why is dvc worth it in the long run?

[johnsbelt]

I think resale makes alot of sense financially, direct not so much.

That's exactly the way I did my thinking. We were going to visit Mickey every other year for about a week (we usually drove from SW Ohio). DW said that if we purchase DVC she was going to be high maint and want BLT since the MK is her favorite park. I found a small (50 pt) contract and purchased it. It was fully loaded (last years points banked, all of this years points, and all of next years points)! I figured that at the interest rates at the time (1.1% at Discover Bank), the money I was spending would be paid back in 5 trips over 9 years. My calculations were based on booking a cash room at a 30% discount since they have been easy to find. We were forced into a quick trip shortly after purchase or the banked points would have expired.

Now fast forward 2 years and if you count the savings from DD and future DSIL (he proposed to her in front of Cinderella's castle) when we had points transferred into my account, the contract will be paid off a trip sooner.

I'm also planning a nice trip next Oct for our 25th anniv. I managed to get additional points transferred to my account and will be staying in a 1 Bedroom, MK view, for a week! DW only knows we are going. She is assuming we are staying in a studio with a lake view.

I just hope DW doesn't get add-on-itus from the 1 Bedroom room .

If anyone is interested in the spreadsheet, I'd be happy to share it. Just PM me with your email address.

John

 

[crisi]

Like everything you need more details. I have run the numbers (as most people on here have) and depending on the discount rate you use (a finance term for calculating cash flows at different time periods, not the discount on rack rates) DVC will break even between 6-12 years IF YOU BUY IT WITH CASH UP FRONT. This appears to be relatively similar to what other people say the break-even is.

Another key - if DVC doesn't change your vacation habits. In some cases its really easy to see that it does. In other cases, you'll never know.

A lot of us are "guilty" of upgrading to a one or two bedroom - its so nice to have the kids in a different room. Its a quality difference in vacation - but its more expensive than staying three or four in a Deluxe room.

A lot of us are "guilty" of bringing family or friends and paying for their room. It brings us joy - but unless you'd bring family and friends on cash, it adds expense. Hey, we have these points to use and we'd love to bring you along.

A few of us are guilty of missing daily housekeeping enough to pay for it. That will eat into your savings.

A lot of us sneak in an extra trip - maybe for the Halloween Party and Food and Wine - or to see the Christmas lights. And if you do the AP every two years thing, it becomes really easy to justify - but then there is the airfare.

Some of us use no room bill at the end of the trip to justify more souvenirs, more dining, tickets to Cirque, etc. Or we use the frequency of our trips as an excuse to add on extras.

A few of us have used the whole "but the room is paid for" excuse to travel in a lean year - that year where the roof needs replacing and then the washer breaks and you have your hours cut at work....where if we had to pay cash, we'd skip a year.

Now, many of these things add VALUE, but "know thyself." IF you main reason for buying DVC is to save money, are you disciplined enough to do so? IF you main reason for buying to to get more value out of your vacations, then DVC is usually a good deal - if all the other caveats work for your family (and understand those) - even if you end up spending more overall.

Remember too that everything goes up in price. When we started going to Disney my family could fly for $400 round trip - we had two lap babies and airfare was cheaper. Our last set of airfare was over $1600. When we started going to Disney, we had two under threes and two adults and tickets for the week were maybe $500. Our last ticket bill was over $1500. We started with kids who would eat off mom's plate - I now have a fourteen year old boy who eats five times a day. Incomes don't tend to increase as quickly as vacation pricing.

 

[AllieV]

Calculations based on my own trip habits showed that I paid the same for a moderate hotel room as I did if I rented points and stayed at the Deluxe 1-br. So renting DVC was a great option for us as we really liked staying at the Boardwalk. When I found a contract cheap enough (the key) then it was worth it to buy.

I could have kept staying at moderates and not bought the contract and been even forever (presumably). The extra room is really nice, though, and saves our sanity.

 

[DougEMG]

I think resale makes alot of sense financially, direct not so much.


Other posters did a great job comparing the financials vs. non dvc disney hotels.... Heres another way to look at in terms of what your points are worth. I always think of the purchase in terms of "how long until i reap the benefit of only paying dues?"

Buy a 200 point resale contract at the boardwalk for $55 per point.
Up front price is 11K (plus $500 closing costs)
You could rent the points fairly easily for $11 per point even if you decided to never take a single vacation.
You will pay roughly $6 per point in dues, netting a $5 per point profit.
You have to rent 2300 points to break even on your principle, or 11.5 years worth of points, thus leaving you with almost 20 years of vacation points for only the dues.

Run the same numbers vs. direct at $130 per point direct
Principle is now 26k
Youd have to rent 5200 points or 26 years worth until you break even.

Am i suggesting you buy resale to make money off renting points? Of course not, but i think it does help to put in perspective what your break even point is.

That's pretty much the same method I use as well.

 

[mditkof]

That's pretty much the same method I use as well.

That is exactly my analysis with one exception.

The DVC points should have a residual value even a couple years from their expiration which is equal to the point rental value minus yearly MF multiplied by the number of years left on the contact, and presuming some discount value for the cost of money and difficulty of liquidation.

At 65 years of age, all of our points will be on MF value only assuming $5 yearly amortization of the initial purchase price. At that point, the points truly become a net asset value.

Marty

 

[crisi]

Another thing to keep in mind - if you've never stayed in a DVC studio, you should rent points and do so - DVC is a timeshare, it isn't like the Deluxe Hotels. Some people think DVC rooms are superior, I'd be quite disappointed if I thought I was getting a Deluxe hotel room and ended up in a DVC studio.

 

[gscott8075]

I was always suspicious of timeshares. My wife and I were going to WDW a lot. We checked out DVC and ran the numbers. It made sense way back when for $55 or $60 per point. Then we had kids and they loved it. Then we stopped by Hilton Head on a whim and fell in love with the Disney Beach Resorts. We added extra points and eventfully sold our OKW points.

Here is what I do know:

1. We have had tons of wonderful adventures and memories from our WDW, VB and especially HHI trips. If we had not done DVC, this would likely not have happened.

2. HHI is our summer place so we opted to not buy a vacation home.

3. The 2 BR accommodations are awesome for a growing family and we have enjoyed the extra room.

4. We religiously take family vacations.

One daughter is in her second year of college and one daughter is in her senior year of high school. HHI DVC is where they want to go every summer. So, I think we'll hold onto them - for at least that week- for many more years.

So, I know that I could not get a 2 BR condo in HHI for what we paid for points / dues, I have not calculated the cost based on today's prices.

All of our DVC trips have been terrific. That's priceless.

 

[ELMC]

I was always suspicious of timeshares. My wife and I were going to WDW a lot. We checked out DVC and ran the numbers. It made sense way back when for $55 or $60 per point.

I completely agree. But here's the rub...it still is $55 or $60 a point. Just not direct.

 

[Wingnut330]

4. We religiously take family vacations.

This was a key decision maker for us. We have a young family and for the first couple years of my son's life we didn't take any vacations. We finally decided to take the kids to Disney when they were 4 and 2 - our first family vacation. The following year when we started talking about vacation, we all wanted to go back to Disney, so we went last year too.

While on property last year we ended up joining DVC. Fast forward to 2013 and we are going twice - a quick trip for a milestone birthday of mine and then a longer trip around the holidays.

Why does any of this matter? Because we weren't a vacationing type of family and now that we have taken a couple I realize how important they are. DVC will force us to plan vacation time - that time we need together.

If we didn't have DVC there is no what we would be heading down there for my birthday. Is it a great financial investment? Maybe, maybe not, but the some of the non-financial aspects are what drove our decision.

 

[ethanash1]

This was a key decision maker for us. We have a young family and for the first couple years of my son's life we didn't take any vacations. We finally decided to take the kids to Disney when they were 4 and 2 - our first family vacation. The following year when we started talking about vacation, we all wanted to go back to Disney, so we went last year too.

While on property last year we ended up joining DVC. Fast forward to 2013 and we are going twice - a quick trip for a milestone birthday of mine and then a longer trip around the holidays.

Why does any of this matter? Because we weren't a vacationing type of family and now that we have taken a couple I realize how important they are. DVC will force us to plan vacation time - that time we need together.

If we didn't have DVC there is no what we would be heading down there for my birthday. Is it a great financial investment? Maybe, maybe not, but the some of the non-financial aspects are what drove our decision.

I agree with you. It's a totally personal decision, and one that I don't regret. We NEED our yearly Family Vacation. No Facebook, no cell phones, no electronics... Just good old fashioned fun and relaxing. Exploring. Learning. Creating memories. It is worth every penny for us.

 

[ELMC]

This was a key decision maker for us. We have a young family and for the first couple years of my son's life we didn't take any vacations. We finally decided to take the kids to Disney when they were 4 and 2 - our first family vacation. The following year when we started talking about vacation, we all wanted to go back to Disney, so we went last year too.

While on property last year we ended up joining DVC. Fast forward to 2013 and we are going twice - a quick trip for a milestone birthday of mine and then a longer trip around the holidays.

Why does any of this matter? Because we weren't a vacationing type of family and now that we have taken a couple I realize how important they are. DVC will force us to plan vacation time - that time we need together.

If we didn't have DVC there is no what we would be heading down there for my birthday. Is it a great financial investment? Maybe, maybe not, but the some of the non-financial aspects are what drove our decision.

I agree with you. It's a totally personal decision, and one that I don't regret. We NEED our yearly Family Vacation. No Facebook, no cell phones, no electronics... Just good old fashioned fun and relaxing. Exploring. Learning. Creating memories. It is worth every penny for us.

I agree with both of these sentiments and I think they are good position statements in the "DVC or not" discussion. That being said, once you decide that DVC is a good idea for your lifestyle and family vacationing habits, you then would benefit from engaging in another discussion: direct or resale. It is there that you will examine the costs of DVC and what benefits you get from both purchase options. Families who are buying DVC as a "forced vacation" tool or as a luxury to be able to take unplanned trips might find that they can receive those benefits from a resale purchase for much less money.

 

[magicmonette]

Does dvc save you money in the long run if you are a family that goes once a year and only stays deluxe, has only one child and has to fly to get to Disney? Why did you choose dvc over RCI or other timeshares?
We realized we spend on average 3800 for a week and that includes base tickets and free dining at deluxe for a week while we will be paying $260 a month and almost $900 in fees that's about 4200 a year. Is there something I'm missing? Also, after the 10 years are up and we only have to pay fees, whos to say the prices on fees won't double? Then having to pay $400 a ticket for 3 people annually plus food. I can't see how this would save us money. Any help with making the decision? Unfortunately we purchased it yesterday and obviously didn't think it through too well. We have 10 days to cancel but not sure if we will lose out on our down payment either. Please no rude comments but friendly advice will be much appreciated!

Mousesavers has EXHAUSTIVE research on this subject...like almost OCD! LOL! Spreadsheets, etc. here's a link to get you going:

http://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity

 

[djwood24]

we were going to Disney every other year...so we looked into the Direct Buy...well didn`t pull the trigger.
Looked into resales...well bought BCV 150 points few years back...paid 12k cash
Have been to Disneyworld once so far using it...been to HH another time.
Just used RCI for Mexico.
So all in all I am using it...happy with my purchase.

But Am I the ONLY one who didn`t didn`t use a calculator/spreadsheet to just buy it?

 

[ToddyLu]

we were going to Disney every other year...so we looked into the Direct Buy...well didn`t pull the trigger.
Looked into resales...well bought BCV 150 points few years back...paid 12k cash
Have been to Disneyworld once so far using it...been to HH another time.
Just used RCI for Mexico.
So all in all I am using it...happy with my purchase.

But Am I the ONLY one who didn`t didn`t use a calculator/spreadsheet to just buy it?

No you are not alone, DH and I have great jobs where we do not have to be proficient in Excel or math. We bought sight unseen at AKV....we bought direct...we financed for 10 years...we take family... we broke all the rules and enjoy every second and penny of it. The DIS DVC Forum gods will now strike me dead.

 

[magicmonette]

No you are not alone, DH and I have great jobs where we do not have to be proficient in Excel or math. We bought sight unseen at AKV....we bought direct...we financed for 10 years...we take family... we broke all the rules and enjoy every second and penny of it. The DIS DVC Forum gods will now strike me dead.

No, they will strike you down when you have done that again with multiple use years! LOL! Just joking!!! Hold the lightening!

 

[Caren90]

No you are not alone, DH and I have great jobs where we do not have to be proficient in Excel or math. We bought sight unseen at AKV....we bought direct...we financed for 10 years...we take family... we broke all the rules and enjoy every second and penny of it. The DIS DVC Forum gods will now strike me dead.

It is your purchase and your happiness. That is what matters most!!

Stephen

 

[ELMC]

No you are not alone, DH and I have great jobs where we do not have to be proficient in Excel or math. We bought sight unseen at AKV....we bought direct...we financed for 10 years...we take family... we broke all the rules and enjoy every second and penny of it. The DIS DVC Forum gods will now strike me dead.

In a conversation that focuses on cost and money as it pertains to DVC, your choices are probably not the most efficient way to go. However, despite the fact that most of the conversations on here revolve around the cost of DVC, there are other aspects to ownership. In those areas you seem to be ahead of the pack.

 

[bakerworld]

But a studio doesn't really compare with a deluxe hotel room. The hotel room is better because it has real beds and sleeps five.

I'd never pay cash to stay in a studio. Are you staying three consecutive weeks in a studio?? Or are you booking three trips? I can't imagine three weeks in a studio.

We enjoy the studios as we've no need for more than 1 bed (and I am pretty sure it's a real bed). The kitchenette is nice for AM coffee or an afternoon snack. We don't spend much time in the room altho what time we do having the sofa provides nice walking space to the patio/balcony.

We do week long stays 3 times thru out the year during which time I don't cook, wash clothes or dishes. We hang the DND sign on the door and enjoy. Anything we need, we pick up the phone and magic happens =

 

[bakerworld]

What do you mean by "financing" -- are you buying over time and that includes your interest cost? Or is that simply the amortized amount applicable to a given year on what you originally paid?

Disney won't always be on 35% off sale at the resorts. So two ways to look at that -- cash pay until those hefty discounts dry up and then buy DVC if you find that you are still interested in going regularly, or go ahead and buy today, using the dollars you would have spent on those 35% off cash pay rooms towards your purchase.

My husband refused to buy outright - prefers to pay over time and keep his $$ in his pocket . Whatever - we're .

So far the AP discounts have been running fairly consistently but last October we stayed at the Dolphin and LOVED IT. (The only place we could've stayed on pts 4 months out was SSR - which wasn't our preferred location for F&W.)

 

[Dean]

No you are not alone, DH and I have great jobs where we do not have to be proficient in Excel or math. We bought sight unseen at AKV....we bought direct...we financed for 10 years...we take family... we broke all the rules and enjoy every second and penny of it. The DIS DVC Forum gods will now strike me dead.

I have no problems, I think there are many in the situation you are/were in. Fortunately it's worked out well for you though it hasn't for some. There are far worse choices in life than making the wrong one with DVC. However, for someone looking to buy in, I'd suggest they limit risk and cost even more than you were able to do.