An article on "Does DVC save you money?"

[havoc315]

But in terms of dollars and savings, we potentially save because we buy in bulk today. Until we consume the bulk of those points, our savings are only potential. And in the interim, we assume significant risk in exchange.

This. And a second element of this: By purchasing in bulk, we forego the ability to spend the money elsewhere.

So if I buy a timeshare bulk contract in Hotel Alpha.... But 2 years later, Hotel Beta opens -- And Hotel Beta is nicer and cheaper, and doesn't even require the bulk contract... cheaper even without having to buy in bulk -- Well, my money is already spent. So I've lost the opportunity to book this nicer and cheaper hotel.

Yes, you get a "discount" by buying almost anything in bulk. But the reason you are getting that discount it because you're assuming risk. Disney doesn't even know whether the theme parks will be open in 50 years. (Though unlikely... it's far from impossible. A massive hurricane could destroy the theme parks, and they might not believe rebuilding it is worthwhile, for example. Could get destroyed by terrorists... who would have ever thought the Twin Towers would be gone just 30 years after being built). ). So they will sell you a room 50 years from now, on the ultra cheap... since you're assuming a huge risk.

 

[havoc315]

I have greatly enjoyed my resale discounted DVC points for many vacations and time with my family that is more valuable than money.

And that's what I said from the start.

 

[smisale]

Maybe you can talk me through this so I understand your math a little better.

Based on what you've shared on these boards, these are your only contracts. Ignoring the HHI contract for moment (which is a whole other ball of wax). On the AKV contract, you have no points until 2022. So you've stayed zero days on your points. You have a March UY so you technically won't even be able to book anything with your full points for another five weeks or so. You've paid $18,100 dollars today, and you have committed to paying Disney dues on those points every year for the next 35 years regardless of where life may take you.

In December this year, you'll be hit with an additional $1,500 in dues. All told, on the AKV contract alone, you'll have put out about $20,000.00 on something you haven't stayed on. After your first one week stay over a year from now, you will have paid about $2,800.00/night. After your second week in 2023, you will have paid $1,500/night. And so on and so on.

I'm not using this calculation to be obtuse. Having bought into the Disney's timeshare system myself, I understand the long term savings I may realize vs. paying cash. But each of us does so at the assumption of a lot of risk; risk that Disney is all too happy to hand off to every last Disney timeshare owner.

While I don't subscribe to havoc315's austere qualifications for savings, his bigger point should not be lost in the back and forth over bread and semantics. And that is that Disney's timeshare first and foremost benefits Disney. As a PP stated, "the house always wins" is apt. For most of us, it will be more symbiotic in that we benefit from staying there more often which we all all apparently value by virtue of owning a Disney timeshare. Or we'll stay in nicer accommodations than we normally stay in. That is also a benefit.

But in terms of dollars and savings, we potentially save because we buy in bulk today. Until we consume the bulk of those points, our savings are only potential. And in the interim, we assume significant risk in exchange.

There is risk that we no longer enjoy Disney in 12 years. There is the risk we face catastrophic life changes in 3 months. There is risk Disney changes the park going experience to focus on content delivery which better serves the bottom line. There is risk Disney changes its timeshare product to a point where it no longer resembles what we bought into.

Regardless of whether or not any or all of these things happen, you are on the hook to pay dues for the life of your contract. That may eventually mean selling your contract, but until you actually do your timeshare remains a financial liability.

The reason some of us on these boards assume the buzzkill role and hammer home the risk elements is in part to balance the optimistic, sometimes Mickey Math justifications for buying a Disney timeshare. If all the "savings" of owning DVC is necessary to make buying make sense, make sure assumption of all the risks makes sense as well.

Those are my newest accounts I just purchase since I’ve joined and I can’t see the point of tracking all my post your some detective. I’ve been going to Disney almost 30 years DVC and paid cash for rooms

 

[4luv2cdisney]

Maybe you can talk me through this so I understand your math a little better.

Based on what you've shared on these boards, these are your only contracts. Ignoring the HHI contract for moment (which is a whole other ball of wax). On the AKV contract, you have no points until 2022. So you've stayed zero days on your points. You have a March UY so you technically won't even be able to book anything with your full points for another five weeks or so. You've paid $18,100 dollars today, and you have committed to paying Disney dues on those points every year for the next 35 years regardless of where life may take you.

In December this year, you'll be hit with an additional $1,500 in dues. All told, on the AKV contract alone, you'll have put out about $20,000.00 on something you haven't stayed on. After your first one week stay over a year from now, you will have paid about $2,800.00/night. After your second week in 2023, you will have paid $1,500/night. And so on and so on.

I'm not using this calculation to be obtuse. Having bought into the Disney's timeshare system myself, I understand the long term savings I may realize vs. paying cash. But each of us does so at the assumption of a lot of risk; risk that Disney is all too happy to hand off to every last Disney timeshare owner.

While I don't subscribe to havoc315's austere qualifications for savings, his bigger point should not be lost in the back and forth over bread and semantics. And that is that Disney's timeshare first and foremost benefits Disney. As a PP stated, "the house always wins" is apt. For most of us, it will be more symbiotic in that we benefit from staying there more often which we all all apparently value by virtue of owning a Disney timeshare. Or we'll stay in nicer accommodations than we normally stay in. That is also a benefit.

But in terms of dollars and savings, we potentially save because we buy in bulk today. Until we consume the bulk of those points, our savings are only potential. And in the interim, we assume significant risk in exchange.

There is risk that we no longer enjoy Disney in 12 years. There is the risk we face catastrophic life changes in 3 months. There is risk Disney changes the park going experience to focus on content delivery which better serves the bottom line. There is risk Disney changes its timeshare product to a point where it no longer resembles what we bought into.

Regardless of whether or not any or all of these things happen, you are on the hook to pay dues for the life of your contract. That may eventually mean selling your contract, but until you actually do your timeshare remains a financial liability.

The reason some of us on these boards assume the buzzkill role and hammer home the risk elements is in part to balance the optimistic, sometimes Mickey Math justifications for buying a Disney timeshare. If all the "savings" of owning DVC is necessary to make buying make sense, make sure assumption of all the risks makes sense as well.

I think we can all agree there are risks. There are risks associated with almost anything. Even my cheap loaf of bread. It might be dry. It might mold in 2 days. I mean, I don't know if I compared the expiration dates...

Seriously, though. One of the big discussions I see on these boards is "if I'd invested the money instead of buying DVC...." but unless you are talking about a savings account (currently earning maybe .5%) there is risk. Yet people quote #s like facts.

I've known people that lost money in retirement accounts.

I've known people that lost money on their homes.

Timing is everything and timing wasn't on their side.

And you really haven't made $ until you sell / cash out.
Just as with DVC you won't know if you (I won't say saved) came out ahead until down the line.

My young adult children just maxed out their Roth IRA for 2020 and 2021. I'm biting my nails watching the stock market even though I know they have tons of time before retirement. Why? Because there are things that could go wrong in their lives before then that make it necessary for them to need those funds. They're 18 and 22 for goodness sakes. Who knows what's around the corner? Also, I am a worrier with a very low risk tolerance though I'm trying very hard not to pass that on to my kids. So, I am the one that pushed them to put their money in despite being a bit concerned that timing isn't on their side right now. I'm going to bet on it being worth the risk.

So, in summary, why don't we just say that DVC can save money, but it comes with risks and trade-offs.
DVC might save one person money, but not another.
It really isn't a yes or no question that can be answered broadly.
Some people find they ultimately don't care if they saved money or not because they are getting enjoyment out of it.


(But, just for the record, I'm saving money )

 

[smisale]

Maybe you can talk me through this so I understand your math a little better.

Based on what you've shared on these boards, these are your only contracts. Ignoring the HHI contract for moment (which is a whole other ball of wax). On the AKV contract, you have no points until 2022. So you've stayed zero days on your points. You have a March UY so you technically won't even be able to book anything with your full points for another five weeks or so. You've paid $18,100 dollars today, and you have committed to paying Disney dues on those points every year for the next 35 years regardless of where life may take you.

In December this year, you'll be hit with an additional $1,500 in dues. All told, on the AKV contract alone, you'll have put out about $20,000.00 on something you haven't stayed on. After your first one week stay over a year from now, you will have paid about $2,800.00/night. After your second week in 2023, you will have paid $1,500/night. And so on and so on.

I'm not using this calculation to be obtuse. Having bought into the Disney's timeshare system myself, I understand the long term savings I may realize vs. paying cash. But each of us does so at the assumption of a lot of risk; risk that Disney is all too happy to hand off to every last Disney timeshare owner.

While I don't subscribe to havoc315's austere qualifications for savings, his bigger point should not be lost in the back and forth over bread and semantics. And that is that Disney's timeshare first and foremost benefits Disney. As a PP stated, "the house always wins" is apt. For most of us, it will be more symbiotic in that we benefit from staying there more often which we all all apparently value by virtue of owning a Disney timeshare. Or we'll stay in nicer accommodations than we normally stay in. That is also a benefit.

But in terms of dollars and savings, we potentially save because we buy in bulk today. Until we consume the bulk of those points, our savings are only potential. And in the interim, we assume significant risk in exchange.

There is risk that we no longer enjoy Disney in 12 years. There is the risk we face catastrophic life changes in 3 months. There is risk Disney changes the park going experience to focus on content delivery which better serves the bottom line. There is risk Disney changes its timeshare product to a point where it no longer resembles what we bought into.

Regardless of whether or not any or all of these things happen, you are on the hook to pay dues for the life of your contract. That may eventually mean selling your contract, but until you actually do your timeshare remains a financial liability.

The reason some of us on these boards assume the buzzkill role and hammer home the risk elements is in part to balance the optimistic, sometimes Mickey Math justifications for buying a Disney timeshare. If all the "savings" of owning DVC is necessary to make buying make sense, make sure assumption of all the risks makes sense as well.

I guess I use what you say that I paid another annual dues on a stripped contract that AKL that I don’t have any points until March which the seller paid by the way that make all your math flawed

 

[Lumpy1106]

Life is full of risk, a lot of times risk you have no control over. At a company I worked for I am invested in a Employee Stock Ownership Program (ESOP). Every year I get a statement about just what that stock is worth and how much I own. Hey, that's great! Except I cash out of the program on the day I turn 65. Not a day earlier or later. If the company decides to re-invest to improve their business position, the price of that stock goes down. It doesn't have to tank - a couple of dollars per share would be enough to reduce my share by more than a full years' pay. Yes, that did happen to some of my co-workers; they worked the entire last year before they retired for free.

And that's just a not-so-dire example. Go out and enjoy life - nobody gets out of this alive.

 

[PurdueTodd]

Again, that's a "saving" only if the widgets are identical. They aren't.

If you know you want 1 widget a year for the next 50 years...
And store #1 will sell you 1 widget for $1,000 now. And they will continue to sell you widgets every year.
The other store sells their widgets in bulk --- You must buy 50 widgets at once. But their price for 50 widgets is $49,500....

You haven't "saved" $500 by buying all those widgets at once... You've paid $500 less in 2021 dollars, but you've lost the opportunity to save or invest that money otherwise, you now have to find space to store those extra 49 widgets, etc.
In fact, it would save far more actual $$$ to simply put that initial $50k into a low risk investment and pay annually.

As to the second statement -- Why would I sell DVC just because it isn't saving me money? My house, my car, my computer, my camera, my clothes, my food.... None of that saves me money. I still keep all those things.

Just out of curiosity, are you an economics professor?? These conversations remind me if Econ210......lol

 

[PurdueTodd]

I think we can all agree there are risks. There are risks associated with almost anything. Even my cheap loaf of bread. It might be dry. It might mold in 2 days. I mean, I don't know if I compared the expiration dates...

Seriously, though. One of the big discussions I see on these boards is "if I'd invested the money instead of buying DVC...." but unless you are talking about a savings account (currently earning maybe .5%) there is risk. Yet people quote #s like facts.

I've known people that lost money in retirement accounts.

I've known people that lost money on their homes.

Timing is everything and timing wasn't on their side.

And you really haven't made $ until you sell / cash out.
Just as with DVC you won't know if you (I won't say saved) came out ahead until down the line.

My young adult children just maxed out their Roth IRA for 2020 and 2021. I'm biting my nails watching the stock market even though I know they have tons of time before retirement. Why? Because there are things that could go wrong in their lives before then that make it necessary for them to need those funds. They're 18 and 22 for goodness sakes. Who knows what's around the corner? Also, I am a worrier with a very low risk tolerance though I'm trying very hard not to pass that on to my kids. So, I am the one that pushed them to put their money in despite being a bit concerned that timing isn't on their side right now. I'm going to bet on it being worth the risk.

So, in summary, why don't we just say that DVC can save money, but it comes with risks and trade-offs.
DVC might save one person money, but not another.
It really isn't a yes or no question that can be answered broadly.
Some people find they ultimately don't care if they saved money or not because they are getting enjoyment out of it.

That’s awesome that you’re kids are maxing out at that age. I’d say you’re a very good parent to teach them to start early.
give your nails a break.... kudos to you.
(But, just for the record, I'm saving money )

 

[ElizabethG]

I never called it an 'investment'. At best, it was a hedge on inflation (that paid off). My first contract we used for 10 years, mostly staying in studios. I could sell it for much more than I purchased it for. So, I could come out ahead. However...it is not an investment to me. I bought more points so I can stay in larger rooms that I would never think about paying cash for. It is a luxury purchase that I wouldn't trade for the investment of that amount in the future. I did not spend the money in leu of investing. Everyone spends money on things that are frivolous. We can spend our money on whatever we wish.

 

[PurdueTodd]

That’s awesome that you’re kids are maxing out at that age. I’d say you’re a very good parent to teach them to start early.
give your nails a break.... kudos to you.

 

[Meglen]

When people sell and say they got more back are you accounting all the annual fees aswell? Sure you might sell at a higher pp, but over all cost I doubt you could get back.

 

[havoc315]

Oh of course there's a lot of factors like the duration with DVC, less Housekeeping etc, but on a direct comparison of say 2 weeks in July, would the calculation ive been told remotely make sense?

Three ways you should compare:
Pick the room you want, and look up the rack rate. Also look up the number of points, to book with points.
Then, the 3 ways to compare:
1. Cost of cash booking (rack rate with a 20-40% discount)
2. Cost of renting the points ($15-$21 per point to rent)
3. Cost of point purchase, pro rated per year.

I'll use the Riviera as an example, as they have lots of rooms that are both cash and DVC...

So let's look at a 1 bedroom at Riviera for 1 week in July
1. $8,268 rack rate. With likely summer discounts, $4960 $6500.
2. Points: 370 points: Renting 370 points: $5960 - $7,770
3. Purchasing the points: About $68,000 to purchase 370 Riviera points. Spread over 49 more years.... Assuming the money would have otherwise just sat under your mattress... You are paying around $4 per point, plus about $8.50 in maintenance.... So you're paying about $12.50 per point, with most of that payment up-front. So you're paying $4,625 for that 1 bedroom for the week. But you're committing to paying that rate every year for 49 more years.

So compared to the cash rate for that room, you're "saving" somewhere between 6% and 30%, by purchasing in bulk, 49 years worth, at once.

Now.. these calculations will differ significantly by room type. For example, if you used a studio as the base pricing, you'd find much better "savings."

 

[crisi]

Life is full of risk, a lot of times risk you have no control over. At a company I worked for I am invested in a Employee Stock Ownership Program (ESOP). Every year I get a statement about just what that stock is worth and how much I own. Hey, that's great! Except I cash out of the program on the day I turn 65. Not a day earlier or later. If the company decides to re-invest to improve their business position, the price of that stock goes down. It doesn't have to tank - a couple of dollars per share would be enough to reduce my share by more than a full years' pay. Yes, that did happen to some of my co-workers; they worked the entire last year before they retired for free.

And that's just a not-so-dire example. Go out and enjoy life - nobody gets out of this alive.

But understanding the risk and factoring it in to your decisions can make the difference between a catastrophe when the risk hits, and a much easier time. Especially with finances.

If you buy DVC today - on a tight budget - and next year you need to pay dues - but the furnace goes out in your house, and the transmission on your car goes out, and your credit is stretched - that isn't going to be a pleasant year. These things require balance. You don't want to live your life without EVER spending and only saving - with only necessities in life. That's a miserable existence. Lord knows I haven't - my life is filled with luxuries. But you also don't want to spend yourself into being a burden on your children. Enjoy your DVC - we have. But Disney Responsibly. Again, if you can afford it, who the heck cares if it saves you money. If you can only afford it if it saves you money, than understanding the risk IS critical.

And understand opportunity cost. For a lot of us, we've given up seeing the World in order to go to the World. And that is great if that is all you ever want to do. Others have balanced Disney with other travel opportunities. DVC isn't just about a monetary commitment - its also about a time commitment. Most of us don't have unlimited time and money to vacation. Make an informed choice about what you are giving up. Because no one gets it all. With 20 years of ownership under my belt - and extensive travel that is not Disney - if I had to give up one or the other - I'd sacrifice Disney in a hot second for more days in London or Tanzania or the beach in Phuket.

 

[havoc315]

Just out of curiosity, are you an economics professor?? These conversations remind me if Econ210......lol

lol... No, I'm just very analytical by nature. I've studied some economics but won't claim expertise.

 

[DougEMG]

At the end of the day, after owning DVC for 10+ years, I have more money in my pocket now then if I did the same vacations without owning DVC. So for me, that means DVC has saved me money, yeah! That doesn't even include the fact that I could sell all my points and have more than twice what I paid for them.

Meanwhile after 5-6 years of being invested in oil stock, I am still down from my initial investment, boohoo for me!

Looking back it seems like buying DVC was the smarter purchase even though it is a "consumption" purchase as compared to an "investment".

 

[PurdueTodd]

At the end of the day, after owning DVC for 10+ years, I have more money in my pocket now then if I did the same vacations without owning DVC. So for me, that means DVC has saved me money, yeah! That doesn't even include the fact that I could sell all my points and have more than twice what I paid for them.

Meanwhile after 5-6 years of being invested in oil stock, I am still down from my initial investment, boohoo for me!

Looking back it seems like buying DVC was the smarter purchase even though it is a "consumption" purchase as compared to an "investment".

I feel your pain, I’ve never made money on energy. ie: stand alone stocks in energy.

 

[Akck]

The title of this thread is "Does DVC save you money?"

I said it before and I will say it again. If it saved people money, Disney wouldn't offer it.

I'm out.

I‘m late to this thread, but I just wanted to say that this premise is wrong. It assumes everything needs to be a win-lose process, when it could be a win-win one.

Why would Disney make an offer that saves people money? Because it locks in future profits for them (park visitors), while costing them very little (most expenses covered by dues). At the same time, owners save on their accommodations compared to other onsite choices that they prefer. In order for owners to save, they need to commit going to a Disney property every year or two. So it can be a win-win process as long as owners can make this commitment.

When we purchased, we found making the longterm commitment to be the hardest thing to do. Who knows what they want to do 10 years from now? What I was able to do, was see that we could use our points over the next 5 years. I did an IRR analysis, with a goal of a return above 0% with resale value of $0. I’ve gotten a positive return somewhere in the 6-8 year range of ownership. So as long as we own for that period, we will come out ahead, but no “savings” there, just spending less.

 

[Nabas]

Huh? I achieve it all the time.... Every month, I put money into a retirement account, I put money into college savings accounts for my kids. That's saving money.

If you think putting away cash to pay for college at some point in the future is "saving money", then you have no idea of the cost of college! No one would call paying for college "saving money"!

And if you are putting away money for retirement that you then plan to spend later, then you are not saving money. You are just deciding to spend that money later.

DVC is the opposite. You spend more money now to save money later.

I don't buy the Costco 30-count toilet paper because it saves me money now. I buy it because it saves me money over the long haul.

So I guess that means DVC is like Costco toilet paper.

 

[4luv2cdisney]

When people sell and say they got more back are you accounting all the annual fees aswell? Sure you might sell at a higher pp, but over all cost I doubt you could get back.

Pretty sure people are referring to only their initial outlay.

So, if they get back what they paid upfront + at least inflation on those $, the room "cost" is equal to dues only.

Common for many past purchasers, who knows for those buying now.

Actually, it's very possible some people have / can get ALL their $ back (especially those that picked up contracts around maybe 2011-2013 ish), but I wouldn't count on it going forward.

 

[mustinjourney]

Three ways you should compare:
Pick the room you want, and look up the rack rate. Also look up the number of points, to book with points.
Then, the 3 ways to compare:
1. Cost of cash booking (rack rate with a 20-40% discount)
2. Cost of renting the points ($15-$21 per point to rent)
3. Cost of point purchase, pro rated per year.

I'll use the Riviera as an example, as they have lots of rooms that are both cash and DVC...

So let's look at a 1 bedroom at Riviera for 1 week in July
1. $8,268 rack rate. With likely summer discounts, $4960 $6500.
2. Points: 370 points: Renting 370 points: $5960 - $7,770
3. Purchasing the points: About $68,000 to purchase 370 Riviera points. Spread over 49 more years.... Assuming the money would have otherwise just sat under your mattress... You are paying around $4 per point, plus about $8.50 in maintenance.... So you're paying about $12.50 per point, with most of that payment up-front. So you're paying $4,625 for that 1 bedroom for the week. But you're committing to paying that rate every year for 49 more years.

So compared to the cash rate for that room, you're "saving" somewhere between 6% and 30%, by purchasing in bulk, 49 years worth, at once.

Now.. these calculations will differ significantly by room type. For example, if you used a studio as the base pricing, you'd find much better "savings."

As you note -- 1BRs are the least economical from a point use compared to cash rack rates. Point charts are roughly double for a 1BR vs a studio -- whereas Disney charges about 50%-65% more for a 1BR compared to a studio.

One of the reasons I almost never book 1BRs with my points -- if I want more space, I'd rather book a 2BR and invite someone else to join us (grandparents). Sure, it's extra people in the rooms, but that also provides free baby sitters and someone else to help get the kids going in the morning.

Plus the kids get some great memories with their grandparents and same with the GPs.