100 pt Direct Blue Card Minimum September 17,2019

[sethschroeder]

I don't see how this does anything but drive people to resale and eliminate those on the fence because of price that think they will be able to rent those tower studios with ease.

Do they really think they can get than many 75 point buyers to go up 33% in purchase price? Just weird but they have some reason likely in data.

 

[TexasChick123]

I don't see how this does anything but drive people to resale and eliminate those on the fence because of price that think they will be able to rent those tower studios with ease.

Do they really think they can get than many 75 point buyers to go up 33% in purchase price? Just weird but they have some reason likely in data.

It’ll drive short-term sales with people who are on the fence. They’ll rush to add on 75 points before the deadline. It’s literally worked every time so far. The direct sales spike when then do things like this.

 

[sethschroeder]

It’ll drive short-term sales with people who are on the fence. They’ll rush to add on 75 points before the deadline. It’s literally worked every time so far. The direct sales spike when then do things like this.

Except what I have read seems to talk about how in the past there was a longer run way. They basically won't be able to drive much from what 6 bank days?

Just weird. You stating it that way makes me think someone feels they are about to be let go in the DVC chain of command.

 

[pkrieger2287]

If someone gets a guide to put this in writing please let me know. At this point, I feel like I have to believe it if Gib McCain said it. I just emailed him myself for further confirmation.

 

[Jack_Sparrow_NJ]

If someone gets a guide to put this in writing please let me know. At this point, I feel like I have to believe it if Gib McCain said it. I just emailed him myself for further confirmation.

I believe my guide. She has never given me incorrect Intel.

 

[T-i-double-guh-er]

I’m on the phone with my guide now. He said he has not heard anything about an increase in the minimum points required for the blue card. Doesn’t necessarily mean it’s not true though.

Update: I talked to my guide again late this afternoon. He told me about the meeting they had after we first spoke and that the change to 100 points required for blue card was confirmed effective 9/17. We were looking to add on some points within the next few weeks to book a 2br for a big family trip next year, so we went ahead and put a deposit on 75 points.

 

[skier_pete]

You know the other thing about the timing of this? It's the end of Disney's fiscal year. If their sales are lower than budget they might be looking for this to produce a quick uptick in purchases to finish out their year.

This occurred to me very early on. They know that when they jumped from 25 to 75 points they saw a big sales bump for the month. The timing of this is such that they want to see another sales bump before the end of the fiscal year. This is yet another indication that DRR (Riviera) is underperforming. I wonder if this will work as well as the 25 to 75 did. I'm sure some people will jump on it though. I don't see how this benefits Disney in long term - as others have said, the more they raise it, the fewer people will bother with the blue card purchase - they'll actually sell less in the long run.

 

[Yinn]

This occurred to me very early on. They know that when they jumped from 25 to 75 points they saw a big sales bump for the month. The timing of this is such that they want to see another sales bump before the end of the fiscal year. This is yet another indication that DRR (Riviera) is underperforming. I wonder if this will work as well as the 25 to 75 did. I'm sure some people will jump on it though. I don't see how this benefits Disney in long term - as others have said, the more they raise it, the fewer people will bother with the blue card purchase - they'll actually sell less in the long run.

That’s a big cost difference though. 25 points was what? Less than $5000 for everyone on the sidelines to jump in - which included resale only buyers and $175 in annual dues about. 75 points is $14,000 and $525 of annual dues (est)

That’s a heavy chunk of change difference. The only way I see this working is if they monopolize the resale market. Another words, if they ROFR as much as possible, then you won’t have a choice but to buy direct. Which if these posts are correct, might be what they’re trying to do. I’ve read in here 2019 has been really heavy on buybacks.

 

[kboo]

Disney makes tons more from financing a direct purchase than the cost of the points themselves. Even if you drive some savvy 100-point buyers to resale, I wonder how many new buyers (not on the DIS) will end up financing 100 points when they’re told that’s the minimum buy in? How much does that work out to?

(This is also the same reason why I think they will not ever offer an extension on BWV or BCV)

 

[Yinn]

Disney makes tons more from financing a direct purchase than the cost of the points themselves. Even if you drive some savvy 100-point buyers to resale, I wonder how many new buyers (not on the DIS) will end up financing 100 points when they’re told that’s the minimum buy in? How much does that work out to?

(This is also the same reason why I think they will not ever offer an extension on BWV or BCV)

At a 10% interest rate I was told. TEN! That's an additional $18.80/point for the first year. Sure it goes down, but it'll be years before it gets to the level of even the highest annual dues. Heck, it only costs $18/point to rent a DVC. On second thought, maybe I should gobble out more contracts to rent out...

 

[TheMick424]

We purchased our resale contract right around the time of the jump from 25 to 75 for perks. At the time it was announced, we weren’t far enough into the process to jump on a 25 point direct purchase, so we waited and bought 75 direct this past year. My DH was on the fence about it, but definitely enjoyed the perks during our last trip, and it helped to bump our total points up to an amount that gives us more flexibility. Seeing this news, I’m glad we got in for the hybrid approach when we did. Adding on 100 points direct would have been a tough sell for DH.

 

[TexasChick123]

Disney makes tons more from financing a direct purchase than the cost of the points themselves. Even if you drive some savvy 100-point buyers to resale, I wonder how many new buyers (not on the DIS) will end up financing 100 points when they’re told that’s the minimum buy in? How much does that work out to?

(This is also the same reason why I think they will not ever offer an extension on BWV or BCV)

This is such a great point that is often overlooked. There is some serious money to be made in the finance charges when people don’t pay cash. I mean credit cards, mortgages, cars, etc. are all purchased on credit by the majority. None of those companies are hurting for profits! I cannot even fathom how many billions of dollars are made on finance charges/interest alone.

 

[kboo]

At a 10% interest rate I was told. TEN! That's an additional $18.80/point for the first year. Sure it goes down, but it'll be years before it gets to the level of even the highest annual dues. Heck, it only costs $18/point to rent a DVC. On second thought, maybe I should gobble out more contracts to rent out...

I stink at figuring out compound interest - but even if someone pays it off early, how much is it say over 5 years? $1880 in the first year (for 100 points), that's about $9,000 in the first 5 years. so, almost half the original purchase price on the contract.

 

[Doublea]

We bought resale first because 150 points at Poly we would have paid $13,500 more direct and it just wasn't worth it. With this change I guess it just means that we may wait a little longer to go direct and/or wait for reflections to see what kind of specials they may have at that point.

 

[skippytx]

At a 10% interest rate I was told. TEN! That's an additional $18.80/point for the first year. Sure it goes down, but it'll be years before it gets to the level of even the highest annual dues. Heck, it only costs $18/point to rent a DVC. On second thought, maybe I should gobble out more contracts to rent out...

10% was the lowest interest rate when I was looking at buying direct 3 years ago. It was 10 to 15% I think depending on how much you put down (10 or 20%) and your credit score. 10% down with even great credit was 12% APR. You needed 20% down to get the 10% rate. An old chart I found on google shows APR up to 17.5% for 10% down and "standard' credit.

 

[anomamatt]

I stink at figuring out compound interest - but even if someone pays it off early, how much is it say over 5 years? $1880 in the first year (for 100 points), that's about $9,000 in the first 5 years. so, almost half the original purchase price on the contract.

Over the lifetime of a 10 year loan $ 10%, the interest on a $19K loan is ~$11K. Of course, it's amortized such that you front in a significant chunk of the interest. So, yes, you are VERY close to $9K in the first 5 years. And the last 5 years, the interest is roughly $2K.

Like with many auto loans, it actually makes sense to either pay it off VERY early (like in the first 2-3 years of a 10 year loan) -or- let it ride. By year 6-7, you have already front-loaded so much interest, the rate is low to the point where it makes sense to NOT pay it off and continue monthly payments.

 

[pkrieger2287]

Thanks everyone for the great reporting! We've received multiple confirmations of this change from various guides and members. Seems like the news broke here on DISboards first.

DVC Fan: Direct Minimum for DVC Perks Rumored to Increase to 100 Points

 

[Yinn]

10% was the lowest interest rate when I was looking at buying direct 3 years ago. It was 10 to 15% I think depending on how much you put down (10 or 20%) and your credit score. 10% down with even great credit was 12% APR. You needed 20% down to get the 10% rate. An old chart I found on google shows APR up to 17.5% for 10% down and "standard' credit.

Quite a scheme if you think about it. Worst case, foreclose and you get the points back to sell.

I stink at figuring out compound interest - but even if someone pays it off early, how much is it say over 5 years? $1880 in the first year (for 100 points), that's about $9,000 in the first 5 years. so, almost half the original purchase price on the contract.

Nearly $5200 in interest if paid off in 5 years. $8,000 for 15% interest. At those rates, if you’re financing through Disney at those rates you really shouldn’t buy.

 

[skier_pete]

That’s a big cost difference though. 25 points was what? Less than $5000 for everyone on the sidelines to jump in - which included resale only buyers and $175 in annual dues about. 75 points is $14,000 and $525 of annual dues (est)

That’s a heavy chunk of change difference. The only way I see this working is if they monopolize the resale market. Another words, if they ROFR as much as possible, then you won’t have a choice but to buy direct. Which if these posts are correct, might be what they’re trying to do. I’ve read in here 2019 has been really heavy on buybacks.

I don't believe this at all - that Disney is going to start buying back everything. If that were to happen, the prices will go up even further on resale - sure that would reduce resale, but now Disney would have all this excess inventory of old resorts that they would have to sell. Disney uses ROFR to keep the prices above some expected level, but they are NOT in the business of reselling old resorts.

 

[pkrieger2287]

This occurred to me very early on. They know that when they jumped from 25 to 75 points they saw a big sales bump for the month. The timing of this is such that they want to see another sales bump before the end of the fiscal year. This is yet another indication that DRR (Riviera) is underperforming. I wonder if this will work as well as the 25 to 75 did. I'm sure some people will jump on it though. I don't see how this benefits Disney in long term - as others have said, the more they raise it, the fewer people will bother with the blue card purchase - they'll actually sell less in the long run.

Glad to see great minds think alike... I also was wondering about this announcement from a fiscal year perspective. If they are really hurting I assume it was worth taking this risk to see if more would buy direct or resale.