, so I will have my WDW fix soon and then can hold off for a bit! I want to make sure we take our time with this purchase and not rush into it!

 

[jodifla]

I can completely understand the reasons against financing, but I think there are at least a couple of factors that make financing a little more palatable:

1. Consider vacation habits and long-term benefits. While someone may not have $20,000 in disposable income sitting around for a timeshare, they may easily be able to come up with $3000 annually for a Disney vacation.

In that situation, I think it's a little silly to continue paying $3K per year for cash trips when DVC can be used as a means of making the accommodations (and APs) more economical in the long run.

2. The resale values of DVC are so good that it's a pretty low risk proposition. No, I wouldn't recommend it to someone whose company is in the process of downsizing but even those who have to sell should be able to recoup their investment after 3-4 years of ownership.

Financing over 10 years with the intent of trying to scrape together money for park tickets, food, etc. is not a great plan. But if one's budget is still healthy with the added DVC payments, and there is a desire to pay things off as early as possible, financing can still be justified IMO.

We financed, way back in 1996. Paid it off in less than five years....and the payments were fairly low, as I recall.

It was all about cash flow for us. We had savings, but didn't want to use it for this purchase. We were already traveling frequently to WDW, so we used that money we were ALREADY SPENDING toward our payments.

The other thing is, we paid WAY LESS for our points then we'd pay for them today. Like 40 percent less. So if we'd kept waiting til we had a big wad of cash to pay for them, we'd be paying a lot more!

 

[supersuperwendy]

Whether choosing to finance DVC or pay cash is a sound financial decision depends on your personal financial behavior.

Some folk feel financing at a low apr (if you can get one) is good as opposed to pulling their cash out of other investments (taking into account average return rates/penalties etc). Remember to look into all your financing options including borrowing from your own 401K.

Other folk just don't know or trust what's coming down the pike financially and don't want to get stuck with payments - for them cash is their best friend.

Obviously, if one has debts, then paying those off first is probably their best first move before adding to them if financing... unless the investment 'thing' I mentioned above comes into play regarding those debts.

I've played with the numbers back and forth for a long time now & financing makes a certain degree of sense for me when I find myself 'thowing away' money by booking the resort rooms... but then again, I have stumbled across 40% off deals and many times I've found myself booking the same room for close to the same it would cost an owner in fees & interest (assuming they had financed) alone... and I can book into the weekend without worries of paying for those extra points. No guarantee I'll come across these deals down the road though. I'm saving up to buy in paying cash. My reason... I just want the purchase done & out of the way with only the fees to pay going forward. I'm one who worries about what's to come.

I plan to use the same money I would be using for regular packages! When I think about what we've paid on the last trip plus the one coming in October it adds up to $6000 plus add what we were gonna spend next june the total jumps to $14000!!!! If we are ok with blowing that kind of money on Disney anyway we should be totally ok putting it towards the DVC instead! I really can't wait! The standard down payment is 10% correct? I think we do at least 30 - 40% down within the next few months! We pay cash for everything so we need to save it up!

 

[gkrykewy]

We would not have bought if we couldn't pay cash - it just changes the break-evens too much, to the degree that you may never break-even (particularly with Disney's 10+% rates).

 

[acejka]

We financed ours, but many say we are stupid with our money...

To me its just money I would have piddled away anyway. Now that I actually think about making the payment each month, I am much better at saving and not going to Coach for a new purse just because I got a 25% off coupon or throwing out the food I brought to work because eating out sounds better. Now I am planning my purchases out instead of just blowing money whenever I felt like it. I am getting a ton into savings this way!

 

[Goofy DVC]

We paid cash in 93. One thing we did that helped alot but was very hard to do, was bank most of our first year points. Because we used a lot of cash to purchase, this gave us a whole year to save $$$$ that we would have used for reservations, food, tickets, flights, etc. We were able to rebuild some of our cash reserves and were in great shape for future trips. I do admit that it wasn't easy as we were dying to go right down and use our points.

 

[javamom]

We financed only a portion of the full amount.

 

[kim_d]

We bought in 2002 and financed through Disney. We were relatively young married couple (with no kids at the time) and the monthly payment was completely do-able. We have one more year of payments.

I just did the math and right now the BCV are going for around $94/point. If we sold all our points tomorrow (which we wouldn't) we would cover all payments (all 7 years, principle and interest) and we got 7 years of vacations...not a bad deal.

We plan to buy more points in the next few years but haven't decided how we want to pay for them yet.

 

[Grandbuddy]

If you are using the money you have used, will use, on "packages," your packages likely included your tickets, and sometimes your meals. Your purchase of DVC will cover only your accommodations. I obviously thought it worthwhile, or I would not have bought.

 

[DVC Eric]

We would not have bought if we couldn't pay cash - it just changes the break-evens too much, to the degree that you may never break-even (particularly with Disney's 10+% rates).

This is untrue our break even our break even is at about 6 1/2 years.

 

[Wedgeh]

DW and I took out a loan here in the UK at 6.9% (before the credit crunch hit thankfully) and we will have paid it off in a year and a half. Any extra costs in interest were easily saved by us being able to cancel a AKL reservation for September and rebook it on points.

Tom

 

[JonS99]

We would not have bought if we couldn't pay cash - it just changes the break-evens too much, to the degree that you may never break-even (particularly with Disney's 10+% rates).

If I buy 160 points right now at $96/point and finance 90% ($13824) with a LOC at 7%, pay if off in 5 years and pay about $2500 in finance charges, my total cost is about $109/point once I figure in the tax deduction. And that does not take in account the developer points, which I can either get an additional trip or rent them out.

Or I could wait and save up the cash over the next 3 years, at which time its likely the points will cost somewhere in the $110 range.