An article on "Does DVC save you money?"

[crisi]

I think you're splitting hairs a bit. I think a lot of DVC owners were making at least annual trips to Disney World before buying in to DVC. It is very likely they would have kept making annual trips to WDW anyways with or without DVC. For those people, DVC is saving money.

There are also people who buy DVC and it changes how often they go to the park. In a way, it still saves these people money since they would be paying to stay on site anyways.

There are also some people who buy in to DVC who probably shouldn't.

Bottom line, there are people where DVC definitely saves money. It just depends on the person.

But that ISN'T splitting hairs - its the whole question of risk. If you are going to ignore risk, then the math is going to lie. In fact, that is probably the biggest way to get financial numbers to lie, ignore the risk. The second biggest is to underestimate or overestimate the time value of money - something the DisBoards gets a gold medal in.

That doesn't mean that DVC can't be a good value. And some people save money (I think its pretty rare because I agree - there are reasons that Disney loves DVC and one of them - but only one of them - is that it makes them more money than not having it - otherwise - build more $500 a night hotel rooms). But in my opinion, its always best to be cautious when giving financial advice to strangers - that includes downplaying the opportunity for savings. If you really want DVC, it works for you, and can afford it, then if you save money or not really isn't a question that needs to be asked - its a fun question to ask, and I can - legitimately - either save money or spend much much more - depending on what assumptions I make and what techniques I use to get an answer.

 

[smisale]

You're missing the point. Can you state with 100% certainty that even if you didn't own DVC, you would book a deluxe hotel at WDW annually for the next 30 years? (Now, you indicated it saves you money even against a value resort. Can you state with 100% certainty that the dues at a deluxe resort will be cheaper than a room at a value hotel in 30 years? In many cases, the dues are already higher than a value room).
If you cannot state that with absolute certainty, then you aren't saving money. What you're doing is making a trade. Disney is offering you a "lower price" as a trade for your uncertainty. Disney is giving up some of the future revenue in exchange for you removing all uncertainty far in advance.
"Savings" would mean that you pay less from day 1, you have the same flexibility to book. No need to book 11 months in advance, you can do it 1 day in advance most of the year. Means you never have to worry about banking points. Means you don't have to put up a huge amount of money up front. You're giving up quite a bit, in order to get a cheaper long term price.

Now, you may be pretty certain you'll get good value out of the DVC. That's why I bought it! But I won't actually know for another 10-30 years.

Another comparison: There are 2 houses next to each other. They are almost identical. Same design, same size, same amount of property. House #1 is $500,000.
House #2 is identical. Except.... there is a risk of massive flooding under very rare conditions. Those rare conditions may never occur, but it's a definite risk. House #2 is $450,000.

Now, did I save $50,000 by buying house #2? No... I chose the product with more risk but less cost. Now, if I live there for 50 years and it never floods, I might look back and say, "dang, that was a great deal!"

Can I state with certainty —Let’s See —-
YES
I’m sorry I thought I made that clear. Life is never cut and dry but you make decisions based on facts and math and numbers. It saves me money every year.Yes saves every year I know what I paid for years and what I pay now.also as stated I have sold my point and gone other places but I alway end up back at Disney. So why do I have to fork out twice as much for a trip I’m going to take away make no sense

 

[crisi]

My wife and I bought AKL Kidani at resale in 2013-10K flat out the door, 60 some dollars a point. The intention was to use it for family trips in the future as our son was 15, then to do extended family trips with grandkids. We still get many of the DVC benefits as most of the resale limitations happened after our purchase. AKL was her favorite resort and we stayed there numerous times. Tragedy happened in 2020, my wife died at 47. I had the discussion with our son as to what to do with the DVC, sell it for 150% of what we paid for it, or keep it as intended. For $90 a month in dues, we are keeping it. My son and his wife are doing 8 nights in May at AKL, I am doing a 3 day trip in April, and we still have points to use. I'm grateful we made the investment when we did and my wife got to enjoy the resorts, now we can use the DVC as intended, future family trips. We're not first class flyers, we drive 10 year old Toyotas, we're folks who decided to get something they would want and use and we found a way to do it at a 60% discount. If it comes down to it, we can easily rent the points out for a couple of grand and call it a profit for the year.

I am so sorry about your wife.

 

[PurdueTodd]

If I were to had used they money I spent on lodging the 5 years prior to buying DVC, while staying on property, it would have paid for one of my contracts. Knowing that I’ll continue coming to Disney yearly for at least the next 15 years....it makes sense for me and family to own.

The case for many who have joined may have the same concept of ownership. I hope my health will allow me to go longer than 15 years. Either way, my kids and grand kids can enjoy the next 47-48 yrs remaining on contracts paid for by dear old dad.

I didn’t grow up going yearly until I was an adult. I should have bought years ago. I can say my first trip was in 1972. I love the parks today as much as I did as a kid seeing the magic for the first time. This is what ownership is for me.... sharing the magic with at least two generations.

is it an investment???......its an investment growing up Disney for my family. Creating memories for years to come. It makes it easier to spend those days yearly together.

 

[smisale]

My wife and I bought AKL Kidani at resale in 2013-10K flat out the door, 60 some dollars a point. The intention was to use it for family trips in the future as our son was 15, then to do extended family trips with grandkids. We still get many of the DVC benefits as most of the resale limitations happened after our purchase. AKL was her favorite resort and we stayed there numerous times. Tragedy happened in 2020, my wife died at 47. I had the discussion with our son as to what to do with the DVC, sell it for 150% of what we paid for it, or keep it as intended. For $90 a month in dues, we are keeping it. My son and his wife are doing 8 nights in May at AKL, I am doing a 3 day trip in April, and we still have points to use. I'm grateful we made the investment when we did and my wife got to enjoy the resorts, now we can use the DVC as intended, future family trips. We're not first class flyers, we drive 10 year old Toyotas, we're folks who decided to get something they would want and use and we found a way to do it at a 60% discount. If it comes down to it, we can easily rent the points out for a couple of grand and call it a profit for the year.

Sorry to hear about your wife.Thank you for sharing your story.

 

[havoc315]

Can I state with certainty —Let’s See —-
YES
I’m sorry I thought I made that clear. Life is never cut and dry but you make decisions based on facts and math and numbers. It saves me money every year.Yes saves every year I know what I paid for years and what I pay now.also as stated I have sold my point and gone other places but I alway end up back at Disney. So why do I have to fork out twice as much for a trip I’m going to take away make no sense

ok, so you have more money in your savings account/retirement account now, then if you never purchased DVC. And even if you never purchased DVC, you would always book your vacations 7-11 months in advance, etc, etc.

I think we are defining savings in very different ways. I define savings as: You put $100 in the bank. It is FDIC insured. It is guaranteed to be $100 + interest next year.

If I purchase a DVC for $25,000 today, am I 100% guaranteed that I can still get my $25,000 back next year?
If I put my $25,000 into a CD, I can guarantee myself I'll have $25,000 + 0.67% next year.
So compounded over say... 20 years... I will have $41,414 in 20 years..
So if I buy DVC for $25,000 today, will I have an extra $41,414 in my retirement account in 20 years?

 

[Wiltony]

The answer to the open ended question, "Does DVC save you money?" is an unequivocal "no." You have to qualify the question. "Does DVC save you money compared to...xxx" and then we can get some real answers.

Compared to staying on property and paying rack rates for the same capacity and accommodations, yes. Compared to staying at the Kissimmee La Quinta (or just not going at all), no, it doesn't.

 

[DisneyMountainWoman]

ok, so you have more money in your savings account/retirement account now, then if you never purchased DVC. And even if you never purchased DVC, you would always book your vacations 7-11 months in advance, etc, etc.

I think we are defining savings in very different ways. I define savings as: You put $100 in the bank. It is FDIC insured. It is guaranteed to be $100 + interest next year.

If I purchase a DVC for $25,000 today, am I 100% guaranteed that I can still get my $25,000 back next year?
If I put my $25,000 into a CD, I can guarantee myself I'll have $25,000 + 0.67% next year.
So compounded over say... 20 years... I will have $41,414 in 20 years..
So if I buy DVC for $25,000 today, will I have an extra $41,414 in my retirement account in 20 years?

But that money would not go into retirement accountant it would go to a vacation. We were looking at using our 5,000 for a Disney cruise, but then it got canceled. Now I can take the money and put it to going to Disney for years... The money would not go into my saving because I value trips. It is going to be spent somewhere at Disney, so do I want to spend it on a one time vacation or spend it so I can get multiple vacations out of it. So it is a savings, because never would that money ever go into retirement account, but now I maximized the amount of trips I can get from that money.

Also to all the people saying you never pay rack rate as a teacher who can only go when kids are out.... we pay rack rate all the time sadly.... (I miss my years before teaching where we can go when there was deals and less crowds.)

 

[smisale]

ok, so you have more money in your savings account/retirement account now, then if you never purchased DVC. And even if you never purchased DVC, you would always book your vacations 7-11 months in advance, etc, etc.

I think we are defining savings in very different ways. I define savings as: You put $100 in the bank. It is FDIC insured. It is guaranteed to be $100 + interest next year.

If I purchase a DVC for $25,000 today, am I 100% guaranteed that I can still get my $25,000 back next year?
If I put my $25,000 into a CD, I can guarantee myself I'll have $25,000 + 0.67% next year.
So compounded over say... 20 years... I will have $41,414 in 20 years..
So if I buy DVC for $25,000 today, will I have an extra $41,414 in my retirement account in 20 years?

So where in your calculations is your vacation money or you just stay home. Next and maybe I’m wrong but when the crash of 2008 a lot people lost everything including there 401k and investments so that theory too me is out the window. I saved for both my vacations and retirement the money I saved on vacation was more in my retirement savings.

 

[havoc315]

But that money would not go into retirement accountant it would go to a vacation. We were looking at using our 5,000 for a Disney cruise, but then it got canceled. Now I can take the money and put it to going to Disney for years... The money would not go into my saving because I value trips. It is going to be spent somewhere at Disney, so do I want to spend it on a one time vacation or spend it so I can get multiple vacations out of it. So it is a savings, because never would that money ever go into retirement account, but now I maximized the amount of trips I can get from that money.

Also to all the people saying you never pay rack rate as a teacher who can only go when kids are out.... we pay rack rate all the time sadly.... (I miss my years before teaching where we can go when there was deals and less crowds.)

But putting money towards a vacation is not, by definition, saving. Again, you might be getting something of great value. But if the money isn't going into the bank ultimately, it's not saving.

"Maximizing the trips" is a great value!

I'm reminded of a cruise I went on a few years ago. Spent about $6,000. At the last second, I got upgraded to a $10,000 suite! So I ended up with a fantastic deal! But I didn't "save" money.... I didn't get an extra $4,000 into my bank account. I just got a great deal.

Variable discounts are available year round, including school vacations. (now, rack rate is even higher during school vacations.. so may be 20% off $800, versus $40% off $500 at a slow time of year). Looking at historical discounts, the only time of year anybody would ever have to pay 100% rack rate, would be the last week of the year.

 

[havoc315]

So where in your calculations is your vacation money or you just stay home. Next and maybe I’m wrong but when the crash of 2008 a lot people lost everything including there 401k and investments so that theory too me is out the window. I saved for both my vacations and retirement the money I saved on vacation was more in my retirement savings.

Investments are investments -- not savings. They have risk.

Investment: Money used primarily and specifically for financial growth over a period of time.
Savings: Money put away for future use.
Spending: Buying a good for consumption. By definition, spending money on vacation is spending, it's not saving.

Put another way.... Will buying DVC now, make it easier or harder for me to pay for my kid's college tuition in 5 years?

 

[jimmymc]

I've done tha math before, and if you buy direct, you will pay about the same price as a higher-end moderate room for a deluxe studio, while if you buy resale, it's closer to a high end value or low-end moderate rate.

The author is comparing Disney prices to off-site hotels, which are obviously cheaper, but don't come with the transportation options and location of a DVC resort.

 

[Brian Noble]

Nobody can know with 100% certainty what their preferred vacations would be over the next 30 years.

Heck, I'm not even sure we are all that good at predicting the next 10---at least not based on my experience over the last ~15 years as a timeshare owner.

 

[Eric Smith]

You're missing the point. Can you state with 100% certainty that even if you didn't own DVC, you would book a deluxe hotel at WDW annually for the next 30 years? (Now, you indicated it saves you money even against a value resort. Can you state with 100% certainty that the dues at a deluxe resort will be cheaper than a room at a value hotel in 30 years? In many cases, the dues are already higher than a value room).
If you cannot state that with absolute certainty, then you aren't saving money. What you're doing is making a trade. Disney is offering you a "lower price" as a trade for your uncertainty. Disney is giving up some of the future revenue in exchange for you removing all uncertainty far in advance.
"Savings" would mean that you pay less from day 1, you have the same flexibility to book. No need to book 11 months in advance, you can do it 1 day in advance most of the year. Means you never have to worry about banking points. Means you don't have to put up a huge amount of money up front. You're giving up quite a bit, in order to get a cheaper long term price.

Now, you may be pretty certain you'll get good value out of the DVC. That's why I bought it! But I won't actually know for another 10-30 years.

Another comparison: There are 2 houses next to each other. They are almost identical. Same design, same size, same amount of property. House #1 is $500,000.
House #2 is identical. Except.... there is a risk of massive flooding under very rare conditions. Those rare conditions may never occur, but it's a definite risk. House #2 is $450,000.

Now, did I save $50,000 by buying house #2? No... I chose the product with more risk but less cost. Now, if I live there for 50 years and it never floods, I might look back and say, "dang, that was a great deal!"

Yes, I can state that. Every trip prior to DVC we stayed in the Swan or Dolphin. When I did the math to see if DVC makes sense, I compared it to staying at the Swan or Dolphin. When we went to Disneyland, we stayed at the Grand Californian.

I didn’t factor in the ability to re-sell the DVC contract at all when I did the math so any proceeds from selling a contract would be gravy.

 

[Meglen]

I feel some people only factor the buy price and piece meal the fees. Sure 90$-150$ a month isn't a whole hell of alot but over 30 years.. it's alot more than what you acually signed up for.

Say you bought 150 points which is low compared to most family's. This gets you about 7-10 days in a studio at 15p per night.(cheaper side).
15,000 % 30 = 500$ a year
150 points = 10$ pp fee yearly
So far were at 2000 a year just holding dvc.
Let boost this to 300 pts which seems more average that's 4k a year (which will only go up) before you even look to book.

The fees just don't sit well with me over the lifetime it adds up to alot. I can't guarantee that our finances will warrant that much upfront every year. With this math it's acually cheaper to rent the points you need since you usally get them for 16-19$ sure over time rooms cost more but that goes both ways. Your 150-300 points might not be enough after a few years.

For me I will be a deal hunter and either rent dvc or book deals as I see them. I know what I'm willing to pay and if it's not in the cards we can skip a year.

 

[havoc315]

Yes, I can state that. Every trip prior to DVC we stayed in the Swan or Dolphin. When I did the math to see if DVC makes sense, I compared it to staying at the Swan or Dolphin. When we went to Disneyland, we stayed at the Grand Californian.

I didn’t factor in the ability to re-sell the DVC contract at all when I did the math so any proceeds from selling a contract would be gravy.

So you can state... even if global warming turns Orlando into 120 degrees year-round, even if it forces them to shut down the theme parks and Magic Kingdom gets replaced by a sewage dump, you can state that you still would have booked an annual trip to the Swan or Dolphin?

And.. what year did you buy DVC? And the year after you purchased, you had more money in your savings account, thanks to buying DVC?

Doesn't sound like you "saved" money. Sounds like you simply spent your money on something different -- something with more upfront cost, more committed cost, but potential less future cost.

 

[smisale]

But putting money towards a vacation is not, by definition, saving. Again, you might be getting something of great value. But if the money isn't going into the bank ultimately, it's not saving.

"Maximizing the trips" is a great value!

I'm reminded of a cruise I went on a few years ago. Spent about $6,000. At the last second, I got upgraded to a $10,000 suite! So I ended up with a fantastic deal! But I didn't "save" money.... I didn't get an extra $4,000 into my bank account. I just got a great deal.

Variable discounts are available year round, including school vacations. (now, rack rate is even higher during school vacations.. so may be 20% off $800, versus $40% off $500 at a slow time of year). Looking at historical discounts, the only time of year anybody would ever have to pay 100% rack rate, would be the last week of the year.

now we are splitting hairs. by this definition I took out 2000 out of the bank to go on my disney vacation instead of 5000 so that's 3000 dollar left in the ban more money in the bank.I know the difference between saving and spending I just spend a lot less because either way im gonna spend it on a vacation

 

[havoc315]

I've done tha math before, and if you buy direct, you will pay about the same price as a higher-end moderate room for a dexule studio, while if you buy resale, it's closer to a high end value or low-end moderate rate.

The author is comparing Disney prices to off-site hotels, which are obviously cheaper, but don't come with the transportation options and location of a DVC resort.

But that's the point. Are you "saving" money, or just buying something different?
"saving money" is minimizing a necessary expense in order to literally put money into your bank (or under your mattress).

But buying vacation #1 instead of vacation #2 because it seems like a better overall value.. that's not savings. It's spending.

 

[smisale]

So you can state... even if global warming turns Orlando into 120 degrees year-round, even if it forces them to shut down the theme parks and Magic Kingdom gets replaced by a sewage dump, you can state that you still would have booked an annual trip to the Swan or Dolphin?

And.. what year did you buy DVC? And the year after you purchased, you had more money in your savings account, thanks to buying DVC?

Doesn't sound like you "saved" money. Sounds like you simply spent your money on something different -- something with more upfront cost, more committed cost, but potential less future cost.

no I would stay at the Hilton Head and look at the swamp there or Vero Beach so on and so on

 

[havoc315]

now we are splitting hairs. by this definition I took out 2000 out of the bank to go on my disney vacation instead of 5000 so that's 3000 dollar left in the ban more money in the bank.I know the difference between saving and spending I just spend a lot less because either way im gonna spend it on a vacation

And alas... that's where we potentially get into savings. If you can absolutely state you definitely would have spent $5,000 per year on vacation for the next 30 years... and instead, thanks to your purchase of DVC, you can absolutely positively state that you will only spend $2,000 per year on vacation (and you're banking the extra $3,000 -- not using it for another vacation!)... And if you paid 0 for the DVC points... then you are saving $3,000 per year!
But.. you didn't pay 0 for the DVC points. So you paid $25,000 for those points.... So even if you start leaving an extra $3,000 in your account per year -- You are still "down" for the first 8 years. That doesn't sound like a savings.... If you have LESS money, that's not savings at all. Ok... so from years 9-30, your bank account will finally start to grow! But again, that requires absolute certainty for your budgeting and vacation planning 9-30 years in advance....

Here is where we are getting hung up. DVC can be a great deal. You may look back on it with no regrets. You may look back completely glad you did it. You may even look back and calculate late it as a past savings. But it's still ultimately a purchase, it's a consumption. It's worthless after 50 years. It's something you buy and use.