An article on "Does DVC save you money?"

[Sandisw]

Some back and forth may be moving to an argument so let’s keep things where they need to stay...thanks all.

 

[4luv2cdisney]

This is such an important point, it should be emphasized. Those who bought DVC years ago saved within a few years.

In recent years, Disney has increased direct prices faster than inflation. In 2000, the direct price was $67/point (without incentives). Adjusted for inflation, that's about $102/point. Today's direct price for RVA is $201/point (without incentives).

At today's direct prices, it could take 20 years or longer to reach the point where buying DVC costs less than renting points.

Earlier on this thread, I mentioned I bought a resale 10 years ago for $55/point. To date, I've averaged $12.10/point for all of my DVC stays. Even with incentives, at today's discounted price of $180/point (at the Riviera), I would have paid more than $24/point for my 10 years of vacations to date.

Even the most expensive DVC rentals today are at $20/point.

Are you assuming you would have invested the money? Is that why your per point cost seems excessive?

 

[Nabas]

Are you assuming you would have invested the money? Is that why your per point cost seems excessive?

To come up with the $12.10/point that I have paid to date, I used the below calculation.

Total purchase price in 2011: 240 points X $55/point, plus $740 in closing costs = $13,940

Divide this by points used (2400) during the last 10 years (2011 to 2020): $5.81/point

The $5.81 is the cost per point of my original purchase divided over the 10 years that I have used it.

Then it's a matter of averaging the Maintenance Fee for the last 10 years, which works out to $6.29/point for me. (For reference, the average Maintenance Fee for the WDW DVCs in 2020 was $7.29/point.)

Add these 2 together to get $12.10/point. On average, that's what I paid per point for my DVC vacations from 2011 to 2020.

By the way, I'm pretty sure I could sell my DVC membership today for double what I paid for it. (I plan to go to WDW for years to come, so have no intention of selling.)

Keeping the numbers simple, let's say I sold it for $110/point and paid a 10% commission (i.e. $11/point). That means I pocket $99/point. Spread that out over the last 10 years and that's $9.90/point.

This means that if I sold today, I would have paid $2.20/point ($12.10 - $9.90) for my last 10 years of WDW vacations!

 

[4luv2cdisney]

To come up with the $12.10/point that I have paid to date, I used the below calculation.

Total purchase price in 2011: 240 points X $55/point, plus $740 in closing costs = $13,940

Divide this by points used (2400) during the last 10 years (2011 to 2020): $5.81/point

The $5.81 is the cost per point of my original purchase divided over the 10 years that I have used it.

Then it's a matter of averaging the Maintenance Fee for the last 10 years, which works out to $6.29/point for me. (For reference, the average Maintenance Fee for the WDW DVCs in 2020 was $7.29/point.)

Add these 2 together to get $12.10/point. On average, that's what I paid per point for my DVC vacations from 2011 to 2020.

By the way, I'm pretty sure I could sell my DVC membership today for double what I paid for it. (I plan to go to WDW for years to come, so have no intention of selling.)

Keeping the numbers simple, let's say I sold it for $110/point and paid a 10% commission (i.e. $11/point). That means I pocket $99/point. Spread that out over the last 10 years and that's $9.90/point.

This means that if I sold today, I would have paid $2.20/point ($12.10 - $9.90) for my last 10 years of WDW vacations!

Ohhhhh! Got it. I was trying to figure out how a $55 / pt contract was costing (what I perceived as) so much ($12.10).

Seems like most people divide the cost out by the entire contract length, so I was thinking even if you have a 2042 end date you'd be well under $10/pt.

Glad you're enjoying! I'm jealous of those 2011 prices!

 

[havoc315]

I am as well. But it isn't for everyone. It doesn't save money for everyone. And it doesn't fit everyone's lifestyle. And from where I sit, I really don't know if anyone reading this will save money, can afford it, or if its a good fit. There are too many variables. And frankly, I've seen people jump through some pretty twisted logical/financial hoops to make DVC work for them, then followed them for a few years, and then watched as DVC has turned out to have cost them far more than they could afford. So I'm pretty darn passionate about making sure people don't justify themselves into a regret.

There seem to be some purchases where there is a psychological need by some to build a justification. The Disney Dining Plan is an extreme example where people feel the need to rationalize that pre-paying their meals at $85 per day somehow saves them money because they drink wine and eat steak at every meal.

In reality, it comes down to, "I like the product I'm buying, it's a good price for what I'm getting."
I'm getting vacations for the next 50 years, and only have to pay maintenance fees (and airline tickets, and park tickets, and food) annually. It's something I expect to use a lot and enjoy a lot. In the end, I'm sure I'll be happy with my purchase. I am saving enough to pay tuition for college, we are building ample retirement savings. So we can afford it. Not going to twist the numbers to rationalize it into a savings.
But I think psychologically some people need to say, "well, I spent $20,000 and signed a 50 year contract because it saves me money." Instead of just, "yup.. I bought it because I wanted it."

 

[CarolMN]

I bought it because I wanted it."

Bottom line, that's why I bought, LOL. Fortunately, it turned out very well for us.

 

[smisale]

There seem to be some purchases where there is a psychological need by some to build a justification. The Disney Dining Plan is an extreme example where people feel the need to rationalize that pre-paying their meals at $85 per day somehow saves them money because they drink wine and eat steak at every meal.

In reality, it comes down to, "I like the product I'm buying, it's a good price for what I'm getting."
I'm getting vacations for the next 50 years, and only have to pay maintenance fees (and airline tickets, and park tickets, and food) annually. It's something I expect to use a lot and enjoy a lot. In the end, I'm sure I'll be happy with my purchase. I am saving enough to pay tuition for college, we are building ample retirement savings. So we can afford it. Not going to twist the numbers to rationalize it into a savings.
But I think psychologically some people need to say, "well, I spent $20,000 and signed a 50 year contract because it saves me money." Instead of just, "yup.. I bought it because I wanted it."

why do you alway pick something that suits you let’s look at it this way. I went to buy groceries because I need to eat to survive and the told me that if I pay a certain amount. I will be able to pay today’s groceries price for the next 50 years. I know this is ridiculous but this is my comparison

 

[crisi]

Bottom line, that's why I bought, LOL. Fortunately, it turned out very well for us.

Us as well. And in no small part because nookie Of course, now our children are adults and we could just book a studio again.

 

[havoc315]

why do you alway pick something that suits you let’s look at it this way. I went to buy groceries because I need to eat to survive and the told me that if I pay a certain amount. I will be able to pay today’s groceries price for the next 50 years. I know this is ridiculous but this is my comparison

I honestly don't understand what you're even saying. Whether that would "save money" would very much depend on lots of factors. How much choice in future groceries do you get? Do you get to pass on the purchase to decedents? If your family grows, will they give you more groceries for the same price? If you develop a food allergy to milk, will they provide non-dairy substitutes? What if your tastes change, or your doctor says to cut out red meat? And of course, what's the price? And what's the price compared to sticking the same money into long term investments.

 

[havoc315]

Bottom line, that's why I bought, LOL. Fortunately, it turned out very well for us.

And fortunately, that's the case for many many people!

 

[smisale]

I honestly don't understand what you're even saying. Whether that would "save money" would very much depend on lots of factors. How much choice in future groceries do you get? Do you get to pass on the purchase to decedents? If your family grows, will they give you more groceries for the same price? If you develop a food allergy to milk, will they provide non-dairy substitutes? What if your tastes change, or your doctor says to cut out red meat? And of course, what's the price? And what's the price compared to sticking the same money into long term investments.

What ever changes changes we would still get 2021 pricing on as much or less I buy and what ever it is. And that’s what I mean locking in today’s price for a future of savings

 

[Starport Seven-Five]

There seem to be some purchases where there is a psychological need by some to build a justification. The Disney Dining Plan is an extreme example where people feel the need to rationalize that pre-paying their meals at $85 per day somehow saves them money because they drink wine and eat steak at every meal.

In reality, it comes down to, "I like the product I'm buying, it's a good price for what I'm getting."
I'm getting vacations for the next 50 years, and only have to pay maintenance fees (and airline tickets, and park tickets, and food) annually. It's something I expect to use a lot and enjoy a lot. In the end, I'm sure I'll be happy with my purchase. I am saving enough to pay tuition for college, we are building ample retirement savings. So we can afford it. Not going to twist the numbers to rationalize it into a savings.
But I think psychologically some people need to say, "well, I spent $20,000 and signed a 50 year contract because it saves me money." Instead of just, "yup.. I bought it because I wanted it."

Most people have some kind of budget that must be followed while vacationing. If we spend a bunch of money on something "because we want it" instead of saving us money, it could result in us going on less vacations or shortening the trips we do take. We're not doing cost/benefit analysis on a Dole Whip here but big ticket purchases get some scrutiny.

I would love to have a blank check and make 5 figure purchases without doing a financial impact analysis. The problem is that if we made a few bad decisions in that price range, we would no longer be able to make 5 figure purchases comfortably.

 

[RebelScum]

Too many variables to do a realistic cost comparison with any degree of confidence, as future costs and vacation habits are likely unknowns (along with other unknowns). However, I do know that we enjoy staying in the deluxe resorts, and rarely did so prior to purchasing DVC. Hard to tell whether we are saving money, but I will say that we enjoy the upgraded accommodations and our trips to WDW are more comfortable and convenient. In the end, there is a value to that, particularly for a vacation, but that value is difficult to quantify. No regrets here!

 

[DougEMG]

If owning DVC doesn't save you money over paying cash, then don't buy DVC.

DVC will not save everyone money. Prime example, my first BWV contract that I bought was fully loaded, I paid no MF for those points, plus the owner hadn't used the points from the previous 2 years and had let them expired. That owner definitely did not save any money owning DVC.

 

[havoc315]

Most people have some kind of budget that must be followed while vacationing. If we spend a bunch of money on something "because we want it" instead of saving us money, it could result in us going on less vacations or shortening the trips we do take. We're not doing cost/benefit analysis on a Dole Whip here but big ticket purchases get some scrutiny.

I would love to have a blank check and make 5 figure purchases without doing a financial impact analysis. The problem is that if we made a few bad decisions in that price range, we would no longer be able to make 5 figure purchases comfortably.

I think I agree...

But there is a difference between considering/analyzing the financial impact versus truly saving money.

There is the analysis: "Can I afford it? Is the pricing reasonable? Will it be worthwhile for me in the long run?"
Compared to, "is this the cheapest possible way to get the exact same product I was going to buy anyway, and will it therefore put more money into my pocket for retirement/college savings/etc"

We all *should* do the basic former analysis. You wouldn't pay $1 million for 50 DVC points because you probably can't afford it, the price isn't reasonable, there is no way you that much money would ever be "worth it."

And I think the point of the OP article.. and the analysis most people are really doing -- "will this purchase give me *more* for my money?"
But there is a critical difference between saving and "getting more."
They are not the same thing.

 

[Lee Matthews]

Everyone buys DVC for their own personal reasons. Most people know they want to commit to Disney for many years and hopefully save money on the way.

For me it’s a couple of things. My calculations work out that I can stay at a DVC resort for the same OOP price for Art of Animation/ Caribbean Beach.

once I secure a contract and have points, it will no longer be about the financial part for me. The dues will purely be considered another household bill and my bi-annual trips will drop to a much more manageable holiday.

Also for me, while the price of direct doesn’t appeal to me. I get why people buy direct for ease of use and the blue card but that card doesn’t interest me at all.

At the same time, I don’t want to be a guest paying out of pocket, I want to ‘own’ something at Disney which is why we are going for resale. Odd isn’t it

 

[crisi]

If owning DVC doesn't save you money over paying cash, then don't buy DVC.

DVC will not save everyone money. Prime example, my first BWV contract that I bought was fully loaded, I paid no MF for those points, plus the owner hadn't used the points from the previous 2 years and had let them expired. That owner definitely did not save any money owning DVC.

I would say "if you aren't going to get value out of DVC over paying cash, don't buy it." That value can come in "enforced" vacations. Or in staying onsite when you wouldn't have. Or in nookie. That value may not (and I think probably won't for most people) come in the form of saving over what you would have spent without DVC.

One thing we haven't talked about. When people make their initial purchase of DVC points, they look at saving money and buy points to get the same vacations. But we also like to say that addonitis is real (it hasn't been for me) and that you will very likely end up buying more points. Its really hard to figure out how people who originally bought enough points to recreate the vacations they had on cash, and then buy more points so they can go more often/stay in bigger rooms/take friends/have the home resort window at BWV/BCV every two years are saving. They ARE getting value.

 

[Nabas]

Ohhhhh! Got it. I was trying to figure out how a $55 / pt contract was costing (what I perceived as) so much ($12.10).

Seems like most people divide the cost out by the entire contract length, so I was thinking even if you have a 2042 end date you'd be well under $10/pt.

Glad you're enjoying! I'm jealous of those 2011 prices!

Right, over time the original purpose price will get spread out over a longer period of time.

Conversely, the annual Maintenance Fee will continue to up in price.

I'm not sure if these 2 will wash over time.

 

[havoc315]

I would say "if you aren't going to get value out of DVC over paying cash, don't buy it." That value can come in "enforced" vacations. Or in staying onsite when you wouldn't have. Or in nookie. That value may not (and I think probably won't for most people) come in the form of saving over what you would have spent without DVC.

One thing we haven't talked about. When people make their initial purchase of DVC points, they look at saving money and buy points to get the same vacations. But we also like to say that addonitis is real (it hasn't been for me) and that you will very likely end up buying more points. Its really hard to figure out how people who originally bought enough points to recreate the vacations they had on cash, and then buy more points so they can go more often/stay in bigger rooms/take friends/have the home resort window at BWV/BCV every two years are saving. They ARE getting value.

I agree with all that.

But as to addonitits — it’s not uncommon for a family to increase their vacation budgets as their families grow and/or they increase their earnings.

Thus, “adding on” is just an appreciation if this evolving vacation budget. As I’ve said, I don’t see any of it as savings, but I don’t see addonitis as the culprit.

But conversely, evolving budget is an example of a way it goes against savings.
We usually think in terms of, “what if I lose my job and can’t afford dues... then it’s not a savings.”

But the same can be true with increasing budget. Already locked in to DVC.. you may use increasing budget to buy more points, eat nicer dinners at WDW, buy tours, etc. Giving your growing budget to Disney.. but missing out on things you might do if you weren’t locked in to Disney.
It’s easy to say, “oh... I’m thrilled with the bulk of my vacations over my whole lifetime being WDW... no matter how much my budget grows, I’ll be happy spending most of my vacation time at WDW!”
... but it’s impossible to really know what your attitude would be if you weren’t locked in to Disney.

As your budget grows from a $5,000 annual vacation to a $15,000 annual vacation... Maybe you’d try things totally new and different. But since you’re already locked into an annual trip to WDW... buy extra points, eat more signature meals, stay in a 2BR or Grand Villa instead of a studio.

Again, this isn’t an anti-DVC statement. But it’s part of the intangible price of DVC — to some degree, you’re limiting your future self from trying new things. (Personally, it’s a reason I didn’t buy DVC until my budget grew to a point where I could do DVC AND lots of non-DVC. But even in my cases, I recognize I’ll reduce non-Disney trips in the future).

 

[smisale]

I don’t understand the term locked into WDW vacation. There are so many options selling points is one there are so many people dying to go to Disney that you can sell your points easily and go on a cruise,a trip to Vegas, California and so on.I had a friend that bought a long time ago and paid very little. I asked him if he is gonna sell since he rarely goes anymore and his words not mine “No it’s money in the bank” in others word he’s sells his points every year and still has his initial investment I know he has a lot of point more the 400 but I can’t tell you for sure and how much. Or how much he paid but he did buy them 10+ years ago