$178,364.60

[unclescrooge_0707]

Instead of reading DIS during lunch, I used excel to figure out how much DVC would cost me. I used the following estimates
300 pts at $112/point, no interest on the $33,600, and a 2.5% increase on maintenence fees per year, starting at $4.12 for year 1.

Anyway, thanks to excel, I found my total-total after 50 years: I'm giving Disney $178,364.60. This breaks down to $297.27 per month.

I will still take the tour in December, but from a standpoint of i don't know what I'm going to be doing in 10 years, much less 30 or 40, I'm thinking DVC may NOT be right for me.

I also compared the Rack Rate to DVC (with the same 2.5 % annual increase.) The savings of a vacation every year is over $130,000. But if I didn't have DVC, I wouldn't go to WDW every year, so it isn't a fair comparison.
Just wondering if anyone else looked at DVC from a numbers standpoint like this.

 

[dbs1228]

Yes we looked at this type of comparison about 5 - 6 years ago and decided dvc was not for us. Well we did buy in this year and realized we personally paid about 38,000.00 on accomodations over the past 15 years since we always wanted accomodations that had a full kitchen. We stayed at the cabins which we loved but they did get "small" as our kids grew. (double bed was brutal to get used to!) Not to mention the money and time spent doing laundry for a family of 5 since we like to pack light. We too thought we would out grow or not want to go every year, jokes on us because every year we would come home planning the next year!

I am not looking at dvc as an investment, DH and I are just prepaying our vacations and getting much better accomodations in return. Our kids are getting older (2 in college) and can still see us going every year with or without them. We like to travel with our family and friends so i really think dvc is going to be a very positive decision for us.

I do beleive dvc is not for everybody and we were SURE it was not for us. I could say that I wish we bought earlier (maybe) but my mind set and the time was just not right for us. I cannot wait for my May trip, 2 bedroom at OKW with friends!

 

[Sandisw]

We looked at it from the numbers as well. However, we knew that we would continue to visit on a regular basis and at some point, so would our children and their families.

Since our yearly vacation budget (most often to Disney) is about $5000 - $7000, and we were spending this anyway, we looked to see how much DVC we could afford and keep the Disney trips within this amount.

As long as we could, then DVC was not going to cost us more. The benefit was that we would either get more nights or larger rooms (ie: 1 bedrooms) for our money.

And, at some point, once we have replaced the money we spent to buy in, our yearly vacation dollars will be less and therefore, in a way, "saving" us money.

But, if you are unsure about your plans to visit WDW for years to come, then I agree, it is not the right time to buy DVC. We did look at it for years, but were not happy with our choices for home resort. We bought because of BLT (we were CR fans) as we were stay is very important to our trips.

Good luck!

 

[DenLo]

We did a comparison for us but we used the rack rate for moderate Disney Hotels as we never seemed to go to WDW when the bargain room rates were going on. Sure in the past we have not gone to Disney yearly, but that was because the hotel costs were just to expensive, not that we didn't want to go more frequently, it just was too much money each year. Also we realized that when the economy improves the bargain hotel prices will disappear.

We found that we would recoup our initial investment in 5 to 7 trips, possibly sooner the more villas we rent, to WDW and after that the cost we would incur would be the annual maintenance fees. We did not include the park entrance expenses because that would be an expense we would have for either scenario, the same for food, souvenirs etc. We are retired and we know we will be taking regular vacations as long as our health allows. And then we hope to pass our DVC membership to younger family members (niece or nephew and family).

Our surprise to date is that we are able to get much longer vacations (10 days) at WDW while not spending that much more than a 4 or 5 night vacation cost us in the past. And this year we will be going twice and taking DBIL with us the second trip and getting a larger villa. Next year we are bringing 9 family members with us for 5 nights. Although we only provide them with a free room it will lower their expenses and allow them to come every two or three years. Then in 2013 we plan to bring my side of the family, but than means 20 or so family members as all of the nieces and nephews are married and with some kids of their own. We could never have brought extended family members without the DVC.

The total spent in 30 years is in on the spreadsheet, but that number really isn't a factor as you are right, who knows what we will be doing 10, 20 or 30 years out. BTW, the total amount spent on our 30 year home mortgage scared the heck out me too, but we still bought a house. However, if we get bored with going to WDW (doubtful as we really enjoy it and now with longer vacations it's more relaxing and we have time to enjoy the resort itself, not just the parks), then we could either sell our contract(s) or turn it over to younger family members. If we sell it we expect to recoup most of our initial investment. If that happens that would dramatically change the figures on the spreadsheet, don't you think?

Our only regret is that we did not buy into the DVC sooner.

 

[unclescrooge_0707]

Thank you all very much. As I thought (though don't know if I said) the IDEA of DVC ownership is very appealing, but the pen-to-paper reality is a lot more than I was expecting. I do appreciate everyone's insights, and hope more folks are willing to share their opinions on the "worth it" question.
(and I TOTALLY agree on the 30 year mortgage thing! )

 

[Crystal_27]

I just can't look at DVC in terms of what it will cost me in 10-20-50 years. That would be like looking at my Starbucks intake and trying to calculate how much I will spend on Starbucks in 50 years. Are there cheaper options? Of course! But, for now, Starbucks does it for me, just like DVC works right now for our family for the way that we vacation at Disney. When/if DVC stops working for us, we will sell and know that we've gotten our value out of our membership. In my mind, I only need to get back in savings the amount of the initial buy in plus what we've spent on MFs and, given the fact that our December, 2010 trip will get us close to being half-way to breaking even, we should get to break-even well before we tire of Disney vacations (which, in my current mindset, I can't imagine how that will ever be - LOL).

 

[amcnj]

You could also buy less points and not go every year. If you see yourself going every other or even every third year, you could buy less points and through banking and borrowing work that out, and greatly lower that $178000 figure.

 

[tjkraz]

I just can't look at DVC in terms of what it will cost me in 10-20-50 years. That would be like looking at my Starbucks intake and trying to calculate how much I will spend on Starbucks in 50 years.

Yeah, that's the big issue here.

Looking at an average cost is completely deceptive. We live in an inflationary economy where product costs are constantly on the rise. That's why our dues go up by approx 3% per year. As the years pass, Disney will be paying more for salaries, employee benefits, fuel (transportation), property taxes, utilities, etc.

But salaries rise as well, which is why we don't fully feel the impact of these increases.

If a $10.50 movie ticket rises by 3% per year, it will cost $45 in 2060. Is there really any value in calculating that ticket prices would average $23.68 over the next 50 years? Or that I would spend $7,106 on tickets if I go to 6 movies per year over that span?

In 1960 (50 years ago) a new car cost $2,600 and a gallon of gas was $.25. Oh and the average income was $5,315 PER YEAR.

None of us knows where we will be in 20, 30 or 50 years. Fortunately DVC contracts maintain a nice resale value. In 7+ years of ownership I have probably broken even on the initial investment. As it stands today I could pretty much give away the contract and would still have made out better than if I had paid cash for each trip. But giving it away isn't even a concern because, in reality, I could sell my points for thousands of dollars.

Best thing to do is to look at the present day cost and not get bogged down in the future. You probably don't have the perspective necessary to balance the cost in 2055 with what you will be earning.

If you can reasonably assume that DVC will be a good match for at least 8-10 years, anything beyond that is just gravy IMO.

 

[SEC]

I am a financial analyst and my husband is good at statistics and we looked at the numbers before buying in to DVC in 2000 and it was well worth it for us. We go at least once a year, sometimes we have gone two - three times a year. We are planning a vacation to New England this summer and I cannot believe what I am going to pay for hotel rooms, it makes me appreciate DVC all the more!

 

[browniemtb]

It truly is scary when you look at the details like this. But I approach it in a different light. First and foremost it is an investment in my family and my kids memories not a business investment. So instead of looking at the 50 year bottom line we looked at it in a year to year basis.....for instance year one you have $672, take the initial cost and spread that out to contract expiration, wrapped up in your buy in and $1236 in maintenance fees, so $1908. Now compare that to rack rate of what you will be getting for your 300 points, apple for apple. I will bet that at rack rate your costs would be 3 to 4x that amount. Now there is your savings for year one. Now if you travel every other year you now have 600 points at a cost of $3846.90 figuring 2.5% increase in maintenance fees for year 2......you are still ahead of the game because now you have more points for either a longer stay and/or potential rents that can recoup some of your expenses. In essence a year to year comparison, though not a business like thought process, made sense to us in our DVC purchase.

 

[lucyem]

I like the Starbucks analogy. We like Lattes at Starbucks. When you add up the yearly cost of 6 lattes a week To save money we invested in an decent espresso machine for home. Now we can have a latte anytime we want. Of course I now drink more then I would have otherwise, but I really enjoy them. We save money but not as much as we would have had we learned to like coffee or stopping drinking lattes altogether. My cost for my lattes is now just milk & coffee beans. The machine did break once and we were without for 2 months. Nothing is perfect. But we are very happy with our lattes at home.

The same applies to DVC. We are buying resale now. I look at it from the point of view as to when we break even. I figured it out on a spreadsheet and in about 6 trips we break even. Thats based on using the points 1x a year for the next 6 years. After that the cost of my trips to Disney are the maintenance fees - my milk & coffee beans.

For us there are many other advantages that make it worth it for us. The space of a 1 bedroom, bringing family, a familiar home away from home, there is more to Orlando then WDW, there is more to DVC then just Orlando, etc We already have the next few years planned out.

Is DVC the cheapest way to go to WDW - no. But does it work for us - I expect it will.

 

[Sunshine22]

We just returned from our first trip home. We bought into BLT (one year ago)and stayed in a 2 bedroom MK view for a week. We absolutely loved it! Our previous vacations have been to GF and Poly in 1 room with 2 beds for the 4 of us. Now that our daughters are teens, we were feeling the need for 2 rooms or better yet--a DVC purchase which offers a lot more flexibility. We calculated the numbers and decided that it would take several years to break even if we kept vacationing in 1 room (usually concierge at GF or Poly) and even less time if we felt the need to book 2 rooms at GF or Poly. I also considered scenarios where cash rooms were 40% off and still felt comfort that DVC would payout long before we would tire of using our points.

We were spoiled with a 2 bedroom on this trip and could get by with a 1 bedroom and/or a lake view or standard view if we wanted to use fewer points. What's especially nice about DVC is that you can choose how and when to use your points. You can bank and borrow to have more points in one year (for a longer trip or to book a larger room to bring friends and family), rent your points if you are unable to travel, use your points for a Disney Collection Trip, Cruise, or an RCI swap, or sell your DVC contract if the program no longer works for you.

If you are unsure of how you will use your points, you may want to start with a smaller contract and plan to bank and borrow so that you won't feel committed to take a DVC trip each year.

Good Luck with your decision!!

 

[Metsoskil]

I'm a numbers guy, and here's how we ended up w/ our DVC. On our first trip w/ our kids while staying both on-site (OKW and POFQ) for a few nights and in an off-site TS for a week (Vistana Villages) that my father was kind enough to give to us, we looked into DVC, but couldn't justify the cost. We bought an off-site TS in Kissimmee (Star Island); 3BR lock-off unit for 99 cents on Ebay. Nice resort, and while it's not on property, we had been there before, liked it well enough, and the price was right. We still enjoyed staying on property, though, and wanted to tack on a few nights to our yearly trips in the future.

Our plan was to go to WDW every year in August. One year we would take our TS in late August, and the next we would trade it for an earlier week so that one AP would cover the cost of both trips.

After planning this, we figured that the savings on 4 APs for our family as DVC members plus a few other fringe DVC discounts and not paying for a moderate room would save us about $800 on our first trip. When we saw a loaded 25 pt. resale contract at VWL, which we had been to for meals before and loved the theming and location at $84 per point (total of less than $2500 w/ closing costs), we jumped on it figuring the actual cost to us would only be $1700 or so because of the immediate savings.

After our first DVC trip (AKV Kidani) and off-site at Star Island, we enjoyed the DVC part so much that we added on another 25 pt. contract direct through Disney and a 40 pt. resale. Even if the numbers don't show that I'm saving a ton of money, I'm happy knowing that I used money I had saved for something that my family will enjoy for years. DW and I were able to fly down w/o the kids this year for a weekend during Flower and Garden for less than $1000 for the total trip, something that I would never have been able to do w/o the DVC. Knowing those experiences are available in the future is nice.

 

[Brian Noble]

I suspect you are not using present-value dollars for all payments. It's worth doing so, as it's a more accurate comparison. The short version: DVC is front-loaded, but thanks to inflation, a dollar today is "worth more" than a dollar ten years from now. So, accounting for the time-value of money will tend to narrow the gap between DVC and cash rentals, but comparing apples-to-apples, owning will still generally win out over renting. The intuition is that Disney is getting a long-term commitment from you, and that has economic value to Disney. Disney encourges you to do that by pricing in a way that generates a discount on lodging overall.

 

[Coach81]

I do realize that DVC is going to cost us a great deal of money if we use it for the life of the contract (SSR), I also realize that for me and my family it is the best investment that we could have ever made.. we have the best time, and have made.. and will continue to make priceless memories at WDW..

Can't put a price on all of that!!!

 

[BEASLYBOO]

I loved Disney and thought that it would be a great place to take vacations with my son, at 48 I'm more of a Disney junky than he his at 13. The only thing I was sure of is that I wouldn't finance it, so I bought in when I had the money saved. I don't try to really rationalize to the masses if financially it makes sense since at the end you don't own it, I just say it works for me. We've had the pleasure of staying in a GV 3 times now, for our family reunions and those spectacular accomodations I would never have been able to afford without DVC. When I bought it was a decision based more on how I like to vacation and where, I love Disney but we still vacation elsewhere too. Even now we frequent the parks less but we enjoy the resorts more and more just for what they and Orlando have to offer. I see my son using DVC with his friends when he's older, without me. I don't think of it as 40 years of just Disney vacations, and it wasn't an investment in moniteray terms but more of an investment in our families quality time. To that end, DVC/Disney has not disapointed me.

 

[DVCGeek]

I also compared the Rack Rate to DVC (with the same 2.5 % annual increase.) The savings of a vacation every year is over $130,000. But if I didn't have DVC, I wouldn't go to WDW every year, so it isn't a fair comparison.

So why not buy 160 points instead of 300, and bank one year then go to Disney every other year? If that is more in line with what you otherwise want to do then you'll pay a lot less and save a lot in the process...

 

[WonderlandsMostWantd]

I just posted about why I joined DVC, and how the cost made sense for us. If you'd like to read, it is here http://www.disboards.com/showthread.php?p=36151454#post36151454

The long and short of is for us is, that while we typically would have booked moderate resorts, we're on average booking 2-3 rooms per trip, beteween ourselves and friends and family. At that point, we could get a 2 bedroom DVC with kitchen, laudry and WAY more space and ammenities, for the same annual cost we would have been paying for multiple rooms in lesser accomodations. We know we're going to go on vacation every year, even if some years that vacation isn't to Disney, and if we wanted to use our DVC points with RCI, we can still do that, staying within our alloted annual vacation budget.

While the sticker shock is huge when you look at it up front, we realized it's no more than we would have been paying over the years anyway, since we are annual vacation oriented people. It all depends on you and your family, and your vacation wants and needs. It certainly doesn't make sense for everyone - for us it does.

ETA - we didn't buy anywhere near 300 points per year - we're at 160 right now, which is plenty for us. And I agree with the previous poster, that if you only plan on going every other year, try your figurues with the 160 point per year numbers, planning on banking every other year. It may more feasible for you.

 

[Corwin]

Instead of reading DIS during lunch, I used excel to figure out how much DVC would cost me. I used the following estimates
300 pts at $112/point, no interest on the $33,600, and a 2.5% increase on maintenence fees per year, starting at $4.12 for year 1.

Anyway, thanks to excel, I found my total-total after 50 years: I'm giving Disney $178,364.60.

Any time you look at something over that long a time period, you are going to get huge numbers.

Currently, I eat lunch out every day. It costs me $8.50 in the downtown area where I work, or $2,125 a year, assuming I eat five days a week for 50 weeks a year. Assuming a 3% rate of inflation, that works out to $239,693.34 for 50 years, just for lunch!

This breaks down to $297.27 per month.

As others have stated, this type of calculation doesn't mean much because you're taking a total and just dividing it by the total number of months, but not taking into account the effects of inflation. Using constant 2010 dollars, you're paying closer to $159/month.

In any event, with respect to my lunch, I'm not at all likely to still be eating lunch at work (or working, for that matter) for the next 50 years, so it doesn't really make sense to take the calculation out that far. Similarly, I doubt that most people are still going to be paying for their DVC membership 50 years from now--most people will either sell it or turn it over to their children.

 

[LIFERBABE]

That's how much it would cost if I were a pack a day smoker

Im not, so DVC is a relative bargain and I cant afford DVC and smokes!